Monday, 17 June, 2024
HomeNews UpdateGauteng Health owes thousands of suppliers R4bn

Gauteng Health owes thousands of suppliers R4bn

The R4bn owed to more than 42 000 service providers by the Gauteng Department of Health is ballooning because senior managers ignore invoices, and amid allegations that payments to politically connected people and companies get priority.

Now MEC Nomantu Nkomo-Ralehoko has been roped in to intervene in the dispute between senior officials and suppliers, who say payment requests for their invoices have been deliberately unanswered for years, reports City Press.

They have accused officials of deliberately ignoring emails from small and medium-sized companies begging for payments.

One of them, a track and trace company, said requests for payment went unanswered for two years, despite external and internal legal opinions confirming the legitimacy of invoices submitted.

Fuse Forensics & Security was appointed in 2020 to conduct the tracking and tracing of individuals of interest at the peak of the Covid-19 pandemic, as well as location-based monitoring and the surveillance of the progression of the pandemic to identify areas of intervention.

The company is now claiming more than R10m from the department, of which R1.5m is interest accrued over the two years of non-payment.

The matter has been escalated to the Office of the Public Protector for investigation.

Much of the department’s non-payment is apparently due to incompetence: there are also allegations that payments to politically connected individuals and companies are prioritised.

National Treasury is believed to be growing deeply frustrated with the Health Department officials, as it is forced to deal with claims worth millions of rands from small to medium-sized enterprises, some of which have been forced into bankruptcy because of the inefficiency.

“It is evident that, should the department fail to effect the necessary payments, Fuse Security will be entitled to pursue unjustified enrichment against the department, which may result in further costs … any failure to adequately budget for the amounts contractually due and which may be regarded as an unauthorised expenditure, could be accommodated by the department in an ensuing financial cycle,” said Advocate Megan Moodley in an independent legal opinion dated 13 December, commissioned by Gauteng Health.

A subsequent legal opinion submitted by provincial Health Department acting head of legal services Carel van Heerden confirmed Moodley’s position, adding that, because the funds meant to pay for the services were misspent by management, legal advice was sought to give direction.

“After perusal of supplied documents, and having consulted with the departments’ officials and accepted that proper processes were followed in appointing the service provider, counsel is of the opinion the service provider is entitled to payment for services rendered.

“We concur with the counsel’s opinion that the department … approves payment.”

Frustrated directors of Fuse Forensics & Security had written to the MEC suggesting that the officials causing the department to incur the R1.5m in interest payments did this on purpose and should be held personally liable for this bill.

“A senior official who was requested by the then chief financial officer to investigate and conclude this matter as far back as December 2020 is still … resolving the same. This disregard for timely resolution has resulted in accrued interest totalling R1 493 275.

“The non-response … to any of our inquiries is unacceptable and indicative of our experience with most officials,” said Fuse Forensics & Security chief operating officer Patrick Le Roux.

The Public Service Commission has called for consequence management for officials who fail to ensure the timely payment of supplier invoices, as regulated by the Public Finance Management Act.

Apparently, the MEC’s office has apologised and promised that payment would be made.
Gauteng health department spokesperson Motalatale Modiba said the delayed payments were due to concerns that the contract may have been awarded irregularly.

“Legal opinion was sought and, based on that, the decision was to proceed with payment. This, however, had to first go to the bid adjudication committee for processing, hence the delay.

“The company has since been engaged with and … they will get paid in April as part of the first payments for the new financial year,” Modiba said.

 

News24 article – Gauteng health owes service providers R4 billion (Restricted access)

 

See more from MedicalBrief archives:

 

Gauteng Health Department owes suppliers more than R4bn

 

Gauteng Health worst for non-payment of creditors

 

Gauteng Health looting and corruption rot ‘runs deep’ – nurse activist

 

 

 

MedicalBrief — our free weekly e-newsletter

We'd appreciate as much information as possible, however only an email address is required.