Despite legislation requiring Health Departments to pay service providers within 30 days, few do, with the Eastern Cape department, particularly, struggling to to meet obligations because of unbudgeted accruals and outstanding payables totalling more than R17bn.
Health Minister Dr Joe Phaahla said these dated back to the 2019/20 financial year, and were not budgeted for, reports News24.
“Instead, they consume the budgetary allocation in a particular financial year. In other words, with its limited equitable share allocation, the department attempts to prioritise the payment of the small, medium and micro enterprises, which are the priority, and partially pay the major medication suppliers.”
The department had negotiated with the major medicine service providers to continue rendering services, for the patients’ sake.
“If patients cannot get the medication, the department is exposing itself to be sued by the health services’ consumers,” Phaahla said, adding that the provincial department had also negotiated with the Provincial Treasury to finance the accruals and payables.
Also struggling to pay for goods and services – for the 2021/2022 financial year – was the North West Health Department, mainly due to “inadequate budget allocation over the years as opposed to the ever-increasing burden of diseases and price escalation on non-negotiable items like medical supplies, laboratory services, security services, and patient catering”.
Consultants appointed by the National Treasury to review the situation had confirmed this.
“According to their report … it had been underfunded by R1.1bn, R2bn and R2.6bn over the medium-term framework expenditure up to 2023/2024 financial year.”
Equally hard hit was the Northern Cape Health Department, which couldn’t pay all its invoices when they became due, but the Limpopo Health Department, however, had paid 99% of valid invoices received on 31 March.
The Minister said the 1% of late payments was due to “slowness”, payment system being down, or “negligence on the part of officials”.
In Mpumalanga, most service providers were paid within 10 days, although some invoices are disputed due to “incorrectness”.
See more from MedicalBrief archives:
Eastern Cape Health owes R3bn, causing unpaid contractors to halt services
Provincial health departments owe R9.5bn in unpaid invoices
EC Health Department ordered to pay overdue bills for orthopaedic implants