The Gauteng Health Department is delaying payments to large suppliers for up to three years due to insufficient money despite a large increase in its budget from R41.9 billion last year to R46.4 billion this year.
Suppliers were told last week that those who were owed R5 million or less would be paid by late April or early May, while those owed larger amounts would be paid over three years.
This is an unacceptable and illegal arrangement as all payments should be done within 30 days according to Treasury regulations.
It is also disturbing that some companies have delivered to hospitals only to be told that their orders have been cancelled.
Finance MEC Barbara Creecy has said that the Department should not be borrowing from suppliers, but will continue to happen until the full accrual amount of more than R5 billion is paid over three years.
Service delivery is being affected as some companies refuse to deal with the Department and others put up prices to cover for late payment.
Premier David Makhura should have intervened far earlier as the debts to suppliers ballooned alarmingly over the last three years.
The Gauteng Health Department needs to improvement its management speedily to stay within budget as the provincial government raids other departments to pay about R200 million for the costs of the Life Esidimeni arbitration.