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Late Payment by Organs of State and State Owner Entitles – National Treasury coming to the assistance of the suppliers/contractors

1 September 2016

As of 1 July 2016, National Treasury Instruction 5 of 201/17 came into effect. What this instruction does is come to the aid of any contractors or suppliers currently working for Organs of State (Government Departments) and Public Owned Entities (the likes of Eskom and Transnet). The Instruction is issued to all Accounting Officers of Departments and Constitutional Institutions, Accounting Authorities of Public Entities and Head officials of Provincial Treasuries and deals specifically with payments due to suppliers / creditors exceeding 30 days after submission of a valid invoice.

The instruction states that it aims to resolve non-payment to those suppliers exceeding 30 days and informs that a dedicated call centre is being established to assist affected suppliers in resolving non-payments.

Once a complaint is lodged with the call centre, the Accounting Officer/ Authority will be notified and required to settle payment within 5 days from receipt of the complaint if there is no dispute.

The Accounting Officer/ Authority must report to National Treasury within 5 working days of being so notified on the resolution of the outcome, in case of a dispute this reporting requirement remains and the reasons for non-resolution must be stated.

National Treasury will investigate any dispute and provide recommendations, should the National Treasury decide that payment is in fact due, the Accounting Officer / Authority has 5 working days within which to implement this decision, if it does not do so the National Treasury may invoke the provisions of S216(2) of the Constitution which allows the Treasury to enforce compliance. Further to all the above, the instruction allows National Treasury to release publicly every month all details of outstanding creditors per Department and Entity.

Once the call centre is in place, it will most certainly be of assistance to contractors and suppliers who are suffering hardships due to late or non-payment where there is no dispute regarding such payment.

To view the full instruction, click here.

Author: Taryn van Deventer, Senior Associate