| 1. |
Purpose
To outline the protocol to be followed to ensure that supplier accounts are settled within 30 days (i.e. from the date of receipt of the valid invoice to the date the amount is reflecting in the supplier’s bank account). |
| 2. |
Legislative background
National Treasury Regulation (NTR) 8.2.3 states that "Unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or, in case of civil claims, from the date of settlement or court judgement." |
| 3. |
Protocol to be followed to avoid late payments |
| 3.1 |
For easy tracking and reporting purposes, all supplier invoices and payment details of these invoices must be registered on the Supplier Invoice Tracking System (SITS). |
| 3.3 |
Valid invoices and supporting documents must be forwarded to the staff responsible for payments as soon as possible. |
| 3.4 |
Invalid or incomplete invoices must be referred back to the supplier for correction. |
| 3.5 |
The bank details of suppliers/entities should be confirmed and loaded timeously on the relevant systems (e.g. BAS) in order to eliminate delays with the settlement of invoices. |
| 3.6 |
It is of utmost importance that the "source document receipt date" is captured correctly on the relevant systems (e.g. BAS), because this date is used in automated system reports (e.g. KITSO) to determine whether an invoice was settled within the prescribed period of 30 days or not. If this date is not correct, it may erroneously lead to incorrect and unreliable reports. |
| 3.7 |
The "source document receipt date" is the date on which a valid invoice and all supporting documents have been received by the Western Cape Education Department (WCED). |
| 3.8 |
Invoices and supporting documents should be date stamped on the date of receipt by the WCED. If any supporting document to the invoice is outstanding and is only received at a later date, this latter date then becomes the "source document receipt date" and affected documents must be stamped accordingly. |
| 3.9 |
The date of a contract (e.g. learner transport agreement) should not be used in place of the "source document receipt date" as this may erroneously result in a payment being reported as a late payment on SITS, LOGIS and BAS. |
| 4. |
Reporting on invoices paid after 30 days and unpaid invoices |
| 4.1 |
The Provincial Treasury Circular No. 35 of 2014, dated 27 August 2014, requires departments to report monthly on non-compliance with NTR 8.2.3. |
| 4.2 |
According to the above circular, reporting on late payments to creditors should be limited to Goods and Services, including non-infrastructure capital expenditure. |
| 4.3 |
All offices dealing with invoices and the payment of invoices must complete a standardised electronic invoice register of all unpaid invoices at month-end and submit it within three working days after each month-end, to the Deputy Director: Financial Accounting at Head Office. |
| 4.4 |
SITS is used to assist with tracking and reporting on invoices and payments thereof. |
| 5. |
Facilitation and reporting by National Treasury |
| 5.2 |
Once a complaint has been logged with the call centre, the accounting officer of the WCED will be notified and required to settle payment within five working days from the receipt of the complaint, if there is no dispute. |
| 5.3 |
The above notification will be accompanied by a copy of the valid purchase order or order number, a delivery note and an invoice for the goods delivered or service rendered. |
| 5.4 |
The accounting officer must report to National Treasury on the outcome within five working days of being notified of the complaint. |
| 5.5 |
Where the accounting officer continuously fails to pay suppliers/creditors on time, National Treasury reserves the right to invoke section 216(2) of the Constitution of the Republic of South Africa, 1996 (stopping the transfer of funds to an organ of state). |
| 5.6 |
National Treasury will release a monthly report of all outstanding creditors per department as well as quarterly reports to Parliament regarding the non-payment of creditors within 30 days and will make the reports public. |
| 6.1 |
The contents of this minute must be brought to the attention of all officials directly and indirectly involved with the administration and payment of invoices. |
| 6.2 |
It is expected from the above officials to make a concerted effort to ensure that all invoices are settled within the prescribed period of 30 days, except in cases where there is an unresolved dispute regarding the rendering of a service or the delivery of goods. |
| 6.3 |
Any non-compliance with NTR 8.2.3 must be seen in a serious light. Remedial measures taken to address non-compliance must be instituted by responsibility managers dealing with invoices and payments. |
| 7. |
Your co-operation will be highly appreciated. |
SIGNED: L J ELY
DEPUTY DIRECTOR-GENERAL: FINANCE
DATE: 2016:08:04
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