‘Govt must pay interest for payment delays’

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Motsamai Mokotjo

A PARLIAMENTARY committee has slated government departments and agencies for failing to pay suppliers timeously and called for the charging of interest against defaulters.parliament

The suggestion for private sector suppliers to levy interest for delayed payments was made during a portfolio committee on Law and Public Safety held on Tuesday in Maseru. The meeting was meant dto probe the causes for the delays in paying private companies for services rendered.

Among those in attendance were officials from the Home Affairs, Law and Constitutional Affairs and Police ministries, representatives from the Independent Electoral Commission (IEC) as well as Directorate on Corruption and Economic Offences (DCEO).

The officials and representatives had been summoned to outline the reasons for their failure to pay service providers on time. According to documents presented by the portfolio committee, the three ministries and two agencies in attendance owed suppliers over M4 million in the first quarter of the current financial year up to June 2015.

In their presentations, the officials blamed their suppliers for submitting their invoices late and failing to provide requisite documentation such as tax clearance certificates. They also raised the issue of limited capacities of their departments’ accounting and procurement offices.

Ministry of Police, Acting Principal Secretary (PS), ‘Majoele Hlasoa, said: “It is unfortunate that service providers submit their invoices late. For example, one of them said they did not have toner to print the invoices.

“They should be taught to be timely. If a tax clearance certificate will expire before the job is finished, we advise them to renew it earlier to avoid unnecessary problems.”

According to the portfolio committee report, the Ministry of Police owed suppliers M1.2 million.

Law and Constitutional Affairs ministry Director of Human Resources, Makhala Takalimane, said they had resorted to paying their suppliers in instalments. The report had revealed that the ministry owed suppliers M136 000.

“We have a list of long-term suppliers, and before the 2014-2015 financial year ended, we held a meeting with some of them to discuss the modalities of paying them,” Ms Takalimane said.

“We have already started paying them in instalments, and will soon reconcile the report.”

The portfolio committee’s chairperson, Lineo Molise-Mabusela, said the departments and agencies were doing the suppliers a disservice by not honouring their end of the deal.

“They should actually be charging you interest. It doesn’t sit well with us,” Ms Molise-Mabusela said.

She asked the officials to explain the reasons for obligating businesses to resubmit their tax clearances before being paid.

DCEO Director General, Borotho Matsoso, responded saying the Treasury department required businesses to furnish them with tax clearances to facilitate payment.

“I also urge the portfolio committee to invite the Lesotho Revenue Authority and Treasury to such forums so that they can also explain the reasons for the bureaucracy that hampers the payment processes,” Advocate Matsoso said.

According to the report, the Ministry of Home Affairs owed suppliers M700 000, although officials from the ministry said they had already paid M400 000. The judiciary, which includes the Appeal Court, High Court, Magistrates’ Court among others owed over M600 000.

The Justice Human Rights and Correctional Services ministry, the report said, owed M1 million which was disputed by ministry officials who said they owed M130 000. The late payment of suppliers by government is a perennial problem cited by private suppliers in growing their businesses.

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