Nelson Mandela Bay still has a long way to go in order to reach the target of paying suppliers in 33 days, according to a report from Budget and Treasury submitted to the Municipal Public Accounts Committee.
The report shows that:
*6 615 invoices were processed in January 2012 with an average of 61 days for payment.
*7 498 invoices were processed in February with an average of 54 days for payment
*8 480 invoices were processed in March with an average of 43 days for payment, and
*8 783 invoices were processed in April with an average payment time of 42 days.
In a separate report to the Budget and Treasury committee, the Directorate states that the number of days taken by the various directorates to process documentation for payment “remains unacceptable and impacts significantly on the ability of Budget and
Treasury to manage cash flows in line with cash projections.
Not only is spending against budget of importance, but spending in line with cash flow projections is essential to en-sure financial sustainability.
The report shows that the worst offend-er is the Office of the Mayor that took 98 days “to process documentation” for payment from the date of invoice in March this year.
The report points out that in terms of the Municipal Finance Management Act accounts must be paid within 30 days of receipt of invoice.
However, to ensure efficient administration all reporting in relation to payment is based on using the invoice date as the baseline and not the date of receipt. This sets a high standard for the Metro and improves services to suppliers.
Based on this, “a conservative 10% variation rule on the target of 30 days from the receipt of invoice as legislated has been applied to establish an acceptable target for payment based on the date of invoice.
The report points out that in terms of the Municipal Finance Management Act accounts must be paid within 30 days of receipt of invoice.
However, to ensure efficient administration all reporting in relation to payment is based on using the invoice date as the baseline and not the date of receipt.
This sets a high standard for the Metro and improves services to suppliers.
Based on this, a conservative 10% variation rule on the target of 30 days from the receipt of invoice as legislated has been applied to establish an ac-ceptable target for payment based on the date of invoice.
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