Online Reporter
Nqobile Bhebhe, Senior Business Reporter
BUSINESSES owed money by the Government have been cautioned against engaging consultancy firms or agents to recover outstanding payments, as Treasury will not recognise or reimburse any fees incurred through such arrangements.
The warning, which was made by the Minister of Finance, Economic Development, and Investment Promotion Professor Mthuli Ncube in a statement, shifts the financial risk onto creditors who choose to engage intermediaries to collect overdue payments, as the Treasury seeks to reinforce compliance with established procedures for settling legitimate claims.
“It has come to the attention of Treasury that some suppliers and contractors who are owed money by Government for goods and services rendered to Ministries, Departments and Agencies (MDAs) have been engaging third parties to pursue the settlement of outstanding payment claims on their behalf, in exchange for a fee or a percentage of the contract value,” said the Minister.
Prof Ncube said creditors should instead use official channels to pursue outstanding payments.
“Treasury wishes to clearly advise all Government creditors that they should not engage any third-party intermediaries or so-called consultancy firms to pursue Government outstanding payments to service providers and contractors.”
He said Government would not assume any financial obligations arising from such arrangements.
“Government will not entertain claims or obligations arising from arrangemen vernment arrears,” Prof Ncube said.
responsibility for any fees, commissions, percentages, or other costs arising from such arrangements.”
The directive also places responsibility on MDAs to reject claims submitted by intermediaries purporting to represent suppliers and contractors.
“All Ministries, Departments and Agencies have been directed not to tolerate claims submitted by consultancy firms or other third parties purporting to act on behalf of Government creditors in the recovery or facilitation of payment of Government arrears,” he said.
Treasury also cautioned Government departments against directing suppliers and contractors to follow up payments directly with Treasury, saying such practices undermine established payment systems.
“Similarly, Ministries, Departments and Agencies have been advised to desist from delegating their responsibilities to suppliers or contractors to follow up on payments directly with Treasury as it is completely against Government systems and procedures.”
Prof Ncube further warned businesses against firms claiming they have the authority to unlock Government payments.
“The business community is further advised that no consultancy firm, agent or other third party has the authority or mandate to facilitate, guarantee or secure payment of funds owed by Government.”
“Therefore, Government creditors who choose to engage such entities do so at their own risk and should not expect Government to recognise or settle any resulting fees, commissions or other associated costs.”
The Treasury directive also covers holders of Treasury Bills, with Prof Ncube saying Government would not entertain requests to discount TBs based on their maturity profiles.
“Furthermore, Treasury will not consider any requests for discounting of Treasury bills as their maturity profiles were set strictly in line with Government cash flows,” Prof Ncube said.
The warning comes as Treasury reinforces official payment procedures for Government creditors, who are being urged to deal directly with the MDAs that contracted them.
Prof Ncube said claims must go through the established processes for verification, processing and settlement.
“All Government creditors are, therefore, being urged to approach directly the respective contracting Ministries, Departments and Agencies and to follow the established procedures for the verification, processing and settlement of legitimate payment claims,” he said.
The move is expected to curb the emergence of intermediaries seeking to monetise Government arrears by charging suppliers and contractors’ fees for facilitating payments that should ordinarily be processed through established public finance systems.
