Tuesday, January 25, 2022

Auditor General confirms MoHW imperiled 98 hotels that provided Covid-19 services

With a history of having “hustled” for a period of time via a mobile catering business, President Mokgweetsi Masisi should know the pain of waiting for days on end for payment that takes too long to come. On becoming president, he should have solved that decades-long problem but, as the Covid-19 audit report shows, that is not happening.

“The COVID-19 economic response road map requires that all government institutions must pay suppliers within five (5) days of receipt of invoices, to stabilize the cash flow for businesses. However, it was noted that the 5-day turnaround time for payment of invoices was not achieved. For instance, a savingram ref; COV19C 5/1/3 I (45) dated 16 July 2020 requesting for funds to pay for quarantine facilities occupation indicated that the hotels had submitted the invoices for services provided from 15 May 2020 to the 9 July 2020 but had not been paid by the 16 July 2020,” reads the report.

During the period in question, some 98 hotels were being used as quarantine facilities for people who had or were suspected of having Covid-19. During the period of the audit itself (August 2020), the auditors found that “some of the facilities were still being used as quarantine facilities despite non-payment of prior service, while other facilities had been utilized more than once without payment for the services rendered.” 

All this and more confirms claims that Sunday Standard heard from hotel managers when it investigated the nature of the business relationship between hotels and the Ministry of Health and Wellness during the high noon of Covid-19. In certain cases, there was a perfectly legitimate reason why payment was made late. As Dr. Christopher Nyanga, the Ministry’s spokesman, explained, the nature and peculiar exigencies of Covid-19 quarantining made it impossible to make prompt payment. 

In terms of government processes, a supplier submits a quotation – upon which a government purchase order (GPO) is issued. The supplier then submits an invoice that references the numbers of both the quotation and GPO. The service or product is supplied in between the GPO and invoice. The nature of Covid complicated matters because quotations necessarily had to be compiled after guests had checked out – after the provision of services and products. Indeed, a hotel couldn’t compile a quotation when a guest’s length of stay would be determined by his/her medical condition.

After the purchase order was issued, hotel staff had to compile and submit an invoice. Both the quotation and invoice had to be signed by a site manager, a “boarding master” or “matron” as it were who lodged with Covid restrictees for the entire duration of their stay. A hotel manager told Sunday Standard that in some cases, staff members had to run around trying to locate a site manager, who would long have checked out himself or herself, to get him or her to sign off on the invoice. Some hotel managers complained that payment took way too long, even when the paperwork was in order – something we were able to independently confirm. 

The government complicated the situation further by failing to align the Corona Virus (COVID-19) Emergency Procurement Procedures for Essential Services with the already existing procurement procedures as well as by making promises it couldn’t keep. As the Auditor General states, retrospective payments for quarantine accommodation services “contravened procurement procedures that require for GPOs to be produced before any service provision.”

On Btv, Masisi had assured the nation that the government would “give businesses some cash-flow relief.” In service of the latter, he announced that “the Ministry of Finance and Economic Development would provide more details on the criteria and guidelines” for implementation of measures to stabilize businesses. A week later, the Permanent Secretary of the Ministry of Finance and Economic Development, Dr. Wilfred Mandlebe, notified the nation, through a public statement, about the Ministry’s economic response to the COVID-19 pandemic. Under the “Ease of Doing Business” sub-section, he stated the following: “All Government institutions to pay purchase orders within 5 days and parastatals to pay within 24 hours”; “Address GABS downtime related issues”; “Improve efficiency of procurement processes”; and “Government to pay all outstanding invoices (arrears) in 2 weeks (P530million).”

However, few, if any hotels, got paid within the stipulated periods and MFED would itself acknowledge and express “regret” about the delay. On the whole, the period within which hotels were to be paid depended on what ministry gave the response. The contract that hotels signed with the Office of the President stated that payment shall be made “within 30 days” of the date of receipt of an invoice after the acceptance and approval of services. From MoHW, Nyanga stated that if everything else was in order, payment could be made within 10 days.  

Going back to the presidency of Festus Mogae, there has always been grave concern about late payment which, in some instances, has caused some businesses to collapse. Former finance ministers in Baledzi Gaolathe, Kenneth Matambo and Dr. Thapelo Matsheka have been quizzed about this issue in parliament. That this issue keeps cropping up despite assurances that the Ministry makes is a problem on its own and portends a future in which more businesses collapse.

In her report, the Auditor General concluded that “delays in processing payments to service providers had led to backlogs and had also negatively affected the service providers’ business operations.” For its part, MFED acknowledged “the frustrations raised by the media relating to failure by government to pay suppliers on time and that this may ultimately collapse businesses if not managed.”

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