Hospitality establishments find themselves in a Catch-22 situation as the only real client there currently is pays late the money that they desperately need to cater for Covid-19 restrictees who are quarantined and isolated at their establishments. On the other hand, the Ministry of Health and Wellness claims that suppliers are also to blame for delayed payment.
At a time this unusually difficult, the owners and managers of these establishments (being hotels and lodges) know better than speak on the record because they would effectively burn the rickety footbridge they use to cross from the realm of near-certain financial ruin to barely-surviving.
Experiences of individual hospitality establishments differ but their precise description would compromise the identity of sources we want to protect. All find themselves having to do business outside the norm. However, both parties, being the Ministry of Health and Wellness and the establishments themselves, acknowledge that Covid-19 presents an unusual situation with regard to the provision of hospitality and getting paid for it.
“The large volume of people being quarantined on account of being on contact tracing and the unpredictable nature of the COVID-19 infections defies current government payment timelines and protocols,” says Christopher Nyanga, MoHW’s Chief Public Relations Officer.
Ordinarily, a supplier submits a copy of a quotation which the accounts department of a procuring entity uses to generate a government purchase order (GPO). Only after a GPO has been issued can a supplier compile and submit an invoice and get payment. Any number of people but staying within occupancy capacity, can be taken to a hospitality establishment when accounts offices that generate quotations are closed. A hotel manager says that there is also no way of knowing how many people would be coming to stay at a hotel and for how long. How long Covid-19 restrictees stay depends on their medical condition – which can’t be predicted. The latter means that a hotel or lodge cannot compile a quotation (which requires quoting specific figure relating to days spent and amount claimed) until after guest-restrictees check out.
According to Nyanga, there are more than 300 private facilities across the country which receive people on quarantine on an almost daily basis.
“Payments to all these facilities are processed centrally, for purposes of accountability and strict monitoring,” he says. “This has thus contributed to the delay in payment to some of these private facilities. However, there is also some delay that can be attributed to some facilities which submit claims late or with incomplete information. Such claims are returned – which also results in further delay to process the payment.”
Part of the problem, as Sunday Standard understands, is that some establishments are unfamiliar with the quite elaborate process of compiling the paperwork because they have never dealt with this situation in the past. During the pre-Covid era, most of the business for hotels, lodges and guest houses came from civil servants who crisscrossed the country to attend all types of meetings like conferences, workshops, symposiums and retreat – and a new species of meeting called an “activation.” When they did, the accounts offices at their duty stations gave them hard cash (called “imprest”) that they used to pay establishments that they stayed at. This was a simple transaction that didn’t involve having to compile quotations and invoices – which have to be cross-referenced with GPOs. Only now being introduced to this process, some establishments reportedly submit invoices when they should be submitting quotations. Such invoices – such as they are – would not have GPO serial numbers because the GPOs themselves would not have been issued in the first place. In some cases, the dates are mixed up or some vital information is not provided.
However, as one supplier is keen to point out, accounting staff in some other hotels are familiar with this laborious process but even then, still experience inordinate delays in getting their payment.
Nyanga’s justification for the delayed payment is that claims have to be processed more rigorously than in normal government transactions.
“Most of these facilities receive clients on urgent basis, even before the Government Purchase Orders (GPOs) could be issued. As a result, there has to be a rigorous process to ensure that the service paid for, has actually been rendered. As such, many are aware that processing of claims for payment will take longer than normal claims,” he says.
Still, a source complains that always having cumbersome, the payment process is now doubly so for those isolated or quarantined for Covid-19.
Each group of restrictees is entrusted to the care of what is called a “Site Manager” from the District Health Management Team. The Site Manager performs such tasks as taking the temperature of restrictees on a daily basis, supervising the administration of medication, enforcing relevant public health protocols (which includes ensuring that restrictees don’t leave their rooms), seeing to the general welfare of restrictees and acting as the link between the restrictees and the establishment.
Says a hotel source: “Site Managers have to verify each quotation – to which the guest list is attached. That should be enough to verify that the claim is not fraudulent but they also have to sign the invoice which is issued days or weeks after the guests and the Site Manager have long checked out. This is completely unnecessary and a complete waste of time because the information on the invoice is no different from that on the quotation. It can take more than two weeks for GPOs to be issued – at which time the site manager would have long left the hotel. You then have to track them down and physically take the invoice to them to sign.”
Sunday Standard learns that in one Gaborone case, hotel staff had to make an unplanned and costly out-of-town trip to get a Site Manager to sign an invoice. In another case, a Site Manager who had already signed a quotation couldn’t sign its invoice because his contract ended before the latter was issued. Site managers typically take days off at the end of the hotel stays and in some instances, are not available on the phone when the invoice is issued. These and other peculiar situations – which were never planned for – are said to be causing a headache for establishments.
Nyanga says that when all submitted claims are in order, it takes up to 10 days to pay from the day the claim is submitted to the accounts office.
“This means that claims from outside Gaborone may take longer if their arrival is delayed,” he adds. “However, when there are some mistakes in the claim forms, or some information missing, it can take a month or more because when dealing with public funds, it is necessary that all processes are followed and all funds are properly accounted for.”
On the contrary, some establishments say that it takes a lot more than 10 days – whole months even – for payment to be made.
“Invoices that come in are sorted into batches, which have to reach a particular number before they are processed,” says a hotel manager. “What that means is that a claim can get stuck in the queue while waiting for invoices from other hotels to be submitted. You can never be certain when those invoices are going to come and when you are going to get payment.
At least one establishment says that it is owed money from last year.
Nyanga denies an allegation made to us, that some payments are delayed because the Ministry is broke.
“It is not a question of unavailability of funds. It is the nature of this business transaction which requires that payments be made retrospectively. In fact, at other times, some private facilities would wait for more clients to be brought before they could submit claims for payment so that they can get paid in bulk,” he says.
While there may be perfectly legitimate reasons why payment takes longer than it usually does under normal circumstances, establishments point out that the late payment is making it extremely difficult for them to stay afloat and continue to provide service to the government. One hotel owner says that while one is still jumping through hoops to get paid payment for services rendered, a new set of guests arrive.
“You are expected to provide the new guests with food, beverages and laundered bedding – all of which cost money but the money that should buy and pay for all those things takes way too long to come.”
Ideally, establishments that are unhappy with the current arrangement would just terminate their relationship with the Ministry. However, a Covid-depressed economy doesn’t afford them such luxury.