The effectiveness of the operation pay on time initiative on KwaZulu-Natal provincial departments.

Abstract

SMMEs are continuously faced with the dilemma of late and non-payment of invoices with these delays becoming increasingly detrimental to the country's economy. The Provincial Government Departments are the major culprits of this unwelcome practice as they work against the Country's Economic Growth Strategy stipulated in the National Development Plan 2030 (NDP). Despite all procedures and efforts employed to assist departments in complying and making payments on time, the struggle continues for SMMEs. The KwaZulu-Natal Provincial Departments (KZNPDs) are dedicated to paying their service providers within the 30days payment interval and following the full terms of a contractual agreement. The KZN Department of Treasury developed an initiative called "Operation Pay on Time (OPOT)". The initiative is aimed to assist all KZNPDs to ensure payments are made on time to service providers. This is a case study research based on the KZN Department of Treasury’s initiative “OPOT”. Accordingly, the research study endeavoured to establish the effectiveness of the assistance provided to curb the issue of late or non-payment. The objective is to firstly establish the underlying factors of late or non-payment and evaluate the effectiveness of the OPOT initiative on the identified factors to stimulate efficiency in KZNPDs. The investigation comprised a mixed-method approach where information was gathered using a means of survey and interview sessions with descriptive and inferential statistics being utilized. Additionally, explanatory and thematic analyses were also used to describe and dissect subject information. The study participants comprised 10 senior managers and 60 finance officials in KZNPDs. Using a convenient sampling strategy, key informants and survey respondents were selected. The total number of observations (n) and proportion (%) in a variable was computed using the “tab” command of Stata 11. The graph box displaying the median and distribution of observations was created using the “graph box” command of Stata 11. Relationships between two categorical variables were investigated using Chi-Square analysis and results were reported with three parameters i.e., number of observations (n) Chi, and P-value. Examination of data disclosed that KZNPDs are struggling to ensure payments are made on time as a result of unresolved petty issues. The study revealed that the OPOT initiative is effective, however exhibiting some shortfalls of no proper systems or elements of controls in place. Furthermore, the study divulged that the OPOT initiative would be more effective when the factors of late or non-payment of invoices are filtered into any initiative or assistance provided and are post-effect rather than an after-effect initiative.