By Elesha George
Financial Secretary Rasona Davis-Crump said the revised protocols on vendor-government transactions will ensure that the government gets ‘value for money’ while guaranteeing prompt payments to vendors for their services.
Starting March 1, 2024, the government says it will implement revised protocols on how it conducts transactions with its vendors to eliminate future debts and to reduce instances of delayed payment.
“Ultimately, what we want to be able to do is change the way we’ve been doing business,” she said. “We want to find a way to break this cycle of frustration and based on the revenues that we’re collecting and is available to us, we are able to contract with the business community in a more meaningful way.”
With this new procedure, no department is allowed to accept any goods or services without contracts being signed or permission granted. The government wants to ensure that vendors are paid before the service is rendered on or after delivery.
Central to the revised procedures is the mandate to ensure that the government does not spend outside of what is budgeted and available and to verify the legitimacy and compliance of vendors with statutory bodies. This includes registration with the Inland Revenue Department, Social Security, Medical Benefits, and the Board of Education.
Under the new regulations, vendors must furnish the relevant departments with their tax identification or registration numbers, along with documentation validating their legal registration with the aforementioned entities.
“We have to spend according to the revenue we collect,” she said, insisting the government should not be taking services or goods that it is unable to pay for within a 90-day time frame.
Presently, merchants and service providers are expected to get an invoice from the various ministries and departments and following certain internal procedures, an expense voucher is to be sent to the Treasury Department. The Treasury would then issue a cheque to the various government entities who would then take that cheque to the merchants before service is provided. But sometimes the merchants’ services are taken and then the voucher gets to the Treasury some time in the future which can cause delayed payment for up to one-year ins me instances.
Of course, there will be instances when the government needs those services but may be unable to pay within the stipulated time. In the revised protocols is the requirement for explicit approval from the Office of the Financial Secretary before any transactions occur on credit. Without a signature from the financial secretary, the contract is not valid, and payment cannot be made from the Treasury Department.
“Sometimes, cash flow may prevent the Treasury from making the payment immediately but the department/ministry may require the good or service faster than the treasury can release the cheque.
“There is what we call a credit authorisation form that will be signed off by the Office of the Financial Secretary that the department can provide to the vendor.”
According to Davis-Crump, this procedure has been done before but it is necessary to implement them again for better relations amongst those trading their services and the government.
In the new rules, any goods, services, or work undertaken in violation of the government’s procurement procedures may not be considered a legitimate liability of the government.
Businesses that would have rendered their services before March 1 will still be processed and paid.
