Will the Department of Education pay on time?

The Department of Education & Training and TAFE Commission are in the process of shedding jobs in the accounts payable area.

This is part of a proposed restructure which will abolish 1,170 education support jobs across the state.

"The result of cuts to accounts payable staff will be that suppliers will not be paid on time," says Sue Walsh, President of the Public Service Association of NSW.

"This will particularly hurt small businesses who have difficulty with interruptions to their cash flow and cannot afford to be long-term creditors to huge organisations like DET and TAFE. Late payments mean that businesses not only wait longer, they will have to supply a greater amount of credit," she said.

"This could be a very substantial problem as DET and TAFE are huge departments with big requirements for goods and services.

"TAFE and DET currently operate on the Government policy of payment within 30 days (unless a specific time is written into the contract). One of the first acts of the Carr Government when first elected was to insist government agencies paid their bills on time and treat their business clients with respect.

"The flow-on effect will be that suppliers of goods and services will treat TAFE and DET orders with the same lack of punctuality. Or they will be reluctant to do business with DET and TAFE - this is a loss-loss situation. The bigger losers will be the students as the purpose of purchases is to aid their education.

"Late payments may also incur extra costs as it is Government policy to pay interest on overdue payments," says Ms Walsh

As well as staff cuts contributing to late payments another factor that will exacerbate the situation is that TAFE and DET have incompatible accounting systems. TAFE has TIFS (TAFE Integrated Finance System) and DET has the J D Edwards package. The core of the plan is to transfer accounts payable from TAFE institutes into the DET office at Bathurst.

Prior to announcement of the TAFE/DET restructure the purchase of a unified information system, of which accounts are a part, was expected to cost $300 million and take 2-3 years to install.

Extracts from TAFE Policy on payments

• payment of accounts must be made within the time stipulated on the contract, invoice etc, with the supplier, or if no time is stipulated, within 30 days after the receipt of an invoice where the stores/services are satisfactorily provided
• suppliers have the right to refer complaints and/or claims for the payment of interest of up to 20 per cent per annum to the Accounts Officer, the Commission's Accounts Complaints Officer or the Minister where payment of any account has not been made within the prescribed time,
• all Purchase Orders must carry appropriate advice to suppliers regarding the arrangements for late payment of accounts and
• the cost of any interest payable will be met, (in TAFE NSW's case), from the relevant cost centre accounts "