Dáil Éireann Debate, Tuesday - 28 February 2012
325 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if he will detail an assessment of adherence to Prompt Payment of Accounts Act 1997 by the bodies included in the schedule. [11280/12]
View answerThe Prompt Payment of Accounts Act 1997 requires Government Departments to report each year on details of their accounting practices. The Government is nevertheless very much aware of the cash flow difficulties currently being experienced by SMEs.
In this regard, since 2009, Central Government Departments have been improving their respective payment times and are obliged to pay their suppliers within 15 days of receipt of a valid invoice. This 15 day prompt payment rule was introduced by the Government on an administrative basis.
Departments are required to report Quarterly to my Department on their performance in meeting this target. To date, 9 sets of Quarterly returns have been published on my Department's website www.djei.ie and full details of adherence to the prompt payment rules are available online. The most recent returns, for the last quarter of 2011 will be published on the website shortly. This data shows that inter alia in value terms of 97.8% of invoices were paid within 15 days.
The 15 day prompt payment rule was extended beyond central Government Departments and rolled out to the Health Service Executive, the Local Authorities, State Agencies, and all other Public Sector Bodies, (excluding Commercial Semi-State bodies), in respect of valid invoices received, on or after, 1 July 2011.
As part of this new extended arrangement, parent Departments are required to publish on their respective websites Quarterly composite reports covering those bodies under their aegis. The individual bodies covered by this arrangement are also required to publish their own Quarterly reports on their respective websites.
These new reporting arrangements should ensure that all Ministers will be able to monitor the performance of the bodies under their aegis and will enable them to address any issues with those bodies who are not meeting these obligations.
326 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if he will detail the consideration given to including the National Asset Management Agency in the list of scheduled bodies under the Prompt Payment of Accounts Act. [11281/12]
View answerThe issue of late payment is covered by the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002).
Under these Regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest ("late payment interest") on the amount outstanding. In the absence of any agreed payment date between the parties (i.e. specified in the contract), late payment interest falls due after 30 days has elapsed, provided the invoice is not subject to query. Interest applies until such time as payment is made by the purchaser. The current late payment interest rate from 1 January 2012 is 8% (that is based on the ECB rate of 1% plus the margin of 7%). The Regulations also provide for compensation for debt recovery costs.
The above Regulations repealed Sections 4 to 11 of the Prompt Payment of Accounts Act 1997 (No. 31 of 1997). Sections 1 to 3 and 12 to 16 of the 1997 Act remain in force.
A Ministerial Order made in 2000, under Section 3 of the 1997 Act, entitled the Prompt Payment of Accounts Act 1997 (Amendment of Schedule) Order, 2000 (S.I. No. 383 of 2000), the Schedule to the Order, includes under the definition of "purchasers":
"A Minister of the Government having charge of a Department of State, in respect of the functions for the carrying out of which that Department is responsible to the Minister (including any office or body, not otherwise specified in this Schedule, of such Department, in relation to which functions are vested in the Minister) and whether or not referred to as the Minister, the Department or that office or body".
Accordingly, the National Asset Management Agency, which was established by the National Asset Management Agency Act 2009, and which publishes an Annual Report to the Minister for Finance is already covered by the provisions of the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002).
