DISABILITY SERVICES

The Hon. S.G. WADE (14:43): I seek leave to make a brief explanation before asking the Minister for Disabilities a question relating to grant payments in the department of DCSI.

Leave granted.

The Hon. S.G. WADE: On 18 September 2012, I asked the minister a question in relation to the processing of grant payments made by the Department of Communities and Social Inclusion for services rendered by service providers. In the minister's response, he explained the process of how payments are made but failed to answer the issue of late payments. In the two months since that question was asked the opposition is advised that the level of late payments has deteriorated further, with over $5 million of overdue payments to service providers outstanding. My questions to the minister are:

1. How much does the Department of Communities and Social Inclusion owe service providers in overdue payments?

2. Is the department making lump sum payments to service providers to assist with cash flow?

3. Will the minister advise what action is being taken to improve the timeliness of payments of grants to service providers?

The Hon. I.K. HUNTER (Minister for Communities and Social Inclusion, Minister for Social Housing, Minister for Disabilities, Minister for Youth, Minister for Volunteers) (14:44): I thank the honourable member for his most important question. As the chamber will remember, Shared Services SA provides the Department for Communities and Social Inclusion with accounts receivable functions as part of the whole-of-government shared service arrangements. This includes the raising of invoices and the first level of debtor management.

Under the agreed operating responsibilities between Shared Services and my department, Shared Services is required to follow up on overdue invoices. If, once the initial debt recovery processes have been exhausted, Shared Services considers that debts are unrecoverable, Shared Services then needs to provide details to my department, along with recovery steps undertaken, to enable the department to carry out further follow-up action or indeed, if necessary, write-offs.

The department has been liaising regularly with Shared Services over the need for this follow-up to occur. The same pertains to the payment of invoices as well. From an accounting viewpoint, the lag in follow-up has led to an increase in the age of outstanding debt which, in turn, has led to an increase in the allowance for doubtful debts and the bad and doubtful debts expense. The department continues to correspond with Shared Services over the need for this issue, and we will continue to work with our NGO sector agencies and help them through this process.