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Management was therefore advised by the auditors to take sterner steps to follow up debtors, improving control over and collection of debts. The Board was further advised that management should evaluate the policy on balances receivable from the Government departments and consider charging interest on long outstanding balances, in an effort to recover the highest interest charges on overdrafts and loans. 

In response management stated that the Ministry had not been paying debts in the last 2 years citing budgetary challenges. However, the Ministry had started paying the outstanding debts. Management also stated that from April 2018 to date P84 million had been paid and that for long outstanding debtors other than the Government, they had engaged debt collectors to assist with recovery. Other measures included freezing the customer accounts. 

## 3.2 Enforcement of Credit Terms for Customers – Repeat Finding 

During the review of the Trade Receivables the auditors noted that certain customers had exceeded the credit terms set for them as the examples below show: 

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The auditors advised that if credit terms were not enforced it could lead to long outstanding balances receivable from debtors leading to cash flow difficulties. It could also lead to the Board providing additional credit to customers without appropriate consideration. The auditors therefore advised management to review the currently established credit terms regularly and revise them as necessary so that they could then be used effectively to closely monitor outstanding receivables balances, to provide early warning of problem accounts, and to prevent additional credit from being approved without appropriate consideration. 

In response management stated that appropriate action had been taken for customers who had exceeded credit terms, including attaching property and handing debtors to debt collectors. 

