| ####

57 / 68

57 / 68

Mangosuthu University of Technology Annual Report

55

10. 2015 ANNUAL FINANCIAL REVIEW

The Finance and Remuneration Committee (FRC) met as

scheduled during the year to consider various financial

and remuneration issues. Financial sustainability and cost

reduction were the major focus for the FRC during the

year under review.

The institution has been operating at a deficit. However,

it should be noted that the institution is operating at a

surplus before provisions and estimates. Provisions and

estimates are mainly as follows:

• Provision for doubtful debt.

• Provision for pension liability.

• Depreciation.

We always budget for a surplus before provisions which

are a non cash item. The statement of comprehensive

income distinguish between Council controlled funds,

earmarked funds, Student and staff accommodation.

Various measures have been taken to ensure financial

sustainability of the institution. The following were the

major contributors to the deficit:

• Post- retirement medical liability.

• Operation of student residences

• Provision for doubtful debt

Provision for doubtful debt remains the major contributor

to the deficit.

Budgeting Process

The budget was to support the implementation and

achieving the objectives of the APP. The budget takes into

consideration cash available. We try to match expenditure

against cash available.

There is a budget committee responsible for reviewing

and recommending the budget to the Finance and

Remuneration Committee.

Financial Aid

NSFAS

There were 7 989 students who applied for NSFAS

funding. There were 5 965 students who were allocated

NSFAS funding amounting to R175.888 million. In 2014,

6 172 students were funded for R167.512 million. The

slight decrease in 2015 is as a result of the increase in cost

of study.

National Skill Fund

There were 925 students funded by NSF amounting to

R22.536 million.

Bursaries and Scholarships

Bursaries and scholarships amounted to R23.632 million

and funded 743 students.

Financial Highlights

Income:

Council controlled income

Council controlled income amounted to R414.429 million

compared to R390.272 million in 2014 which is a 6.2%

increase.

Government subsidy increased from R237.156 million in

2014 to R243.516 million in 2015 which is 2.7% increase.

Tuition fee income increased from R140.652 million in

2014 to R157.575 million in 2015 which is a 12% increase.

The fee adjustment was 9% in 2015.

Restricted income

Restricted income amounted to R35.079 million. Restricted

income is mainly earmarked grants from the Department

of Higher Education and Training.

Student accommodation

Income from student residence fees increased from

R120.390 million in 2014 to R127.096 million in 2015 which