VUT_Report 2018_Finale

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VAAL UNIVERSITY OF TECHNOLOGYANNUAL REPORT 2018grants of R344 million (2017: R197 million) under deferred incomeare included in liabilities. Post-employment liabilities decreasedby R33.5 million (2017: R34.6 million increase) and are fully coveredwith an investment asset at the moment.778 626 175567 923 582661 559 9822 265 775 7002 092 939 282365 277 0861 184 693 332997 753 605Total assets increased by R172.8 million while the total liabilitiesincreased by R179.5 million in the current year.LiquidityThe current ratio determines the extent to which currentliabilities are covered by current assets. This ratio indicates thatthe University’s current liabilities are covered 1,39 times (2017:1,74) by the current assets. The current assets increased by onlyR117.1 million while the current liabilities increased by R195.2million during the same period. This situation is acceptable andshould be maintained by improving the solvency ratio.Student DebtThe student debt remains one of the greatest financial concernfor the Institution as it has a significant impact on the financialsustainability and cash focus of the Institution in the long-term.The student debt increased from R327.2 million to R501.2million (53.2%) during the current year, compared to an increaseof 20.8% in the previous year. Much energy is focused on creditmanagement practice. The Debt Reduction Strategy was relaxedin 2016 due to the “fees-must-fall” movement. In particularthe first payment was reduced from R3000 to R2000 and hassince not been increased as this issue is still sensitive until thefree education issue is finalised. Council and Management areassessing the situation and further actions will be finalised in2019.Access to Financial AidThe majority of Vaal University of Technology students arefrom poor and working class rural and urban families, and thissituation has placed pressure on the financial resources ofthe University. NSFAS funding remains the only source offunding to many of our students. The increase of the NSFASqualifying limit from R122,000 to R350,000 from 2018 willassist in future. The University also provides various forms ofassistance to deserving students. A total of R12,7 million wasallocated to needy students in 2018 (2017: R12,7 million). VUTis also actively involved with other private bursary providersto obtain more resources to assist students. R47.6 million wasprovided in 2018 (2017: R49,2 million).Infrastructure And Other103
VAAL UNIVERSITY OF TECHNOLOGYANNUAL REPORT 2018ProvisionsThe progress during 2018 on the new building constructionprojects are as follows:• Teacher Education Building at EduCity CampusThe construction progress was delayed due to disruptions andinterference by the community, as well as subsequent legalissues with the Main Building Contractor. The contract withthe Building Contractor was terminated. Council gave approvalto follow the procurement process to appoint a new BuildingContractor, which is currently in progress.• Turn-key projects: 300 bed Residences at EduCity CampusThe 300 bed Residence at EduCity Campus was completed inDecember 2015 but could not be utilized due to unavailabilityof bulk services infrastructure. These services have becomeavailable and connection is in progress. The perimeter fencingis being constructed, and while the project is not yet completed,we expect occupation to be effective from January 2019• Engineering Building Extension – Additional FloorThe construction progress was delayed due to legal problemsof the Main Building Contractor. The contract was terminated.Council gave approval to start with the procurement process ofappointing a new Building Contractor.Council has also taken note of the rate of increase in operationalexpenses especially personnel costs that is higher than theincrease in revenue over recent years as well as the declinein debt collection due to the fees protest wave of 2015/2016.Council is of the view that an urgent intervention is required ifwe are to stabilize the system and the Institution.Council and Management will continuously be committed tomanaging the Vaal University of Technology in such a way thatVUT will be able to successfully execute its mandate for theforeseeable future.PROFESSOR IL RENSBURGADMINISTRATORMR NP MASUDUBELEEXECUTIVE DIRECTOR: FINANCE (ACTING)• Life and Physical Sciences BuildingThe construction is in progress; however this was interrupted byunappointed local contractors. Completion of the building willbe achieved before the end of 2019.• Acquisition of Student housingThe tender process is in progress and the acquisition is expectedto be finalised before the end of 2019.• ICT Infrastructure UpgradeThe tender process will be started in 2019 for phase one and thisfirst phase of the project is planned to be completed before theend of 2019.ConclusionIn general, the financial situation of the University needsto be improved in order to render its services effectively.Through sound financial management, planning and reporting,supported by ethical financial practices, the University canreverse this financial instability and strive to be a financiallystable and sustainable Institution. The University endeavours toachieve this through constant monitoring of developments inthe sector and the financial position of the University.104
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VUT_Report 2018_Finale

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