VUT_Report 2018_Finale

VAAL UNIVERSITY OF TECHNOLOGY
ANNUAL REPORT 2018
Introduction
The University strives to manage and maintain systems of internal
control to provide reasonable assurance to Council, through its
Audit and Risk Committee. Such controls support an operational
environment that promotes the safeguarding of University assets,
the preparation and communication of reliable financial information.
Audit and Risk Committee Charter
The Audit and Risk Committee has adopted a formal charter
that in the prior year has been approved by the Audit and Risk
Committee of Council. The overall objective of the Audit and
Risk Committee Charter is to assist the VUT Council in fulfilling
its governance and oversight responsibilities for the:
• Financial reporting process;
• System of internal control and management of risks;
• Audit process; and
• The process of monitoring compliance with laws and regulations,
and the Code of Conduct.
Audit and Risk Committee Membership and
Meetings
The Audit and Risk Committee of Council, whose Chairperson
is an external member of Council (and an appointee of SAICA),
was established in terms of the Higher Education Act, 1997
(as amended). The constituencies of the external members
include appointees from CSIR, Donors, Convocation and the local
municipality, who are independent of the University’s executive
management.
The Charter specifies the Composition of the Committee as:
• Four external members of Council;
• The Vice-Chancellor and Principal;
• The Deputy Vice-Chancellor responsible for finances (Chief
Financial Officer);
• The Executive Director: Finance;
• The Secretary to the Committee is the Registrar;
• The Internal and External Auditors (on advisory and expert
capacity); and
• Office of the Auditor-General (on advisory and expert capacity).
The chairperson resigned after attending only one meeting,
while most meetings did not quorate and another member resigned
towards the end of the year.
Financial Management and Internal Controls
Organisational policies and procedures, structures and values
are some of the controls implemented by Management. The
initiatives taken by Management to improve the control
environment are ongoing and will continue into the future.
Information systems and internal controls are audited by
external and internal auditors on an annual basis.
Management is responsible for implementing internal and
transparent financial management controls which include
information systems on financial and operational matters,
compliance and sustainability issues. Quarterly financial
management reports are compiled and discussed by a properly
constituted Finance and Risk Committee of Council that meets
at least four times per annum to deliberate on the following:
• Assessment of all areas of financial risk and the management
thereof;
• Review/approval of external audit plans, findings, problems,
reports and fees;
• Compliance with the Code of Corporate Practises and Conduct,
and
• Compliance with Higher Education Institution’s Code of
Ethics.
The Audit and Risk Committee of Council serves both Management
and Council and evaluates the response on the abilities and
duties of the external and internal auditors, ensuring that all
major findings reported on have been satisfactory resolved and
that corrective measures are taken to address deficiencies. The
Audit and Risk Committee reports audit findings and risk related
matters to Council, in addition to matters considered necessary
for Council’s approval and/or action. In the current year the two
meetings were not chaired by an appointee of SAICA as required
by the statutes.
The auditors have unrestricted access to the financial records
of the Institution and the Audit and Risk Committee ensures
that their independence is in no way impaired. Meetings are
attended by external and internal auditors and designated
members of Council.
Internal Audit Function
The role of the Internal Audit Services is to provide independent
assurance on the adequacy and effectiveness of the internal
control systems, as well as financial controls on an ongoing basis.
Findings and recommendations are reported to Management
and the Audit and Risk Committee. Internal audit adjusts its
106