VUT_Report 2018_Finale

VAAL UNIVERSITY OF TECHNOLOGY
ANNUAL REPORT 2018
planning accordingly to ensure that the testing of controls is directed
at areas where risk has been identified.
During 2018 PwC and Indyebo Consulting presented to the Audit
and Risk Committee reports to two meetings, and the Committee
placed reliance on the internal audit function performed.
External Audit Function
The role of the External Audit service is to provide an opinion on
the financial statements prepared in accordance with International
Financial Reporting Standards (IFRS) and the requirements of
the Higher Education Act of South Africa. The external audit
opinion is based on executing an audit in accordance with the
Public Audit Act of South Africa, the General Notice issued in
terms thereof, and International Standards on Auditing (ISAs).
In accordance with the Public Audit Act of South Africa (PAA),
and the General Notice issued in terms thereof, the External
Auditors are required to report findings relevant to the reported
performance against predetermined objectives, compliance
with laws and regulations as well as internal control.External
Audit conducts its audits in terms of the risk-based External Audit
Plan recommended by Management and approved by the Audit
and Risk Committee.
At the beginning of 2018 KPMG and Ngubane & Company presented
reports on the outcome of the audits performed. The External
Auditors had meetings with Managements and in addition, with
the Chairperson of the Audit and Risk Committee before he
resigned. The external audit function has a professional
responsibility to report Reportable Irregularities, in terms of
Section 45(1) of the Auditing Profession Act, 2005. Non-audit
services in the form of agreed-upon procedures in respect of
funding from Department of Higher Education and Training
and from other donors are performed with approval of the
Audit and Risk Committee. After the withdrawal of concurrence
on the appointment of KPMG as external auditors of VUT, the
Auditor General, on the 24th April 2018 made a decision to
allow KPMG to finalise the audit of the current year only and
indicated that audit arrangements for the 2018 financial period
will be discussed after the completion of the 2017 year’s audits.
The Council subsequently appointed Ngubane & Company to
audit the 2018 financial period.
Combined Assurance
Although there is no formal combined assurance model, all
assurance providers have a healthy working relationship. This
entails continuous sharing and collaboration with the aim of
ensuring full coverage.
Financial Statements
The Financial Statements are compiled by Management in
accordance with International Financial Reporting Standards
(IFRS) and in the manner required by the Minister of Higher
Education and Training in terms of Section 41 of the Higher
Education Act, 1997 (Act 101 of 1997). An unqualified audit
opinion for 2018 was issued by the external auditors.
Managing Risks
The VUT Council understands and takes accountability for all
risks that potentially affect the achievement of its strategic
priorities and has delegated the responsibility for overseeing the
adequacy and effectiveness of risk management to the Audit
and Risk Committee.
Risk Management supports Institutional management processes
through the operational risks identified. Operational risks are
linked to overarching strategic focusses to promote a strategy
supporting risk management programme. The University has
embarked on a process of formal risk management, which involves
the identification of strategic and operational risks, as well as
the rating of these risks and the development of strategies
to assist in the mitigation of risks to an acceptable level. The
objective, to ensure a more integrated approach to
managing risks that threaten the organisation is in line with the
requirements of King IV. The University is committed to compliance
with the recommendations of the King IV report.
The Risk and compliance function, on an ongoing basis, ensures
the following processes are in place:
• Maintenance of risk registers at a corporate level, as well as
at academic and support systems levels;
• Monitoring compliance to risk mitigation programmes; and
• Providing education and training on risk management
throughout the Institution.
The Risk Register, however, is a work in progress which needs
continuous monitoring to ensure effective and efficient controls.
The streamlining of the Risk Register and Risk Policy was an
extensive exercise and the Audit and Risk Committee played a
vital and leading role in the process.
Financial Risks
Financial and contractual risks are taken with delegated
authority limits approved by Council. Furthermore, changes
to the funding formula, enrolment and throughput targets and
student debt are areas of risk to which Management applies a
considerable amount of time. Management has been working
with the internal auditors to enhance controls across the system.
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