Induction Programme Deans and Heads of Departments TUT FINANCES Part 1 Financial Model Part 2 Budgeting Process

PART 1 FINANCIAL MODEL INDEX Corporate Governance Structure Compliance Income Model Expenditure Model Financial Sustainability Accounting Structure Education and General Activities Specifically Funded Activities Student and Staff Accommodation

Corporate Governance Structure

Compliance King II Code Public Finance Management Act No. 1 of 1999 Higher Education Act No. 101 of 1997 Public Audit Act No. 25 of 2004 Regulations for annual reporting No. 1240 of 2003 General Accepted Accounting Principles (GAAP) and Statements (IFRS) Financial Policies, Rules and Regulations

Income Model Government Subsidy Block Grants Earmarked grants Own Income Student Fees Third-stream income

Government Subsidy Block Grants - Teaching input * - Teaching output * - Teaching output development - Research outputs * - Research development - Institutional factors * Detailed in following tables

Subsidy Model (Teaching input) Funding Grid Weightings

Subsidy Model (Teaching output)

Subsidy Model (Research outputs)

Government Subsidy (cont) Earmarked Grants Student financial aid (NSFAS) Institutional restructuring Finance Cost (Loan subsidy) Community development projects

Own Income Model Student Fees Subject Fees Subject Levies - Tangible items - Consumable material - Direct service Third Stream Income Short Courses Research Grants Centres, institutes and campus businesses Donations and grants

Expenditure Model Personnel Expenditure Salary expenditure Post-retirement provisions Other expense items Goods and Services Finance Cost Capital expenditure

Financial Sustainability Improve Wealth Budget for surpluses Improve liquidity Improve solvency

Balance Sheet 2005

Accounting Structure Consolidated Results Financial accounts Management accounts Financial Accounts Balance sheet Income statement Cash Flow statement Management Accounts Education and General Specifically funded activities Student and Staff Accommodation

Education and General Subsidized Activities (B-cc’s) - Faculties - Support Divisions Other Education & General Activities - Short Courses (D-cc’s) - Independent Funds (E-cc’s) - Departmental Funds (F-cc’s) - Book/Trusts Funds (G:b-cc’s) - Institutes & Centres (H-cc’s) - Campus Businesses (J-cc’s) - University Research (L-cc’s) - Loan Funds (S-cc’s) - Reserves (U)

Specifically Funded Activities Projects (G:a-cc’s) Bursary Funds (K-cc’s) NRF Funds (M-cc’s) Research Other (Ext) (N-cc’s)

Student and Staff Accommodation Residences Flats Guest Houses Restaurants Catering

PART 2 BUDGETING PROCESS INDEX Link to Strategic Objectives Financial Planning Tool Budget Process Budget for 2007 Benchmarks Sources of Funds Application of Funds Budget Control Management Reports Contact Persons

Link to Strategic Objectives Institutional Operating Plan for 2006-2010 as approved by the Department of Education over the longer term. Key Performance Indicators and TUT targets as defined by goals, objectives and measurable activities over the medium term. Focus areas for increased efficiency on the short term.

Budget Process Budget templates are distributed to all cost centre managers for completion The Financial Control Department liaises with all DVC’s, Deans and cost centre managers to address any problems or queries. Executive Management Committee (EMC) members to finalize their allocations with their sections Finance prepares the final document for the Finance, Planning and Resources Committee (FPRC) FPRC formulates a recommendation to Council Approval by Council Loading of budget onto the accounting system (ITS)

Budget for Education and General Activities for 2007 Benchmarks Sources of funds Application of funds

Benchmarks Department of Education (DoE) benchmarks (as contained in the Institutional Operating Plan (IOP)):

Sources of Funds

Application of Funds

Budget Control Signing authorities are assigned to each cost centre Budget is managed per line item (account) Obtain quotes or tenders through the Procurement Department Ensure enough funds before placing an order through Procurement Dept. Funds can be moved by budget managers between accounts within a cost centre. Veriments between cost centres must be done through the Financial Control Department. Commitment is raised after placing an order to provide for the payment of invoices.

Spending of Capital Budgets Capital expenditure during the first quarter is discouraged in general. Efforts must be made to extend payment beyond 1 April. Spend capital budgets evenly throughout the period 1 April to 30 September. Procurement of orders for capital projects close on 30 September. Procurement of orders for all other capital items close on 30 October. Be in time to commit the current budget funds for 31 December.

Management Reports Sources of Information Accounting System (ITS) Management Information System (MIS) Access control to be arranged through the Financial Control Department: Ms Petro Barnardo x 5051

Contact Persons Financial Strategies and Planning: Chief Financial Officer: Dr Doeke Tromp (x5056) Policy and Controls: Director: Financial Control: Mr Theo Madurai (x5054) General Ledger: Senior Accountant: Financial Control: Petro Barnardo (x5051) Accountant: Financial Control: Alida van der Walt (x5715) Budget: Senior Management Accountant: Gillie du Toit (x5697) Accountant: Budgets: Raymond Lebethe (x4956)

End of Presentation Thank you!