1. THE HIGHER EDUCATION FUNDING FRAMEWORK and VUT FINANCES Prakash Naidoo

2. WARNING SOME OF THESE SLIDES MAY BE HARMFUL TO SENSITIVE VIEWERS
MANAGEMENT SUPERVISION IS ADVISED

4. Distribution of Higher Education Funds

5. HIGHER EDUCATION BUDGET 100%
Institutional
Restructuring 5%
NSFAS 9%
HIGHER
EDUCATION
BUDGET
100%
Foundation 1%
Earmarked
Funds
12%
OTHER 2%
BLOCK
GRANTS
84%
Former
Vista 1%
TEACHING
INPUT GRANT
53%
TEACHING
OUTPUT GRANT
13%
RESEARCH
OUTPUT GRANT
11%
Institutional
Factor 6%
Approved
FTE
Places
Non research
Diplomates
Graduates
Masters
Doctorates
Publications
Size
Disadv Students
NOTE: ROUNDING TO 1%

6. HIGHER EDUCATION FUNDS 2007-2009

7. TEACHING INPUT GRANT

9. Weighting Factors Funding Group Under Masters Doctoral 1 2 3 4 1.5 4.5
Graduate
Honours
BTech
Masters
Doctoral 1 2 3 4
1.5
4.5 6
2.5 5
7.5 10
3.5 7
10.5 14

10. VUT UNWEIGHTED FTE’s – 2005 (Actual Headcount 17240)
Undergrad
Honours
Masters
Doctoral
TOTAL
Funding Group 1
1170 58
0.3
1228
Funding Group 2
7687
616 12 2
8317
Funding Group 3
2804
231 23 17
3076
Funding Group 4
894 53
954
12556
959 38 21
13576

11. Simplified Example Funding Group Under BTech Masters Doctoral 1 1000
Graduate
Honours
BTech
Masters
Doctoral 1
1000
500
100 10 2
200 3 4

12. Calculation of Weighted FTE’s
Funding Group UG
BTech M D
Total 1
1000
(1000x1)
(500x2)
300
(100x3) 40
2340 2
750
(500x1.5)
600
(200x3)
450 60
1860 3
1250
(500x2.5)
(200x5)
100
3100 4
1750
(500x3.5)
1400
(200x7)
1050
140
4340
4750
4000
2550
340
11640

14. CALCULATION OF TEACHING INPUT GRANT
DOE determines national TIU = units
TIG for 2007 = R
Grant per TIU = R 7728 per weighted FTE
VUT approved total = (Actual 26816)
National actual TIU total =
VUT TIG for 2007 = R

15. TEACHING OUTPUT GRANT

16. Weighting factors for teaching outputs: 2004/05 to 2006/07
1st certificates and diplomas of 2-years or less
0.5
1st diplomas and bachelors degrees: 3 years
1.0
Professional 1st bachelor’s degree: 4 years and more
1.5
Postgraduate and post diploma
Postgraduate bachelors degrees
Honours degrees/higher diplomas
Non-research masters degrees and diplomas

17. Calculating Weighted Graduates
Qualification
Graduates
Weighted
National Certificates
200 50
National Diplomas
2000
B Tech Degrees
300
450
Non Degree Masters 40 20

18. Calculating Teaching Output Grant
DOE determines normative weighted TOU
2007 DOE normed = units
National actual TOU = units
TOG for 2007 = R (alloc R1,69bn)
Balance of TOG allocation used for TDG
TOG for 2007 = R per weighted grad based on actual/normed or R act/act or
R bud/normed

19. Teaching Output Grants
VUT PERFORMANCE
Headcount
17240
Weighted TOU
4342
Actual TOU
2450
Shortfall
1891
Teaching Output Units
Earned TOG R
Unearned TOG* R
Teaching Output Grants
*TDG = R 

20. RESEARCH OUTPUT GRANTS

21. RESEARCH OUTPUT Units based on Academic staff (0.5/1)
DOE determines normative weighted ROU
2007 DOE normed = units
National actual ROU = units (89%)
ROG for 2007 = R (alloc R1,38bn)
Balance of ROG allocation used for RDG
ROG for 2007 = R per ROU

22. VUT RESEARCH PERFORMANCE
Publications 1
Masters (Research)
Doctorates 3
Weighting

23. Unearned Research Grant
RESEARCH OUTPUT GRANT
Actual Research Grant R
Unearned Research Grant R
RESEARCH DEVELOPMENT
GRANT for 2007 = R O 

24. Additional amount added to relevant teaching input grant
Institutional factor grants for disadvantaged students: 2004/05 to 2006/07
Proportion of African + coloured students in relevant FTE student enrolment (SA citizens only)
Additional amount added to relevant teaching input grant
80% and above
10%
75%
8.75%
70%
7.5%
65%
6.25%
60% 5%
55%
3.75%
50%
2.5%
45%
1.25%
40% and below 

25. Institutional factor grants for institutional size Total FTE student
enrolment
Additional amount added to teaching input grant
4 000 and less
15%
6 000
13.6%
8 000
12.1%
10 000
10.7%
12 000
9.3%
14 000
7.9%
16 000
6.4%
18 000
5.0%
20 000
3.6%
22 000
2.1%
and more
VUT
(8.17%)

26. FINAL BLOCK GRANT Teaching Input Grant R 169 463 000
Teaching Output Grant R
Research Output Grant R
Institutional Factor Grant R
FINAL BLOCK GRANT R
VUT SALARIES BUDGET 2007 = R

27. STATE GRANTS Subsidy allocation (2002 weighted FTE’s)
TYPE
Amount (R)
Accountability
Subsidy allocation
(2002 weighted FTE’s)
To be accounted for via the normal external auditing processes
EARMARKED National Student Financial Aid Scheme (NSFAS) To be allocated to students. The applications are processed by VUT and allocations are confirmed by NSFAS
To be accounted to NSFAS via NSFAS external auditors
EARMARKED for interest and redemption of past government approved loans
To be accounted for via a special external audit
EARMARKED Teaching Development Grant in terms of proposals made to the Minister of Education in November 2006 *
To be accounted for separately via a special external audit
EARMARKED Foundation Programmes Grants (Electrical Engineering and Non Destructive Testing) in terms of the proposals made to the Minister of Education in July 2006*
* First time allocation
NOTE: EARMARKED FUNDS MAY ONLY BE UTILISED FOR PURPOSES FOR WHICH IT HAS BEEN
ALLOCATED – UNUSED AMOUNTS MUST BE RETURNED TO THE DEPARTMENT OF
EDUCATION AT THE END OF THE FINANCIAL YEAR

29. Financial Sustainability of Departments/Sites of Delivery
Core Academic Business underpins VUT
Costs of support divisions must eventually be a cost of academic units as these are essential part of the university
Methods of calculation includes business units, cost allocation (ABC etc)
Academic divisions CANNOT survive without support divisions – including student services division

30. EXAMPLE: ALLOCATION OF COSTFA FB FC FD SA SB SC SD HR FI SS
Cost
100
200
300
400 50 60
500
Ratio
FIN 1 10 2 20 3 30
150
0.5 5 25
-100
-500
Costs
170
340
440
610
140 90
100

32. SITES OF DELIVERY S Costs Income Difference Budget In vs Out % A B C D
-25% B
R 7,689,015
R 12,072,676
R 4,383,661
R 17,379,733
-R 5,307,057
-44% C
R 11,243,702
R 15,215,640
R 3,971,938
R 21,056,980
-R 5,841,340
-38% D
R 3,647,040
R 4,493,849
R 846,809
R 7,104,286
-R 2,610,437
-58%
R 57,350,027
-R 20,072,535 Av
-35%

34. THANK YOU