annual financial review The University’s financial reporting and preparation of financial statements is done in accordance with International Financial Reporting Standards (IFRS), as well as the Department of Higher Education and Training (DHET) reporting requirements for Higher Education Institutions. The core income stream of the University, namely subsidies and tuition fees, has continued to increase in 2021 as a result of: • An increase in the subsidy factor applied by DHET, resulting in an increase of 3,7%; and • An increase of 12,4% applied to gross tuition fees due to the mix of programmes. The level of student debt for unfunded students continues to grow. The pattern of payments from unfunded students has not improved in 2021, and other options need to be considered in 2022 to encourage payment. This has resulted in an increase in the provision for bad debts of R41m, based on the three-year cycle. The University has been fortunate that the quality and frequency of payments for NSFAS funded students has continued to improve the financial sustainability of the University when compared to prior years. In 2021, the University completed two major projects, namely the Navarre Residence Extension in Wellington, and the Bulk Water Upgrade in Bellville. Backlog maintenance has continued to be addressed as a priority, and a large number of other projects have been completed across the various campuses. Student accommodation in Wellington has been increased by 212 beds with the completion of the Navarre Residence Extension. The overall leased residential offering has been marginally decreased with the removal of a block in New Market Junction, Woodstock. A number of existing leases were renewed at a favourable escalation rate in terms of the parameters set by CPUT. Management continues to set budget directives annually for the next budget year, which are based on achieving the Vision 2030 priority projects, and the CPUT Strategy. It has thus been possible to achieve our plans due to the improved certainty of the University’s cash flow, despite the challenges of reduced funding resulting from the economic impact faced by the country as a whole.
52 | annual financial review
