Page 80 - DUT Annual Report 2024

REPORT OF
THE CHIEF FINANCIAL OFFICER AND THE CHAIRPERSON OF THE FINANCE COMMITTEE
Overview
In 2024, South Africa’s higher education sector continued to operate under significant macroeconomic strain, characterised by persistently low GDP growth, elevated unemployment levels, and intensified fiscal consolidation. These conditions directly impacted institutional financial sustainability, with universities facing mounting pressure to balance operational demands against constrained revenue streams.
The Department of Higher Education and Training (DHET), in response to national budgetary limitations, implemented reprioritisation of funds which resulted in a reduction of the block grant allocation, the primary source of first-stream income. While NSFAS expanded its reach, particularly among financially vulnerable students, it further entrenched institutional dependence on government funding.
Financial vulnerability across the sector was also exacerbated by the continued escalation of outstanding student debt. Limited access to funding for the “missing middle” students who fall outside NSFAS eligibility yet cannot afford full tuition, combined with weak graduate absorption into the labour market, has elevated default risk and placed additional strain on university cash flows.
Despite these financial challenges, the university is pleased to report a positive financial year, achieving a net surplus from its operations. This accomplishment demonstrates the institution’s commitment to financial sustainability.
Financial sustainability
The university prioritises achieving long-term financial stability by fostering a sustainable and efficient business model. To ensure this objective aligns with ENVISION2030 goals, consistent and adequate investments are directed towards core operations, educational infrastructure, and research and innovation initiatives.
The DUT’s Council ensures the prudent management of financial resources to guarantee the availability of funds for future development and unforeseen contingencies. Capital expenditure budgets are meticulously crafted and consider both available financial reserves, readily accessible cash and future income flows. Debt financing is employed strategically only when repayment terms and interest rates are favourable and the Council maintains a conservative debt-to-equity ratio not exceeding 40%. In addition, the University consistently maintains free cash reserves equivalent to at least seven months of operating expenditure.
The university’s financial health is closely tied to the broader economic climate, both globally and within South Africa. As state funding is a primary source of revenue, recent economic slowdowns and reallocation of government resources have presented financial challenges.
Financial Management
The DUT prioritises sustainable development; strong financial management and good governance as core pillars of this strategy. The university emphasises responsible stewardship of its financial resources, adherence to sound financial practices, and proactive resource planning to guarantee the successful execution of ENVISION2030.
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DUT ANNUAL REPORT 2024