Page 92 - DUT Annual Report 2023

REPORT OF
THE CHIEF FINANCIAL OFFICER AND THE CHAIRPERSON OF THE FINANCE COMMITTEE
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 and readily accessible cash. 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%. Furthermore, a minimum of seven months of operational expenses are consistently held in free cash reserves.
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. 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 Management
The DUT prioritises sustainable development; strong financial management and good governance are the 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.
Demonstrating its commitment to long-term financial health, DUT has adopted a principle of surplus budgeting for Council- controlled funds. This strategy ensures the availability of resources to support future development and various university initiatives.
The DUT balances its strategic focus on optimal financial deployment with a commitment to conservative financial management. This is achieved by implementing robust mechanisms that promote financial discipline, while guaranteeing business continuity. A key element of this approach involves careful consideration of free cash and cash flow risks during resource allocation.
The Executive Management Committee bears responsibility for resource allocation, ensuring adherence to established governance processes. This ensures alignment with the university’s strategic objectives and fosters medium-to-long- term sustainability. The Finance Committee of the Council provides oversight for resource allocation and utilisation. They present a comprehensive financial management report to the Council on a quarterly basis.
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DUT ANNUAL REPORT 2023