Page 52 - Transformation Report 2021

Organisation which helps communities and affords them an 3.1 Financial Sustainability
opportunity to continue with education. The HR Learning There are many levels of uncertainty as we grapple with
and Development unit has also identified other training short-term solutions to ameliorate the impact of shrinking
and development opportunities for these insourced government funding. Council has set a new sustainability
employees to ensure that the skills gaps identified are target, that Council-controlled reserves should equal
narrowed and ultimately closed. the annual Council-controlled operating costs. The ratio
is currently 0.55 (Annual Financial Statement 2020), and
In 2021 twenty of these employees participated in a to achieve 1.00, the University would need to increase
Communication SLP which was funded by Education, unrestricted Council reserves by R1.09-billion. This would
Training and Development Practices Sector Education be in addition to the salary budget benchmark indicator,
and Training Authority. Results received showed that as well as targeting a surplus of between 5% and 10% to
seventeen of the twenty participants completed this SLP, grow reserves.
which is the highest completion rate thus far associated
with the Learning and Development initiatives focused on The financial sustainability of the university will ensure that
upskilling employees in support services. in the medium to long term, the recurrent cost structures
are financed from recurrent revenue streams excluding
Further training initiatives being planned include finance income and that earmarked reserves for funding
supervisory skills for cleaning supervisors; compliance five-year capital maintenance, replacement of teaching
training for the horticulture supervisors and team leaders; and research equipment and IT infrastructure plans are
driver training for protection services response teams, maintained. The University will confront these challenges
and customer service and business etiquette training for by means of its strategic approach to financial planning
support services. and management.

There has been progress with the participants of the A Sustainability and Institutional Viability Task Team (SIVTT)
Frontline Leadership Development Programme, two was established with the primary purpose of promoting the
Managers from Catering Services have completed their sustainability and viability of Nelson Mandela University by
Intermediate Leadership Programme. The completion researching and advising on resourcing the achievement
of this programme will enable them to register for of Vision 2030, including phasing and prioritisation. In
the National Diploma in Management in 2022. Two response to these imperatives, the SIVTT began its work
more participants from support services enrolled in the by setting up various working groups to oversee wide-
Intermediate Leadership Programme for 2022. ranging interventions such as sustainability modelling
and scenario development, academic optimisation and
3. Strategy-Aligned Budgeting and strategic differentiation, improved operating efficiencies
Resource Allocation and cost-effectiveness, as well as strategy-aligned
resource mobilisation and budgeting. Each working group
The budget aims at resourcing the academic project was tasked with identifying opportunities to optimise
and core processes while driving strategic initiatives various revenue streams, including subsidies, fees and
and growth areas in a sustainable manner. In striving for third-stream income as an essential precondition for long-
financial sustainability with a strategy aligned allocation of term sustainability.
resources, the planning and budgeting strategy adopted
over the next two budget cycles will focus on recovery A key sustainability indicator is the salary benchmark which
budgets, Vision 2030 and resourcing of its related was set at 65% up until the re-integration of previously
Strategic Plan in a phased approach. A surplus budget outsourced employees. This indicator then spiked to
after investment income was targeted, while investment 67.5%, resulting in finance income being used to balance
income from non-restricted or earmarked was utilised to operations. A deviation was requested for 2022-2024 to
grow reserves according to the Council’s performance allow the budgeted indicator to be increased to 66% to
objectives of between 5% and 10%. fund mission-critical posts as part of the implementation of
the Council-approved organisational redesign outcomes.
In addition, the University targeted medium to long term
growth in unrestricted reserves to cover annual recurrent The 2022 Annual Budget and Annual Performance Plan
costs in accordance with the following sustainability was tabled for approval by Council. The budget includes
indicator: Council-controlled reserves / annual recurrent a 4.23% increase in tuition fees and a 6.23% increase in
expenditure on Council-controlled expenditure. The student accommodation fees as proposed by the DHET.
budget and three-year financial projection took into A balanced operational budget for 2022 was presented
account the impact of COVD-19 as well as new ways of to Council with a R42.5-million surplus after investment
work. The University continue to support students requiring income (4.25% surplus), which falls short of the Council’s
learning devices via the learning device programme, with current performance indicator of a reserve accumulation
R15 million allocated as bridging funding (which is on a of between 5% and 10%.
recovery basis). This programme will continue in 2022 for
NSFAS funded students.

52 | 2021