«. 1199 of 20 September 2002 and as subsequently amended by Government Notices 259 of 26 February 2004; 476 of 20 May 2005; 748 of 27 August 2010; and ...»
ANNUAL REPORT AND ANNUAL FINANCIAL
UNIVERSITY OF CAPE TOWN
Incorporated in terms of the Higher Education Act, 1997,
and the Institutional Statute of the University of Cape Town,
promulgated under Government Notice No. 1199 of 20 September 2002 and as subsequently amended
by Government Notices 259 of 26 February 2004; 476 of 20 May 2005; 748 of 27 August 2010; and 408
of 23 May 2012
as adopted by Council 14 June 2014.
DETAILS OF THE COUNCIL OF THE UNIVERSITY OF CAPE TOWN 3
STATEMENTS ON GOVERNANCE AND REPORTS ON OPERATIONSReport of the Chair of Council 4 Self-Assessment by the Vice-Chancellor of performance for the year ending 31 December 2013 17 Institutional Forum Report for 2013 21 Council Statement on Corporate Governance 23 Report on Internal Administration, Operational Structures and Controls (Incorporating the Report on Risk, the Management of Risk and Quality Assurance) 30 Report on UCT Operations during 2013 by the Vice-Chancellor 39 Annual Financial Review 55 Council’s Statement of Responsibility for the Annual Financial Statements 60
2013 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
EXECUTIVE OFFICERSDr M R Price (1, 2, 3, 4 & 6) (Vice-Chancellor) Professor R T Nhlapo (6, 7) (Deputy Vice-Chancellor) Professor S Klopper (4, 5, 6) (Deputy Vice-Chancellor) Professor C Soudien (6, 8) (Deputy Vice-Chancellor) Professor D P Visser (6) (Deputy Vice-Chancellor) EXECUTIVE DIRECTOR: (FINANCE) Professor E O Uliana (4) REGISTRAR and Secretary to the Council Mr Hugh Amoore (5) The COUNCIL as at 14 June 2014 consisted of the Executive Officers and the following members The Most Reverend N W H Ndungane (1) (Chair) Ms DJ Budlender (1, 3, 4) (Deputy Chair) Ms S Barsel Mr G Bloch (8) Mr G Bloor (2) Ms E Brooks (7) Ms Y Dwane (6) Mr Justice IG Farlam (2, 3, 6, 8) Mr JJ Gauntlett SC Ms N Gondwe (1) Mr A Jakoet (3, 4) Professor S Kidson Alderman OM Kinahan (1, 5) Ms L Meyer (1, 7, 8) Ms R Omar (6) Justice CME O’Regan (6) Professor F Petersen (1, 6) Mr TD Petersen (1, 3, 4) Dr H Raubenheimer (7) Ms A Sopitshi Associate Professor U Rivett Mr J Rousseau Mr T Setiloane (6, 8) Mr S Zungu (4) Mr B Zwane (7) 1 = Member of Council Executive Committee 2 = Member of Audit Committee 3 = Member of Remuneration Committee 4 = Member of Finance Committee 5 = Member of Building and Development Committee 6 = Member of Strategy Committee 7 = Member of the HR Committee 8 = Member of the Institutional Forum
The Council is at mid-term as we adopt these statements and as I write this report.
The University’s achievements in 2013 are cause for celebration. Students have performed well, research productivity (and quality) remains on the up, and the contributions made by members of the University through socially responsive work and engaged scholarship speak to the ingenuity and commitment that characterise so much of the University of Cape Town and its staff and students. And we rank first among universities on this continent.
That is not to say that we do not have further work to do. Student success and throughput rates are uneven and not at the levels we wish them to be (although the best in the country); funding and facilities for research place increasing demands on us; and though the University’s finances are healthy, they will only remain so if we manage the ship even better than we have done. And on top of this, there is the increasingly daunting financial aid challenge, a challenge that we must meet if access to a UCT education is not to be denied to students who cannot otherwise afford it.
And so in reviewing 2013, I propose to look at the extent to which the Council’s key objectives for 2013 were met, to record some of the achievements of 2013, to deal with two significant events after the reporting period, (the changes that are to be made to NSFAS funding in 2015, and adoption by the Council of an integrated physical development framework to guide the University in the period to 2030) and to note some key challenges.
Key Objectives for 2013 At the end of 2009 we set six goals for UCT for the years 2010 to 2014. We are now towards the end of this five-year period.
These goals take as given first, that the core business of UCT in teaching and learning and in research and engaged scholarship will continue and be conducted at a very high level of quality, and secondly that we remain financially strong. It is these two givens that I propose to review first.
Teaching and learning:
Our enrolment planning compact with the Ministry and the Department of Higher Education & Training required that we achieve a headcount enrolment of 26 063 students in 2013 (converted to a weighted full-time number, of what are termed teaching input units that the State will fund by way of input subsidy, of 58 111). Head count enrolment for 2013 was 26 114 1 2 while the weighted full-time equivalent total was 62 358 3.
This is evidence of two things: good enrolment management (headcount total just over target) and an increase in the load students are carrying (i.e. more students are carrying a full load) as a result of which the teaching inputs number is 4247 above target. This shows further that that enrolments in Science Engineering and Technology (SET) and higher degrees (both of which attract higher multiples when weighted numbers are calculated) have increased, which is what we would have hoped. But it does mean that nearly 7% of the potential teaching input units UCT generated will not generate State funding for 2015.
Of these 26 114 students 8 626 students were postgraduates This number is from UCT’s unaudited 2013 HEMIS provisional 3rd submission to the DHET. The figure in the final 3rd 2013 HEMIS, due on 31 July 2014, submission may differ. This headcount number excludes the unsubsidised AIM students.
3 This number is also from the 2013 provisional HEMIS 3rd submission.
UNIVERSITY OF CAPE TOWN | Annual Report for the year ended 31 December 2013 Key Objectives for 2013 (Continued) The Senate report on teaching & learning (page 39) deals with completion and success rates in some detail. The Ministerial target success rate 4 for UCT was 84.4% and the actual achieved was 85.57% overall and 87.68% for undergraduates. The Senate’s comprehensive Teaching and Learning Report for 2012 submitted to Council in late 2013 identified very important teaching and learning challenges, declared a greater commitment to the importance of teaching and learning at UCT, and specified a series of interventions to tackle the challenges. Among these are the FYE (or first-year experience) project, which aims to ensure that all first-year students are helped to find their way. One key element of the FYE is an early warning system which alerts faculty to students who may be struggling. A second key element is the series of interventions and foundation programmes that the Senate has put in place to help these students and to bridge the gap that exists between the demands of the undergraduate curriculum and the level of preparedness of many of our students. These foundation programmes are supported by earmarked State subsidy. For 2013 we had 647 first-year students in Ministeriallyapproved foundation programmes (in addition to students in our own foundation programmes) against a target of 590. While we know that we need to extend foundation provision (and in 2014 have done so) what is pleasing is the success rate of foundation students in 2013: overall foundation students achieved success rates of over 80% and in foundation courses the success rate achieved was 85%.
What remains of concern is that the success and throughput rates of Black5 South Africans at UCT lag behind those of other students at UCT 6.
The State’s earmarked teaching development grants (UCT received just under R8 million for this in
2013) funded 17 projects in 2013 continuing into 2014 and are but one of many strategies aimed at dealing with this challenge.
Clinical training The University receives an important earmarked grant to augment state subsidies for clinical training.
For 2013/2014 (the University’s year 2013) this grant was R38.58 million. Of this, R30.5million (or 79% of the grants) was allocated to fund additional clinical staff to support the medical and allied health professions clinical training programmes. The balance was spent on support staff, equipment, and buildings leaving an unspent balance at year end of R1.1 million for which carry over authority has been sought. This earmarked grant is essential if we are to afford to provide the clinical training future health professionals need.
Research and Innovation
The Council and the Senate have a vision for UCT as a research-led institution in the short-term, moving toward the goal of being a research-intensive university in the long-term. The following figures from the comprehensive 2013 Research Report recently adopted by the Senate on the research work of the University show the extent to which research activity continues to grow.
Ratio of degree credits obtained to enrolled FTEs.
In this report I use the terms Black, Coloured Indian and White to refer to the members of the South African population defined in this way See also p.44 for details in the report on operations UNIVERSITY OF CAPE TOWN | Annual Report for the year ended 31 December 2013 This table shows how UCT is becoming increasingly research-led.
What these data do not show is the impact of this work or its quality; a recent independent study 9 shows that UCT remains unrivalled among South African universities in the impact of its research. 10 And perhaps the most marked indications of quality are the number (457) of UCT academic staff who are NRF rated (accepted by their South African and international peers as recognised researchers), the number (35) who are NRF A-rated (those who are recognised as world leaders in their fields) and the number of Y-rated researchers (young researchers) which has grown from 26 in 2008 to 72 in 2013. The 302 post-doctoral students at UCT in 2013 represent a critically important part of UCT’s research endeavour.
An important project that is worthy of mention is work being done to build the next generation of academics. This has been funded by Council appropriations, through donors (principally the Carnegie, Mellon, Ford and Claude Leon Foundations) and most recently by the earmarked State Research Development Grants. This has enabled the University to mount our programme for emerging researchers.
Outreach, social responsibility and engaged scholarship
One of the goals we set in 2009 was to expand and enhance our contribution to South Africa’s development challenges through engaged, policy-relevant research and teaching, as well as by expanding opportunities for students to become directly involved in socially-responsive learning. We also undertook to direct the University’s expertise towards what the Senate terms ‘engaged scholarship’ i.e. scholarship that seeks to engage with, and address, the issues facing our society. The detailed 2012 report illustrating this work came to Council in December 2013 and gave a range of examples of how members of the University are working to apply their scholarship to the benefit of communities.
The final HEMIS audited count was not available at the date of this report, but is expected to exceed this number.
SARChI chairs are funded by the DST through the NRF as part of the South African Research Chairs Initiative Johan Mouton’s A Bibliometric Analysis of the State of Research at UCT UCT’s number of accredited publication units is not the highest of South African universities.
UNIVERSITY OF CAPE TOWN | Annual Report for the year ended 31 December 2013 Financial strength and financial performance The UCT Council continues to give priority attention to financial matters.
Council has a comprehensive financial plan, (published on the UCT website) which foregrounds the following principles.
1. Targeting a recurrent operating surplus amounting to 3% of total recurrent operating income.
2. Capital expenditure is driven by strategy and is constrained by affordability.
3. Debt finance is used conservatively.
4. Net investment income is used only to seed new initiatives and strategic choices.
5. Requiring each of (i) the staff housing and (ii) the student housing operation to cover its full costs and provide resources for long-term maintenance and the expansion of stock. New stock may be underwritten by the capital budget and is evaluated as described above for structural capital items. Unless explicitly agreed by Council, capital and financing costs for additions to student housing or staff housing stock are met by the budget for student or staff housing respectively.
6. Holding free cash at a level between 20% and 30% of recurrent operating expenditure.
How have we fared in 2013?
Council-controlled operations resulted in a small surplus (R40 million) (compared to R134 million in
2012) of the overall operating surplus of R335 million. Recurrent operations, a subset of this – which we target to generate a 3% surplus - generated a deficit of R57 million.
Student housing, while it generated a surplus of R9.4 million, was unable to meet its (internal) debt repayment obligations.
Capital expenditure for 2013 was R244 million, within the limits of the budget and affordability.
For the 4th consecutive year free cash reserves are within the guidelines in our financial policy.
What does this mean?