PARTY

UKZN has an accumulated deficit of R1,9bn - Belinda Bozzoli

DA MP says debt appears to have been run up in the course of a single year

UKZN owes nearly R2bn to its debtors after massive 12 month spending spree 

08 December 2014

In a reply to a DA parliamentary question, the Minister of Higher Education and Training, Dr Blade Nzimande, revealed that at the end of the 2012/13 financial year, the University of KwaZulu-Natal, had an accumulated deficit of almost R2 billion. The 2011-12 audit revealed no such deficit. 

The debt was, it seems run up in the course of one year on the watch of the then Vice-Chancellor Professor Malegapuru Makgoba, and under the authority of the University's Council, chaired by Mrs Phumla Mnganga. 

The DA will write to Minister Nzimande to ask that he suggest to the University Council that a forensic audit be undertaken to get to the bottom of this situation. How this came to be and who will be ultimately held responsible must be addressed as a matter of urgency. 

I will also ask Minister Nzimande the following questions: 

How will this debt be paid?

Will the DHET bail UKZN out, and if so, from which budget will the funds be taken?

What has been done since the end of 2013, to ensure that proper internal financial control is exercised? 

Once one of South Africa's premier Universities, it is tragic that this institution has been brought to its knees through mismanagement and wasteful spending. 

Minister Nzimande needs to do everything he possibly can to help the incoming Vice-Chancellor, Professor Albert van Jaarsveld, turn this situation around. It is our hope that the financial standing of the University will not affect the intake of first year students in 2015 and further damage the quality of education at UKZN over the long run.

Extract from parliamentary reply:

Area of audit: UKZN Consolidated Financial Statements

Opinion/Findings of the Auditors 2011/2012

Audit Opinion: Unqualified.

B  Report on other legal and regulatory requirements:

B.1 Predetermined Objectives - No material findings regarding the Report of the Vice-Chancellor (VC) concerning the reliability of the information.

B.2 Compliance with laws and regulations - Auditors did not identify instances of material non-compliance with specific matters in key applicable laws and regulations as set out in the General notice issues in terms of the Public Audit Act of South Africa.

Opinion/Findings of the Auditors 2012/2013

Audit Opinion: Unqualified.

A.1 Emphasis of matter

GOING CONCERN

Without qualifying the external auditor's opinion, attention is drawn to the Report of the Chief Finance Officer as set out in the annual report which indicates that the University incurred a net deficit on Council controlled unrestricted funds of R28 506 000 for the year ended    31 December 2013 and, as at that date, the University's Council controlled operating funds presented in the consolidated statement of funds and reserves has an accumulated deficit of R1 874 833 000.

B  Report on other legal and regulatory requirements

B.1 Predetermined Objectives - No material findings regarding the Report of the VC concerning the reliability of the information.

B.2  Compliance with laws and regulations

Internal Controls: The following internal control deficiencies were identified:

Inconsistent process and framework followed to ensure that there are contracts in place for all material transactions;

Lack of certain information technology system reports that would assist in the prevention of and detection of misstatements;

The level of accounting standards related to revenue recognition principles; and

Regular and accurate performance of basic control procedure such as monthly reconciliations.

Statement issued by Prof Belinda Bozzoli MP, DA Shadow Minister of Higher Education, December 8 2014

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