BUDGET GUIDELINES 2022 - Finance - UCT Staff
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Finance
BUDGET GUIDELINES
2022
Budget Guidelines 2022
Table of Contents
1 Planning and Budgeting context and approach.................................................................................................................... 2
2 Year on year budget change/reconciliation ......................................................................................................................... 4
2.1 Revenue/Cost Type Groups ....................................................................................................................................... 4
2.2 Volume or Price Change ............................................................................................................................................ 4
2.3 Categorisations ......................................................................................................................................................... 4
2.4 Priority Ranking ........................................................................................................................................................ 5
2.5 New Items or Activities ............................................................................................................................................. 5
2.6 Unit Budget Recon .................................................................................................................................................... 5
2.7 Unit Budget Recon Submission .................................................................................................................................. 6
3 Tuition Fee Income (captured on Real Internal Orders (RIOs)) ............................................................................................. 6
4 Member/Employee Remuneration (Salary planning) ........................................................................................................... 7
5 Course Expenditure ............................................................................................................................................................ 9
6 Software ............................................................................................................................................................................ 9
7 IT Replacement .................................................................................................................................................................. 9
8 Copyright costs .................................................................................................................................................................10
8.1 Full time courses ......................................................................................................................................................10
8.2 Transactional copyright charges ...............................................................................................................................10
8.3 Short courses ...........................................................................................................................................................10
9 Travel ...............................................................................................................................................................................11
10 Process for ICTS SLA charge-outs...................................................................................................................................11
11 Depreciation.................................................................................................................................................................11
12 IDU Budget Types (CE planning types) ...........................................................................................................................12
13 Export and Import of plans ...........................................................................................................................................13
14 Items not to be planned by units...................................................................................................................................13
15 Items not planned for by units (planned by Central Finance once data is available) ........................................................13
16 Matching Plans .............................................................................................................................................................14
17 Capital requests (CAPEX)...............................................................................................................................................14
17.1 Assets excluding IT equipment .................................................................................................................................14
17.2 Major infrastructure projects (space related) ............................................................................................................15
17.3 ITIPC Projects ...........................................................................................................................................................15
18 Non-continuing activities (including Prior Year Reserves utilisation) ...............................................................................15
19 Checklist.......................................................................................................................................................................16
20 Key dates/Timeline .......................................................................................................................................................17
21 Conventions for IDU Planning .......................................................................................................................................17
22 Contacts for IDU Planning .............................................................................................................................................18
23 Attachment 1 ...............................................................................................................................................................18
July 2021 1
Budget Guidelines 2022
1 Planning and Budgeting context and approach
In striving for financial sustainability, UCT targets a 3% Surplus on recurrent revenue and attempts to
maintain between 20% and 30% of Operational Costs as Free Cash Reserves. With the advent of the
COVID-19 pandemic and South Africa’s lockdown response thereto, UCT’s targeted 2020 surplus was
eradicated, and cash reserves utilised to fund costs in the face of revenue losses. Despite the enormous
pressures of the lockdown, UCT completed the 2020 academic year and ensured the job security of
staff.
Focussing on longer term financial sustainability, the planning and budgeting strategy adopted was to
construct the 2021 financial year with a ‘Crisis Budget’, and plan the 2022 and 2023 financial years with
‘Recovery Budgets’. Vision 2030 and its related Strategic Plan, despite being disrupted as a result of
the current pandemic, would continue to receive focus and attention, with future budgets and
resource allocations being aligned to this new strategy as appropriate.
In June 2020, the University Council approved a set of overarching principles that steered and guided
the formulation of the 2021 Crisis Budget. As part of the process of rolling out these principles, the
Executive considered and approved specific targets for each individual unit/budget centre, considering
specific nuances in relation to non-controllable costs.
The Resource Allocation Advisory Group (RAAG), chaired by the Vice-Chancellor, has continued to meet
regularly to consider strategies and interventions that would be required to secure financial
sustainability for the university, not only in the short-term, but also over the medium-to-long term. On
1 June 2021, RAAG approved a set of guiding principles that are to be adopted in the formulation of
the 2022 Recovery Budget. Coupled with this, specific targets for each individual unit/budget centre,
considering specific nuances in relation to non-controllable costs, were once again considered and
approved (appended as Attachment 1). Budget submissions from Faculties and PASS departments, as
well as Student Housing, need to align with these targets.
Key assumptions and sensitivities incorporated into the 2022 Recovery Budget scenario that informed
the principles and parameters are as follows:
1. Achieving a surplus of at least 1% of recurrent operating income (part recovery towards the 3%
finance policy target);
2. An inflation rate of 4.5%;
3. State Subsidy has been modelled to reflect a 2.5% increase on the 2021 budget (3.9% increase
on 2021 forecast). The DHET advised universities in late May 2021 that they would be
repurposing approximately 1.4% of block grant funding as well as parts of earmarked funding
towards funding shortfalls in relation to NSFAS. The impact on block grant funding for UCT was
a reduction of R24m compared to that originally communicated in January 2021.
Communication from the DHET indicates that this will continue for the next two funding cycles.
Given the uncertainties in relation to the above, as well as other potential shifts in funding at a
national level, the risk posed by this variable in achieving our desired bottom-line is significant.
Every 1% shift has an impact of R18m. We expect to receive confirmation of our 2022 funding
allocation in December 2021;
4. In relation to Fee Income, at a consolidated level a 1% volume increase on the 2021 budget has
been modelled together with a 4.5% rate increase (net increase of 4.9% on 2021 forecast). Once
faculties submit their detailed course plans for 2022, we will have a better sense of the volume
accuracy of this assumption. At a consolidated level, every 1% shift in fee income (in either
volume, rate or combined) has an impact of R17m;
5. Other sources of income (from Grants, Donations, Commercial activities, cost recoveries, etc.)
have for the most part been modelled to increase at inflation of 4.5%, except for income from
commercial/hospitality activities (Breakwater Lodge, Protea Hotel Mowbray, Academic
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Budget Guidelines 2022
Conference Centre @ GSB) and Executive Education activities, where far greater levels of
recovery are expected after the decimation experienced in 2020 and early 2021. Insofar as the
hospitality activities are concerned, we have modelled a 35% increase in annual income
compared to the 2021 budget, and for Executive Education a 20% increase. If indications at a
later stage suggest differently, these will be accommodated together with changes in
concomitant costs. Every 1% shift (across all these income sources) has an impact of circa
R5.2m;
6. Staffing costs have been modelled to increase by 3.5% on the 2021 budgeted rand value.
However, it is important to note that the 2021 budget only included a 2% rate increase whereas
wage increases were settled at 3.8%. Furthermore, certain units did not plan all their 2021
vacant posts at a full-time equivalent (FTE), and this will need to be adjusted for in the 2022
budget with an overall impact of 0.3% of total staffing costs. The impact of the above is an
adjusted year-on-year increase of only 1.4%, which will need to be achieved through a
combination of rate and volume adjustments and would be dependent on the outcome of
future negotiations with the trade unions. Every 1% shift on this cost line has an impact of
R26m;
7. Controllable Administration and Operating costs, including Travel, needs to be considered
within the context of the developing “new normal”. Expectations are that costs such as Course
Materials, Catering & Functions, Computer Consumables, Printing & Photocopying, Stationery
and Minor Assets would reduce significantly (in alignment with what 2021 forecasts are
reflecting), whereas additional costs are expected in relation to Computer Equipment as well as
remote connectivity. Units will have the flexibility to nuance the impact between cost line items
to achieve the overall required parameter for their area;
8. Library Acquisition costs, institution-wide Software Licencing costs (which are both impacted
by foreign exchange rate fluctuations), Audit Fees, Insurance, Utilities costs and compliance
related costs due to COVID-19, have been considered separately and accommodated within the
unit-specific parameters;
9. The demand for Financial Aid at both undergraduate and postgraduate level is expected to
increase. However, the proportional change in students being fully funded by NSFAS
(increasing) versus those being funded by UCT (reducing as they exit the system) should result
in a reduced overall undergraduate financial aid underwriting cost. The sustainability of the
current “fee-free higher education model” funded by NSFAS remains high on the risk radar;
10. Bad Debt is likely to increase as a result of the economic climate impact on fee payers, thus the
Provision for Bad Debt will be increased accordingly;
11. Depreciation needs to take account of changes in the asset base, and will be increased
accordingly (approximately 6%); and
12. CAPEX and Strategic spend would continue to be assessed within the context of ‘free cash’
availability and prioritised in support of Vision 2030.
Given the sensitivities referred to above, the Executive/RAAG reserves the right to revisit and amend
any of the proposed parameters if it becomes apparent that the desired outcomes would not be
achieved and/or our financial sustainability becomes compromised.
As in previous budget cycles, funding for new or expanded activities would need to come from either
the exclusion of other budget items in the current budget base, or from new revenue sources, which
would need to be clearly articulated in the budget submission.
An executive narrative of no more than two pages must accompany the budget submission addressing
key risks and opportunities in relation to the unit’s activities/operations, be it in the short, medium
and/or long-term.
Likened to the budget process for 2019, RAAG will consider motivations for new costs that are not in
the current budget base, but which are activities that would support the achievement of Vision 2030.
These new net costs (together with any related revenues) must NOT be included in the budget
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captured in the IDU system but need to be submitted as a separate “above-parameter motivation”
that clearly articulates and demonstrates alignment to Vision 2030. If approved by RAAG, this will be
communicated back to the Unit Head and Area Finance Manager, at which time it can be captured into
the subsequent budget iteration on IDU.
With regards to the Student Housing budget, RAAG expects a bottom-line break-even scenario at
worst. The budget submission must include details underpinning all the major cost line items, including
their relationship to revenue items, in order for RAAG to gain a sufficient understanding of the overall
budget proposition and to make informed decisions and choices where necessary.
It is recognised and acknowledged that planning to operate within the context of a ‘Recovery Budget’
will be a challenge. The continuing nature of these unprecedented times require everyone to work
together to protect and secure the future of both the institution and all its stakeholders. A prudent
approach to the 2022 budget will be required, balancing the need to allocate adequate resources
during this short-term period and to enable recovery post the current crisis, leading to the
development of a new strategic framework, ensuring continuity and mitigation of key risks, and at the
same time ensuring that we remain financially sustainable.
2 Year on year budget change/reconciliation
An automated Budget Unit Report (labelled “D-05 Unit Budget Recon”), with guidelines/examples, is
available as a direct download from IDU Concept. You are required to report changes to your 2021
budget base and new items/activities using the format provided in the template. Funding for new or
expanded activities will need to come from an exclusion of other budget item(s) in the budget base or
be motivated via a business plan (details below). The Budget recon template provides a framework for
all budget centres to detail the allocation of resources.
2.1 Revenue/Cost Type Groups
Columns have been provided for items to be split into revenue/cost type groups (New/Volume/Price
change), as applicable:
New = Items relating to new activities.
Volume = Additional or decreased revenue/costs relating to change in volume.
Price change = Additional or decreased revenue/costs due to price changes.
Some examples are provided in the Budget change/reconciliation workbook.
2.2 Volume or Price Change
For items relating to a Volume or Price change, either provide the motivation for this in the Budget
change / Description column or, if the motivation requires lengthier detail, provide a separate
motivation document of no more than 1 page. When preparing the motivation, bear in mind cost
drivers. For ease of reference, a standard format for labelling Motivations has been set. This can be
found on the 'Unit Budget recon' template. See sheet 'Legend examples & notes' and refer to sheet
'Unit names'.
2.3 Categorisations
The following categories are provided for revenue or cost change categorisations: Choice, Additional
revenue, Matched revenue, Unavoidable, Improvement. For each item, a category must be provided,
using the category method explained in the template legend. The Budget recon should detail staffing
by post and other costs by Cost Element group as listed in the ‘Unit Budget Recon’ download (1st
worksheet). Where new spend items or activities are matched by income, also detail the income and
show the linkage by labelling MR1, MR2 etc. (Refer to the template explanation).
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2.4 Priority Ranking
For this Recovery Budget cycle, within the context of the defined parameters, the priority ranking is
unlikely to be appropriate as generally this is used when new resource allocation is required. Any
deviation to the set parameters, where relevant, will require ranking. A priority ranking must be
provided for each item, using the ranking method explained in the template legend. Please note: Your
ranking must be absolute (i.e., one number 1 ranking, one number 2 ranking, etc).
2.5 New Items or Activities
Within the context of a Recovery Budget, it is unlikely for submissions to include new items or new
activities, unless these are funded from within the adjusted existing budget base (incorporating the
overall required recovery budget parameters) or from new revenue sources. However, as
mentioned in section 1 RAAG will consider motivations for new costs that are not in the current
budget base but are activities that would support the achievement of Vision 2030 and an “above-
parameter motivation” is required. A business plan is required for new items or activities, which
supports/motivates the case(s) and should clearly demonstrate any benefits such as anticipated new
revenues, enhanced/maintained service levels, etc. Where new spend items/activities are matched
by income, please also detail the income and show the linkage, as explained above. A guideline for
business plans and a related budget template is provided on the UCT Finance website. The business
plan must be no more than 3 pages, including the budget summary. For ease of reference, a standard
format for labelling business plans has been set. This can be found on the ‘Unit Budget Recon’
template. Refer to the sheet 'Legend examples & notes' and refer to sheet 'Unit names'.
The Executive and/or the Business Plan Review Team does not replace any existing structures or
committees that are responsible for, amongst others, Academic Planning or Quality Assurance, Space
Allocation, IT Investment and Prioritisation Committee, etc. All business plans submitted to the
Executive and/or business plan review team must already have followed the appropriate and
applicable management and governance processes for consideration and approval in principle.
Evidence of support from the parent committee must be provided (e.g., meeting minutes), together
with the Business plan.
It is important to report Motivations and Business Plans correctly and understand the difference
between a Motivation (2.2) and a Business plan (2.5).
o A motivation is a brief supporting explanation for budget changes to the current budget, relating
primarily to volume or price changes or new items/costs that do not generate revenues. In
addition, the motivation needs to (i) provide information on the gain to UCT/deemed value-add
(other than economic value-add) (ii) advise of possible trade-offs for the item – if RAAG cannot
fund, what the unit would give up or not do to be able to fund the proposal.
o A business plan is a document which sets out a plan for a new activity or project (includes goal of
the new activity or project and the operational and financial plan). Refer Business plan process
document and guidelines on the UCT Finance website.
2.6 Unit Budget Recon
The ‘Unit Budget Recon’ with categorisation, motivations, business plans, and the plan loaded in IDU,
will be reviewed and considered within the relevant Budget process structures i.e., PBWG and/or
RAAG.
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2.7 Unit Budget Recon Submission
The ‘Unit Budget Recon’ and supporting schedules * must be submitted to Tony Dollery by 08:30 on
Monday, 30th August 2021. [* Executive Narrative, Motivations, Business plans, Above-parameter
motivations, IT replacement schedule, Software and CAPEX.].
PLEASE NOTE: Details pertaining to Travel, is required to be captured in IDU, and will be extracted
directly from the system.
3 Tuition Fee Income (captured on Real Internal Orders (RIOs))
The course fees budgeting functionality in the IDU Revenue Module will be used by the Faculty
Managers (Academic Admin) to capture student head counts as well as course fees for new courses (if
missing) and those courses where the base fee has changed.
A motivation document (in MS Word format) is required for all revised fees resulting in base fee
changes. If the total cost of a programme remains unchanged, then changes in course fees do not
have to be flagged to University Finance Committee (UFC) and Council (see example below).
However, if they do change the total qualification/programme fee, the details and motivation will need
to be presented to UFC and Council. This document must include the following:
o Course code
o Course description
o Current 2021 fee
o Proposed revised fee at 2021 rates
o Base fee change
o Comments/Reason/Motivation
The motivations must be consolidated per Faculty and uploaded as a Supporting Document in the
Revenue Module in IDU (see screenshot below). This will be appended to the fees list presented to
UFC and Council.
In summary, only course fees that change over and above the standard inflation increase for a year,
should be flagged for UFC and Council. If the total cost of a programme remains unchanged, then
changes in course fees do not have to be flagged.
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o When a course is split into two smaller courses with lower fees, the total cost of the
programme remains the same. No motivation required.
o If credit values of a course change significantly, where fees must be adjusted and consequently,
the total fees for the programme change, then these changes must be motivated and
presented to UFC and Council.
It is expected that the UFC will consider the 2022 general fee increase at their scheduled November
2021 meeting, and recommend these to Council at the December 2021 meeting. The 2022 Budget and
related proposals will also serve at the December 2021 meeting.
Process:
o Faculty Managers (Academic Admin) complete the course fee budgeting in IDU
o Finance Managers to check the data for reasonability and completeness
Course fees budgeting in the IDU Revenue Module must reconcile to the IDU fee revenue line (CE 300).
A difference could be the time delay of a course captured on PeopleSoft and the master data of the
RIO not captured on SAP CO yet. Finance Managers to contact the Finance Helpdesk (fnd-
finance@uct.ac.za) for assistance.
It is the responsibility of both Faculty Managers (Academic Admin) and Finance Managers to ensure
that the data input in IDU is correct and complete.
To assist with Course Fee Planning, the following is available on the Finance website – Budget
Guidelines:
o IDU Planning Guidelines for the Faculty Managers (Academic Admin)
o A checklist for Faculty Managers (Academic Admin) and Finance Managers to sign off
o Fee Planning Notes
The PeopleSoft report, on which the IDU headcount data (5-year history) is based, excludes students
that dropped courses. A report that includes students that have dropped courses is available for Faculty
Managers (Academic Admin) to run in Peoplesoft. Any Finance Manager requiring this, can obtain the
report from the Faculty Manager (Academic Admin).
4 Member/Employee Remuneration (Salary planning)
Staff plans have been loaded in IDU based on June 2021 Cost of Employment (COEs) PLUS the add-ons
for Cost to Company (CTC). [June 2021 COE + add-on costs = CTC = CTC on IDU]. Staff that are due to
retire by the end of 2021 have not been uploaded. A list of these staff will be forwarded to the Finance
Managers to manage the planning for the resulting vacancies.
It is assumed that staffing/payroll data is being checked by Finance Managers on a monthly basis for
management accounting and reporting purposes, and that any changes are forwarded by Finance
Managers to HR to make corrections. Changes to member cost centers, arising after the June 2021
payroll, will not be made in IDU and planners must plan for a vacant post in the correct cost center.
Planners can make use of the Info button to input a comment of the change or load a Supporting
Document.
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The existing staff member on the incorrect Cost center will need to be retired/resigned.
Detailed notes:
o The payroll for Permanent and Fixed term staff has been loaded for Continuing and Non-
Continuing activities. Users will then need to change the status of existing employees (e.g.,
retired) as well as add new vacancies.
o Staffing plans (CTCs) will be re-valued with salary increases (%) by Central Finance post the
initial plan submission.
o The % Category Increase is a global increase for the different payclasses. The Base %
increase is to be used to plan scarcity premiums on specific disciplines. This is only to be
used on Vacant Posts as the scarcity premium on Actual posts will already have the scarcity
premium built in the COE (in the system). Only plan this if you need to include a scarcity
premium because it is a known scarcity premium on a specific discipline.
▪ The Base % is also to be used for planning part time posts or for partially allocated
employees e.g., if a 50% part time position, then enter a base adjustment of 50.
o The use of the IDU functionality for Base % increase for vacant posts (with a known
scarcity premium and planning part time posts or for partially allocated employees)
is only available to Finance Managers.
o The Base values of vacant posts must not be changed.
o It is important to use the correct payclass/level of the vacant post.
o Vacancies are set as per standard package.
o Each vacant post must be captured individually by payclass/level of the vacant post, and
not consolidated into bulk/group capture. This is critical for data analytics and analysis.
o TUTORS/ASSISTANTS or similar (refer table 1 below): Capture plan on (Cost Element) CE
1700.
o ALLOWANCES (refer table 1 below): Capture plans on CEs 1040, 1410, 1420, 1440 and/or
1560.
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Table 1 – CEs for Tutors/Assistants and Allowances
Cost
element Cost element description
1700 FEES/SALARY - AD HOC STF
1040 NON PENS ALLOWANCE - JMS FOR HSCI ONLY
1410 ACTING ALLOWANCE - PERM STF
1420 DEANS ALLOWANCE
1440 HOD ALLOWANCE - PERM STF
1560 WARDENS ALLOWANCE FOR SH&RL ONLY
5 Course Expenditure
Course expenditure can be planned on RIOs.
Alternatively, if you do not report on course expenditure in detail, i.e., by course, then planning for
these expenses can be added to the Management and Support Cost center, to which the course
revenue settles. This route is NOT recommended as it results in a problem with quarterly reporting
where the actual may not follow the plan, particularly in the case of the cost of printing/photocopying,
where the plan is part of admin and operating costs, whereas the actual is part of course costs.
6 Software
Please provide itemised detail of all software for which you are budgeting and which is part of your
budget base (CE 2150). A template for ‘Software usage/acquisition’ is available on the UCT Finance
website for this purpose. There is a concern that different departments buy their software
independently (e.g., statistics packages) when an institutional license would be cheaper overall, or in
some cases has already been acquired. Therefore, in order to enable ICTS to consolidate the software
licenses across UCT, please provide the details of all intended software acquisitions and deployments.
This spreadsheet must be uploaded as a supporting document against CE 2150 and e-mailed to Kira
Chernotsky (cc’ed to Tony Dollery) by 08h30 30th August 2021. Any queries should be directed to Kira.
The software template that has been used thus far is to be completed. Due to the variability on this
item an IDU activity build is not possible at this stage but may be explored further.
7 IT Replacement
Replacement of operating assets (whether below or above the capitalisation threshold of R28,750 (incl.
VAT), which are part of a multi-year replacement cycle (e.g., replacement of Lab PCs, Staff PCs,
Notebooks, Servers, etc) must not be budgeted as CAPEX, but as an operating cost provision.
Where computers are replaced every 5 years, and 1/5 is provided annually, this provision for
replacement would be planned on CE 4320 in period January (Computer/IT Equipment < and >R28,750
(incl. VAT)). The actual journal must follow the plan as a debit (to a continuing Cost center) and credit
(to a non-continuing Cost center) on the same CE 4320. The debit and credit will nett off from a UCT
perspective. When the computers are actually purchased in year 5, CE 4320 will be debited with the
cost of the computers on the non-continuing Cost center (either as an operating cost or as depreciation
where items have been capitalised).
Computer/IT equipment must not be planned as CAPEX but via the IT replacement cycle provision.
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Following the detailed review of IT spend done by ICTS on behalf of the Special Budget Task Team, it
was agreed that the minimum replacement cycle for PCs/Laptops be 5 years. Replacement after a
period less than 5 years is an exception rather than the rule. Please refer to ICT001- Replacement cycle
of end-user ICT equipment policy.
Please note that this section of the budget is a requirement for both PASS and Faculties. If you need
assistance, please contact Tony Dollery.
A guideline for this computation is available on the Finance website. Basic information required on the
spreadsheet: By location, number of machines, replacement cycle.
Due to the use of the IT replacement schedules by operational departments/IT managers, as well as
the variability on this item, an IDU activity build is not possible. The completed template must be
uploaded as a Supporting Document against CE 4320.
Please also submit an electronic copy of your detailed PC replacement spreadsheet and computation
to Tony Dollery by 08h30 on 30th August 2021.
8 Copyright costs
8.1 Full time courses
Copying that falls within the terms of the blanket licence (single articles, single poems or short stories,
single book chapters, single law statutes and less than 10% of a single book) will not incur copyright
charges to faculties since these costs are met in terms of UCT's blanket licence with DALRO, with the
fee paid via the Registrar's Office (an amount per full time equivalent student).
8.2 Transactional copyright charges
Transactional copyright charges (all charges outside the terms of the blanket licence) are for the
account of the faculty, with appropriate advance planning. These costs may not be charged directly
to students since this would be contrary to UCT’s inclusive course fee policy. Such individual course
fees must remain comparable to similar course offerings and may not be varied on the basis of course
notes provided.
8.3 Short courses
All short courses are covered in the same way as 8.1 and 8.2 above. For the DALRO blanket licence,
the enrolments in PeopleSoft are the basis. The cost billed by DALRO is 20% of the FTE. The cost is
covered centrally by the Registrar’s Office, but then recovered from the faculties on a prorated basis.
Material not covered by the blanket licence requires a transactional licence application.
Should you have any queries or doubts in this regard, please contact Karen van Heerden to discuss
such.
Summary: The University-wide budget resides in the Registrar's Office for the blanket and short course
fees. The transactional costs must come from the unit’s own budget and should be planned for by the
units as such.
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9 Travel
Itemised detail of all travel costs is to be included in the Activity capture within IDU. In order to enable
RAAG to review the total UCT travel budget, please provide the details of all intended travel plans.
It is advisable for the following detail to be captured in the Description input field in IDU:
o Brief purpose of trip e.g., Conference
o Date of travel (if applicable) e.g., Mar2022
The Comment input field in IDU must be used to input the following:
o Brief purpose of trip e.g., Conference
o Destination
o Date of travel (if applicable) e.g., Mar2022
o Traveller’s names/position
o Purpose
10 Process for ICTS SLA charge-outs
Areas affected are currently EBE, HSCI, LAW, SCI and SH&RL.
ICTS and the areas above should plan for the SLA charge-out including an all-inclusive escalation rate
of the SLA. The ICTS Finance Manager and Area Finance Managers (EBE, HSCI, LAW, SCI and SH&RL)
will agree the SLA amounts up-front and plan accordingly.
To summarise:
• ICTS sends out SLA quotes including the all-inclusive escalation rate of the SLA agreed with the area
Finance Managers.
• Areas plan the SLA charge-outs (using the quote from ICTS) as operating costs on CE 4110, as this is
an internal operating charge-out cost for the areas.
• ICTS plan a similar negative amount under Income as an Internal Recovery on CE 560.
Any queries must be directed to Khalid Chogle.
11 Depreciation
Depreciation must be included in your plans. This item forms part of the budget (operating expenses).
Depreciation for existing assets is imported directly into IDU by the IDU administrators.
IMPORTANT: First refer to section 17 with regards to CAPEX requests.
Refer to the following guideline regarding input in the IDU system for RAAG approved CAPEX requests:
New CAPEX requests must be captured in the Depreciation Activity. It is important to capture the new
asset within the correct Asset Class as the classes are linked to ‘useful lives’ that determine the
depreciation calculation.
Disposal of Assets must be planned in the IDU system. The following detail (as per SAP Assets Module)
must be included:
o asset number
o description
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o purchase date
o purchase value
In addition to the above, the following is also required for input:
o month of disposal
o expected disposal value (to be captured as a positive amount)
The Profit or Loss on Sale/Disposal of Assets account (CE 4130) will be calculated in the background
once the above details are captured.
The effect of the depreciation of the disposed asset will appear in the Acquired Asset line and not the
Existing Asset line in IDU
12 IDU Budget Types (CE planning types)
A Budget Type determines how a value is captured in IDU.
The Budget types setup in IDU are as follows:
S – Standard (simple one line capture)
K – Itemised (add multiple lines for capture)
D – Depreciation/Capex (automatically calculates depreciation based on asset lives)
E – Activity (calculations with global assumption, inputs and formulae)
M – Member/Employee Remuneration (Salary planning)
P – Percentage Reallocation (the target result of a percentage reallocated from a source)
F – Fixed (read only accounts- users will not be able to plan on these CEs
T – Revenue/Fees Budgeting (separate Revenue module for Tuition Fees)
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13 Export and Import of plans
IDU offers the functionality of exporting and importing to and from Excel.
Export
Import
For the current planning cycle, we recommend that if you are going to use this functionality, do so for
Standard budgeting and possibly Itemised budgeting. It is not recommended for Activity planning and
Member planning.
14 Items not to be planned by units
o Discretionary bonuses – covered by staff churn (Budget type is F (Fixed) – thus read only)
o Leave pay-outs – covered by staff churn (Budget type is F (Fixed) – thus read only)
o Ad-hominem promotions – covered by staff churn (Budget type is F (Fixed) – thus read only)
o PASS promotions – covered by staff churn
15 Items not planned for by units (planned by Central Finance once
data is available)
The following are set up as Fixed and Percentage budget types and cannot be planned by users.
o Subsidy (Budget type is F (Fixed) – thus read only))
o Charges – Subsidy charges, Fee charges, Space charges, Research charges (Budget type is P
(Percentage) – thus calculated)
o Staff Churn (Budget type is P (Percentage) – thus calculated)
July 2021 13Budget Guidelines 2022
16 Matching Plans
Areas where plans are required to reconcile/match with other areas, must ensure they communicate
plans (annual and calendarized) and that a matching verification/reconciliation is done. Planning items
subject to this requirement include for example:
o Internal recoveries (Student Housing & Residence Life and Central University-Wide)
o Baxter Grant and Concert Hall rental (Baxter and Faculty of Humanities)
o Plans based on plan data provided from another area (e.g., IAPO and faculties)
o Internal ICTS SLA agreements as referred to above
17 Capital requests (CAPEX)
At its meeting in June 2020, Council approved a set of parameters that informed the 2021 Operating
Budgets, as well as shape the CAPEX allocations available for the 2020 and 2021 years. As part of the
2021 Crisis Budget principles, Council suggested a targeted reduction in capital and strategic
expenditure over the two years 2020 to 2021. The key principle adopted for 2021 was to limit
allocations as much as possible without compromising the academic project, to preserve cash during
this time of financial recovery. Detailed considerations and consultations took place, particularly within
the context of preserving free cash considering the impact of COVID-19, the need to invest in core
infrastructure and strategic initiatives, whilst ensuring that we honoured existing commitments. CAPEX
budget allocations to units were largely put on hold for 2021, with units having advance notice of the
intent to limit new allocations in 2021, and thus needing to reprioritise their 2020 allocations to cover
both years for key needs.
CAPEX and Strategic & One-Off CAPEX spend will continue to be assessed within the context of free
cash availability and prioritised in support of Vision 2030. RAAG will consider motivations for 2022
CAPEX and Strategic & One-Off CAPEX allocations. However, as is the case with the Operating Budget
principle, a prudent approach to the 2022 CAPEX budget will be required. Units will need to provide
details and motivations for critical/key 2022 CAPEX, Strategic & One-Off CAPEX needs. With this being
a Recovery Budget, the new CAPEX items must not be included in the budget captured in the IDU
system but needs to be detailed in the CAPEX template available on the Finance website, as well as the
additional depreciation, together with the CAPEX details and motivation. If approved by RAAG, this will
be communicated back to the Unit Head and Area Finance Manager, at which time it can be captured
into a subsequent budget iteration on IDU.
Capital items have a unit cost of greater than R28,750 (incl. VAT).
17.1 Assets excluding IT equipment
(Only if CAPEX approved by RAAG) - New CAPEX items must be planned for in IDU (on the relevant
depreciation CE), which would result in the additional depreciation being calculated automatically.
To assist with the consolidation of the request, the CAPEX template available on the Finance website
must be completed and uploaded as a Supporting Document in IDU. All other relevant documents
which would support the CAPEX ask, for example quotes and detailed motivations, must be uploaded
in IDU as well.
July 2021 14Budget Guidelines 2022
17.2 Major infrastructure projects (space related)
Proposals with justifications and motivations go via the Space Allocation Committee (SAC) and the
University Building & Development Committee (UB&DC), which are then considered in competition
with other proposals.
Areas must ensure that NO double counting occurs between themselves and Properties & Services.
Finance Managers must liaise with Nigel Haupt or Carin Brown (at Properties & Services [P&S]) before
submitting plans.
Planned maintenance (part of P&S Operational plans ONLY). This is submitted via P&S as part of
their planned maintenance and routine support provisions in their university-wide budget and will
be considered as part of that plan.
17.3 Information Technology Investment and Prioritisation Committee (ITIPC)
Projects
For new activities or projects with a significant ICT (Information and Communication Technology)
component, and for which capital funding is required or UCT funds expended, the ITIPC Excel
spreadsheet must be downloaded and completed with all the required information. The completed
spreadsheet, together with any supporting documentation, must then be attached to the ITIPC
Request before final submission.
The ITIPC Excel spreadsheet is available on the ITIPC Request within Service Now.
For assistance or queries relating to the ITIPC Excel spreadsheet or submission of your request,
please log an ITIPC Assistance Request.
The ITIPC must consider the project request before finalisation of the budget submission.
ITIPC Project Definition: “We consider a project to be any body of work that is temporary and has
any combination of the following:
o Requires 80+ hours of ICT resource time
o Requires coordination of 3+ departments
o Requires coordination of 3+ ICT resources
o Has costs of R100,000+”
If there is any doubt on the route for approval of an IT project, this query should be raised with
Trevor Joubert or Kimi Keith.
18 Non-continuing activities (including Prior Year Reserves
utilisation)
All plans for non-continuing activities must be captured by Cost element in IDU, either by individual
Cost center/RIO or on a higher-level Cost center. Note: All access to PYR is required to be motivated to
the ED: Finance as previously communicated.
The submission date for plans on non-continuing activities in IDU Plan 2022 (Version 2) is 17:00 on
Monday, 13th September 2021. Finance Managers not able to meet this deadline due to specific
reasons in their units, need to contact Tony Dollery.
July 2021 15Budget Guidelines 2022 19 Checklist Please complete the budget submission Checklist. This is available on the Finance website with other budget 2022 downloads. This Checklist forms part of your budget submission and must accompany your submission to Tony Dollery on 30th August 2021. Please use the checklist prior to submission to confirm all required schedules and documents are complete, uploaded to IDU or submitted. All submissions without completed Checklists will be returned as incomplete. July 2021 16
Budget Guidelines 2022
20 Key dates/Timeline
Revised Process for 2022 Proposals
The Executive has agreed the following process for the 2022 budget submissions and proposals.
KEY DATES FOR THE BUDGET 2022 CYCLE
Meeting/Event/Item Date Time Purpose/Information
Faculty Managers: Academic Admin to initiate the new course
New course approvals January / February 2021
approval process in the faculties
Faculty Managers: Academic Admin to submit forms of Dean's
Circular (DC) approved new courses to Deputy Manager:
Course Approval forms Friday, 21 May 2021
Academic Data & Structure / Academic Administration Records
Office
All DC approved submissions (Course Approval Forms) to be
Course Approval Forms on PeopleSoft Friday, 18 June 2021
captured on PeopleSoft system by Records Office
Refresher course for IDU planners. Users would have to attend
Training - Refresher Monday, 28 June to Thursday, 01 July 2021 09h00 to 12h00
one of these days.
Training - Faculty Managers: Academic Admin Friday, 02 July 2021 10h00 to 12h30 Refresher course for Faculty Managers: Academic Admin
Training - New planners Monday, 05 & Tuesday, 06 July 2021 09h00 to 13h00 New planners (compulsory)
Open for 2022 IDU Planning Version 1
IDU Budget module open for operating budgeting
Monday, 05 July 2021 08h30
IDU open for 2022 Course fee budgeting by Faculty Managers:
IDU Revenue module open for Course fee budgeting
Academic Admin (Headcounts and Fees)
Guidelines available Budget guidelines available
Monday, 05 July 2021 08h30
Fee notes available Fee notes available
Completed Course fee budgeting and submissions by Faculty
Course fee budgeting complete on IDU and
Monday, 02 August 2021 08h30 Managers: Academic Admin on IDU for Finance Managers to
submissions complete
proceed.
Faculty & PASS dept. plans completed in IDU (including fee plans)
Budget submissions due Monday, 30 August 2021 08h30
& budget submissions (schedules)
Faculty & PASS dept. non-continuing plans completed in IDU in
Budget submissions due Non-Continuing Monday, 13 September 2021 17h00
Plan Version 2
Wednesday, 29 September 2021 12h00 to 17h00
Thursday, 30 September 2021 14h00 to 17h00
Tuesday, 5 October 2021 12h00 to 17h00
RAAG Budget 2022 review of plans. Slots 1-6
Thursday, 7 October 2021 15h00 to 17h00
Friday, 8 October 2021 10h00 to 13h30
Tuesday, 12 October 2021 11h00 to 14h00
Budget Heads/Leadership Lekgotla & RAAG Friday, 15 October 2021 08h30 to 13h00 Budget 2022
Monday, 18 October 2021 12h30 to 17h00
RAAG Budget 2022 review of plans. Slot 7-8
Thursday, 21 October 2021 13h00 to 17h00
Tuesday, 2 November 2021 12h30 to 17h00
Monday, 8 November 2021 12h00 to 17h00
RAAG Tuesday, 9 November 2021 10h30 to 13h30 Budget 2022 review of plans. Slots 9-13
Wednesday, 10 November 2021 12h00 to 13h30
Friday, 12 November 2021 11h00 to 13h00
UFC Friday, 19 November 2021 14h00 to 17h00 To review and approve 2022 Fees, Budgets and Projections
RAAG Monday, 22 November 2021 12h00 to 17h00 Reserve day should there be any changes requested by UFC
Council Saturday, 04 December 2021 09h00 Approve 2022 Fees, Budgets and Projections
21 Conventions for IDU Planning
Item Convention Example
Member Planning: VAC_Payclass/Academic rank_Cost VAC_PC05_FND1000_001
Vacancies Center_sequential 3-digit number VAC_ASSOCPROF_ACC1000_002
July 2021 17Budget Guidelines 2022
22 Contacts for IDU Planning
An IDU Planning team has been created in MS Teams and all queries are to be directed within the
Teams chat channel.
23 Attachment 1
2022 Recovery Budget Principles – Unit specific parameters
The Table below provides the parameters as to how costs need to be managed at a unit level to achieve
the desired outcomes as defined by the RAAG-approved 2022 Recovery Budget Principles (articulated
within this 2022 Budget Guidelines document).
Units have the flexibility in deciding how to manage their controllable cost line increases and
decreases compared to their 2021 budget allocations in a way that achieves the total required
parameter/change, whilst ensuring that operational requirements are met/funded. The only
exception regarding flexibility is in staffing costs which must remain at 0% (rate increases will be
applied centrally and volume increases will need to be motivated separately as part of the “above-
parameter asks”), infrastructure and space costs which accounts for an increase in space allocation
charges at 4.5%, other costs (specially in faculties where it relates to research charges at an increase
of 4.5%) and depreciation which accounts for an increase in the asset base.
Total required
Parameter Guidelines – change to 2021
Operating Unit Major Cost Line Item increase/decrease Expenditure
factor on 2021 budget Budget (increase /
-decrease)
FACULTIES
Staffing & Related Costs 0%
Bursaries & Scholarships 4.5%
Course Costs & Related -0.73%
Total Admin & Operating Costs -1.4%
Transport, Travel & Subsistence 2.5% R2.933m
Faculty of Commerce Library Acquisitions 4.5%
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Bursaries & Scholarships 4.5%
Course Costs & Related -0.73%
Total Admin & Operating Costs 1.0%
Transport, Travel & Subsistence 2.5% R5.129m
Faculty of Engineering & The Built Library Acquisitions 4.5%
Environment Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Faculty of Humanities Bursaries & Scholarships 4.5% R5.178m
Course Costs & Related -0.73%
Total Admin & Operating Costs 1.5%
Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5%
July 2021 18Budget Guidelines 2022
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Bursaries & Scholarships 4.5%
Course Costs & Related -0.73%
Total Admin & Operating Costs -1.0%
Transport, Travel & Subsistence 2.5%
Faculty of Health Sciences Library Acquisitions 4.5% R6.120m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Bursaries & Scholarships 4.5%
Course Costs & Related -0.73%
Total Admin & Operating Costs -3.9%
Faculty of Law Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5% R0.822m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Bursaries & Scholarships 4.5%
Course Costs & Related -0.73%
Total Admin & Operating Costs 2.2%
Transport, Travel & Subsistence 2.5%
Faculty of Science Library Acquisitions 4.5% R6.562m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Graduate School of Business Staffing & Related Costs 0%
(increases in operating costs Bursaries & Scholarships 4.5%
concomitant to estimated 20% Course Costs & Related -0.73%
volume increase in Exec Education Total Admin & Operating Costs 9.1%
business – with costs being Transport, Travel & Subsistence 10.0%
variable the increases could be Library Acquisitions 4.5% R5.790m
different dependant on extent of Infrastructure & Space 5.0%
revenue change) Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs -1.4%
Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5%
Centre for Higher Education and Infrastructure & Space 4.5% R0.314m
Development Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
PASS DEPARTMENTS
Communication & Marketing Staffing & Related Costs 0%
Department Total Admin & Operating Costs 3.0% R0.115m
Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5%
July 2021 19Budget Guidelines 2022
Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs -2.0%
Transport, Travel & Subsistence 2.5%
Development & Alumni Library Acquisitions 4.5% R0.011m
Department Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Bursaries & Scholarships 0%
Total Admin & Operating Costs -1.5%
Transport, Travel & Subsistence 2.5%
Department of Student Affairs Library Acquisitions 4.5%
Infrastructure & Space 4.5% R1.378m
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 0.6%
Transport, Travel & Subsistence 2.5%
Finance Department Library Acquisitions 4.5%
Infrastructure & Space 4.5% R0.178m
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 1.6%
Transport, Travel & Subsistence 2.5%
Human Resources Department Library Acquisitions 4.5% R0.165m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
International Academic
Bursaries & Scholarships 4.5%
Programmes Office (variable cost
Total Admin & Operating Costs -0.5%
increases in relation to GSAP
Transport, Travel & Subsistence 2.5%
recovery to be highlighted in
Library Acquisitions 4.5%
submission – not included here)
Infrastructure & Space 4.5% R0.161m
Staffing costs include certain posts
Minor Assets -10.0%
planned at 50% in 2021 back to FTE
Other Costs 0%
in 2022
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 5.1%
Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5%
ICTS Infrastructure & Space 4.5% R0.881m
Minor Assets -10.0%
Other Costs 4.5%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 4.8%
Transport, Travel & Subsistence 2.5%
University Libraries Library Acquisitions 4.5% R1.927m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Other Costs 0%
July 2021 20Budget Guidelines 2022
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 0.2%
Transport, Travel & Subsistence 2.5%
Office of the Vice-Chancellor Library Acquisitions 4.5% R0.133m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 1.6%
Transport, Travel & Subsistence 2.5%
Office for Inclusivity & Change Library Acquisitions 4.5% R0.030m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 2.8%
Institutional Planning Department Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5% R0.037
Infrastructure & Space 4.5%
Minor Assets -10.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 3.0%
Transport, Travel & Subsistence 2.5%
Library Acquisitions 4.5%
Properties & Services Infrastructure & Space 4.5% R0.604m
Minor Assets -10.0%
Other Costs 0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs 2.8%
Innovation & Contracts Office Transport, Travel & Subsistence 2.5% R0.030m
Library Acquisitions 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs -7.3%
Transport, Travel & Subsistence 2.5%
Postgraduate Funding Office
Infrastructure & Space 4.5% -R0.015m
Minor Assets -10.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs -1.3%
Transport, Travel & Subsistence 2.5%
Research Office Library Acquisitions 4.5% R0.109m
Infrastructure & Space 4.5%
Minor Assets -10.0%
Depreciation 6.0%
Staffing & Related Costs 0%
Total Admin & Operating Costs -5.2%
Transport, Travel & Subsistence 2.5%
Registrars’ Office
Infrastructure & Space 4.5% R0.065m
Minor Assets -10.0%
Depreciation 6.0%
PASS UNIWIDE
Total Admin & Operating Costs -5.9%
Transport, Travel & Subsistence 2.5% -R0.380m
July 2021 21You can also read
