Page 135 - DUT Annual Report 2020

DURBAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
6. RECEIVABLES AND PREPAYMENTS (continued)
The University considers the following as constituting an event of default for internal credit risk for management purposes for student debtors:
 When the financial asset is past due its respective fee instalment plan dates, unless the University has
reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
The rate of interest charged to self- paying students is charged on overdue instalment amounts at a fixed rate of 2% per month (2019: 2%), in accordance with the National Credit Act, except for NSFAS, staff and sponsored students. There was no interest charged in 2020 due to the impact of COVID-19.
Amounts past due (after provision for impairment) are not considered impaired due to the University’s experience in collecting amounts when students renew their registration in the next academic period and based on handed over collection trends. No collateral is held with regard to receivables and prepayments.
Included in student and residence fees are NSFAS debtors. This is a government organisation that pays the University based on valid claims made by the student. NSFAS pays the University based on claims within 12 to 24 months or less.
The movement in the provision for impaired student receivables has been included in ‘other current operating expenses’ in the consolidated income statement.
Other accounts receivables and prepayments
The University considers debtors in default when contractual payments are 18 to 24 months past due. These are then individually considered for impairment in order to calculate the expected loss rate per grouping.
Sundry receivables consist of amounts due from societies and organisations, which operate through, the University, but do not form part of the University’s activities.
Due to the nature of operations the University manages and monitors outstanding student debt on an academic yearly basis. The University considers all prior years' outstanding fees as past due. The University anticipates that the majority of current year fees will be settled either as part of the registration process for the 2021 academic year or later by NSFAS. It is University policy that returning students are not allowed to register with outstanding debt unless they sign an acknowledgement of debt, or are funded by NSFAS or coded as sponsored students.
The student fee receivable is grouped according to the year in which the student fee was earned, in order to calculate the expected loss rate per grouping.
As at December 31, 2020 the age analysis for student debtors is as follows:
2020
Net student receivables Gross student receivables Provision for expected loss Expected loss rate
2020
R ‘000
522 704
22%
2019
R ‘000
56 551
52%
2018
R ‘000
3 667
75%
2017
R ‘000
- 100%
2016 and prior periods R ‘000 -
Total
R ‘000
582 922
DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
671 923 117 784 14 930 25 706 28 177 858 520 (149 219) (61 233) (11 263) (25 706) (28 177) (275 598)
100% 32%
2019 Total
R ‘000
Net student receivables 345 409 Gross student receivables
Provision for expected loss
Expected loss rate 40%
580 409 (235 000)
133