BANKSETA AR 31 AUGUST

ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2022

30. NOTES TO STATEMENT OF COMPARISION OF BUDGET AND ACTUAL AMOUNTS (CONTINUED)

30.4 Investment Revenue from Exchange Transactions Investment revenue from exchange transactions was 39% greater than budgeted due to the BANKSETA having a larger investment pool than budgeted due to discretionary grant and project expenditure being lower than budget. The average rate of 3.99% is in line with budget. The reasons for the lower discretionary expenditure are outlined in note 30.5 below. 30.5 Employer grant The approved final budget includes the estimated mandatory grant spending of the current financial year based on budgeted mandatory levies and mandatory grants percentage of 20%. The increase in mandatory grant expenditure is 9% above budget and 11% above prior year is in line with the increased mandatory levies received. The mandatory grant claim ratio climbed to 98%. 30.6 Project and discretionary grant expenditure The BANKSETA underspent in this category by 55% compared to the revised budget. The budget was also doubled by an increase of R564 million in November 2021 when National Treasury approved the surplus. 30.6.1 The BANKSETA began 2020/21 year with a low level of commitments due to disruption in supply chain management activities in 2019/20 and 2020/21and late approval of discretionary grant funding windows. The opening commitments are the base from which project expenditure draws from within the first 6 months of the year. 30.6.2 The evaluation of discretionary grant funding window applications for the 2021/22 year were subjected to a comprehensive review process and therefore the request for Board approval was tabled from October 2021 onwards. This led to the applications only being approved later during the year. The BANKSETA could only make limited progress on implementation and completion of 2021/22 discretionary projects. The BANKSETA will advertise the 2022/23 discretionary grant funding windows earlier to avoid this being repeated in the next financial year. 30.6.3 Some disruption in SCM activities due to challenges with tender advertisement platforms in early 2021/22 year, and legislation challenges in February and March 2022. 30.6.4 Covid restrictions led to disruptions in projects that required classroom attendance and/or work based learning. The BANKSETA moved to other delivery methods whereever possible. 30.6.5 The extension of the 2021 academic year for higher education sector and the subsequent delays in start of the 2022 intake. The reasons include:

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PART E: FINANCIAL INFORMATION | BANKSETA ANNUAL REPORT 2021/22