Public higher education institutions (HEIs) in South Africa enjoy considerable statutory autonomy. This autonomy makes it important that the structures of governance and management of these institutions should account to both internal and external stakeholders in a consistent and prescribed manner. The developments in Annual Reporting and the emphasis on "harmonisation," both nationally and internationally, require that Annual Reporting should comply with generally accepted practice.

This schedule to the regulations provides a framework for Annual Reporting by public HEls aimed at ensuring minimum standards of reporting by governance structures and by management, and financial reporting according to the South African Generally Accepted Accounting Practice (SA GAAP)/lnternational Financial Reporting Standards (IFRS). Each HEI may select which of these standards to adopt and to comply with permanently. The manual constitutes the determination of the Minister of Education in terms of section 41 of the Higher Education Act, 1997 (Act No.101 of 1997), as amended.

Conditions confronting higher education institutions have become more demanding with regard to good management over the past two decades. Constantly dwindling opportunities for acquiring essential resources and, in recent years, increasing competition among public HEls and from a growing sector of private higher education institutions, are but a few examples of factors that have contributed to a new and challenging environment.

Compliance with the demands on HEls to adopt the best financial and general management practices under these increasingly difficult economic conditions are largely dependent on the availability of excellent financial and other relevant information in accordance with best practice in the private sector. (King II: 18-20)

The Council and the Principal of a higher education institution is responsible for initiating measures to: (King II: 46-70)

The promotion of economy, efficiency, effectiveness, and ethical behaviour in accordance with relevant legislation depends on adequate management measures for, amongst other things, the planning, budgeting, authorisation, control and evaluation of the procurement and utilisation of resources. At the same time it is essential for every HEI to maintain the quality in its primary activities of education and research so that they conform to acceptable standards. It is the responsibility of a Principal, through the executive management team, to institute these management and operational measures. It is the responsibility of the Council to ensure that an institution's primary operations and its management and administration function accordingly.

To meet the challenges of a changing South Africa, higher education decision-makers are forced to look ahead, for a decade and beyond, in an endeavour to anticipate the demands of a changing environment and the way in which they should plan to satisfy these demands. It has therefore become urgent for HEI information systems to support "best practice" in general and sound financial management. In respect of the latter, it is necessary to facilitate more flexible financial planning and reporting processes in order to enable the management of an HEI to budget, allocate and employ its financial resources to the best advantage of the institution and with the minimum of restrictions.

The Higher Education Act requires HEls to report on their general – specifically including the financial - condition (section 41). In such reporting institutions need to comply with relevant standards of accountability for their governance and management as required in the King Report on Corporate Governance - 2002, and in their financial reporting they should comply with the standards as codified in the South African Statements of Generally Accepted Accounting Practice (GAAP)/International Financial Reporting Standards (IFRS).

However, the form of presentation of an Annual Report is adapted from what is in general use in the private sector in order, amongst other things, to acknowledge the identification of the different purposes for which funds are held and used in higher education institutions.

Individuals or groups of individuals that assume fiduciary and/or managerial responsibilities by means of delegated mandates incur an absolute responsibility to give a regular account of the results of exercising those delegated powers. In discharging this obligation it is essential that this form of reporting is not restricted to events, facts, and achievements in abstract terms but provides the means whereby these can be assessed and measured against projected outcomes, plans, and targets.

In South African HEls the following delegated powers and responsibilities are provided for in terms of the Higher Education Act:

The duly constituted Council - Governance

The duly constituted Senate - Academic Affairs

The duly appointed Principal- Management/Administration

It follows that each of these has the obligation to account for actions performed under their respective mandates. By law they are required to provide such account to the state through the Minister of Education and, according to accepted practice, to report to other stakeholders, which would normally include staff and students of the institution, its donors and alumni and members of the community in which it is located or serving.

The requirements to report on the structures and the achievements of governance, academic affairs, and general management/administration, as indicated above, and on the financial condition, have become the norm for annual reporting for HEls. This manual therefore contains the required content and format of such an annual report.

The governance, management, and financial reports must reflect the extent to which an institution's objectives in terms of its vision, mission, and strategic targets have been achieved, as well as showing that the structures of governance and of management/administration conform to accepted norms of corporate practice.

Financial statements and supporting data have been designed primarily to provide the means of assessment of financial stability and performance. Quantitative, largely financial, data are measures of these requirements. Financial data and derived indicators must, however, interrelate with the other non-financial data required from HEls in order to assist those who prepare and those who use those data in planning and decision-making. The definition of standardised financial reporting requirements serves to facilitate communication between the providers and users of such information. This manual sets out to achieve this aim by: