Summary Financial Report

Statement of Financial Position                         2020 (ZAR) 2019 (ZAR)
ASSETS
Investments
4,038,129
3,964,366
Cash resources
8,796,861
14,066,346
TOTAL
12,834,991
18,030,713
RESERVES & LIABILITIES
Access and Support Fund
3,321,476
4,047,729
Fr Noel Stanton Fund
8,731,587
8,556,113
TOTAL RESERVES
12,053,063
12,603,842
Accounts Payable
210,043
475,357
Donor funds in advance
571,885
4,951,514
TOTAL
12,834,991
18,030,713
Summary of Income & Expenditure 2020 (ZAR) 2019 (ZAR)
INCOME
Grants received – Trusts & Corporates
Direct student funding
5,230,998
6,241,561
Support & administration
11,579,748
13,315,559
Special projects
502,727
1,019,564
Administration fee from NSFAS
262,671
330,533
Investments
704,985
380,375
TOTAL
21,612,202
17,956,519
EXPENDITURE
Direct student costs (eg. meals, books, transport)
5,472,356
5,858,871
Student support services
6,448,398
6,916,840
Programme Development & Research
2,788,596
1,405,714
Recruitment & Selection
332,169
174,442
Human Resource Administration
420,708
881,719
Managements costs
596,267
731,249
Communication & IT
670,201
627,755
Finance & bursary administration
1,410,883
1,548,294
Property & vehicle costs
1,382,162
1,267,031
Fundraising
523,211
526,886
TOTAL
21,321,683
18,662,069
Net surplus / (deficit) for year
(705,550)
291,639

Corporate Governance

The REAP Board met three times in 2020 and the Board Executive Committee four times, all on a virtual basis due to Covid-19 restrictions. The Board consists of 14 members and is responsible for policy and overall governance, with the day-to-day management delegated to the Director and the senior leadership team.

The Board endorses the principles in the Voluntary Independent Code of Good Governance and Values for Non-profit organisations in South Africa. The Board abides by the principles of openness, integrity and accountability.

Systems of financial and internal control are in place and provide reasonable assurance that the assets are safeguarded, and that liabilities and working capital are efficiently managed. The financial information has been disclosed in line with the latest international best practice. Nothing has come to the attention of the Board or the independent external auditors to indicate any material breakdown in the functioning of the internal controls during the financial year.

Highlights

2020 was an extraordinary year for the whole world due to the Covid-19 pandemic, and literally no one could escape its impact. I am pleased to confirm that REAP has managed to weather this storm relatively well and that the financial position and operation results of the organisation for the year ended 31 December 2020 are adequately reflected in the financial statements.

As reported previously, the introduction of ‘free’ higher education in 2018 has caused many of REAP’s longer term donors to re-evaluate their funding priorities, resulting in a gradual withdrawal of what was previously our ‘core’ funding. In addition, harsh economic conditions, exacerbated in 2020 by Covid-19, have caused other donors to either reduce or withdraw their support. This raised some serious concerns regarding our medium to longer term financial sustainability.

Whilst our 2020 funding remained relatively secure, 2021 funding for our university work is likely to be substantially reduced and replacing it in the current economic climate will be challenging. Nonetheless there should be sufficient funds to at least support our current university cohort to completion, even if there is minimal new intake moving forward. On a more positive note, we have secured very longer term sustainable funding in the renewable energy BBBEE space with Letsatsi Solar Park Trust, and there is real potential to grow in this way.

REAP was forced by Covid-19 to drastically alter its means of supporting students, with very few face-to-face interactions and events, and adapting to an almost entirely virtual platform. This brought some cost savings with reduction in costs such as transport, catering and venue hire.

Despite reduced 2020 income, with prudent management of costs, REAP was able to record a modest operating deficit of R705,550 in 2020, meaning our Access & Support reserve fund stands at R3,321,476 as at 31 December 2020. There was also an improvement in the investment performance of our Noel Stanton reserve funds, growing from R8,556,113 in 2019 to R8,731,587 as at 31 December 2020. Our cash holdings at end the of 2020 were significantly reduced from previously years but this was almost wholly attributable to some of our key donors only making their advance payments a few days later in January 2021, rather than in December as in previous years. This is not a cause for concern and reflects the snapshot at year end rather than any cash flow challenge.