Page 19 University of Technology, Jamaica Notes to the Financial Statements 31 March 2020 (expressed in Jamaican dollars unless otherwise indicated) 3. Financial Risk Management (Continued) (a) Credit risk (continued) Credit review process The management of the University is responsible for regular reviews of the ability of students and commercial customers to meet repayment obligations, as well as the monitoring of other counterparties. Receivables The University’s exposure to credit risk is influenced mainly by the individual characteristics of each student and commercial customer. The University has procedures in place to restrict awarding of academic certifications for courses until repayment obligations are met. Customer credit risk is monitored according to their credit characteristics such as whether it is an individual or company or whether the counter party is experiencing financial difficulties. Receivables relate mainly to the amounts due from: • Students – in some cases, this is based on a signed agreement between the students and the University to pay on account over a specified period, not exceeding 9 months; • Students Loan Bureau (SLB); and • Approved scholarship donors. An assessment of each group of debtors is done and the credit risk relating to each evaluated. Specific actions are taken according to debtor group and the identified risk. In addition, the Integrated Student Administrative System assists with the tracking of payments and monies owed by the various stakeholders and this further assists management with current information to assess each situation. The University establishes a provision for impairment that represents its estimate of expected losses in respect of receivables. The University addresses impairment on an individual basis. The provision is mainly in relation to Student Receivables. Investments The University limits its exposure to credit risk by investing mainly in liquid securities, with counterparties that have high credit quality and Government of Jamaica securities. Accordingly, management does not expect any counterparty to fail to meet its obligations. The University has documented investment policies which guide the management of credit risk on long term investments, short term investments and reverse repurchase agreements. The University’s exposure is continually monitored. Cash and bank balances Cash and bank transactions are limited to high credit quality financial institutions. The University has policies that limit the amount of credit exposure to any financial institution. University of Technology, Jamaica 135
RkJQdWJsaXNoZXIy NDQ5NzI=