NSFAS provides comprehensive bursaries and student loans to deserving students enrolled in approved courses at universities and TVET colleges. NSFAS funding covers tuition and registration fees, as well as several allowances for food, accommodation, and learning materials.
However, the SIU's investigation, authorised by President Ramaphosa's Proclamation R88 of 2022, has exposed a systemic failure in financial controls.
Reconciliation Failures Lead to Over and Underpayments
SIU Head Advocate Andy Mothibi told the Parliamentary Committee on Higher Education that NSFAS failed to implement proper reconciliation processes between disbursed funds and student allocations. This oversight, dating back to 2017, has resulted in widespread overpayments and underpayments to institutions. The SIU estimates it has recovered R2 billion so far.
The SIU has called for improved internal controls at NSFAS to prevent errors and ensure accountability.
NSFAS is currently attempting a "close-out reporting" process to rectify these discrepancies, but the reconciliation remains incomplete, obscuring the full scale of the financial mismanagement.
Systemic Challenges Hamper Fraud Resolution
Portfolio committee chair Tebogo Letsie highlighted the systemic obstacles hindering fraud resolution within NSFAS. Delays from the National Prosecuting Authority and the Department of Justice undermine accountability, allowing officials under investigation to resign or retire before facing consequences.
When acting on proclamations, the SIU often faces protracted response times from the National Prosecuting Authority and the Department of Justice. These delays undermine accountability; officials under investigation may resign, retire, or leave their posts, making it difficult to recover misappropriated funds or hold individuals responsible.
Letsie also condemned unethical practices, including students fraudulently accessing funding with the alleged assistance of NSFAS employees.
"There are students who fraudulently access funding, depriving deserving candidates of opportunities. Even more alarming, some NSFAS employees knowingly approve of ineligible applicants, perpetuating this injustice," said Letsie.
SIU Investigation Continues, Recovery Efforts Underway
The SIU's investigation, initially scheduled to conclude in March 2025, may be extended due to the complexity of the cases.
We aim to complete the investigation by the 31st of March but based on the magnitude of some of the matters we might be in a position to continue with other matters.
Despite the challenges, the SIU has achieved some success in recovering funds. Last year, they facilitated the refund of nearly R9 million to Boland College, representing underpayments from NSFAS between 2017 and 2022. The SIU also confirmed the recovery of funds owed to institutions by NSFAS.
"With the intervention of the SIU, the amount owed by NSFAS to the institution was quantified and paid, ensuring that the institution receives what is due to them."
