The Special Investigating Unit (SIU) has made significant strides in addressing financial irregularities within South Africa's higher education sector, recovering over R1.7 billion in unallocated National Student Financial Aid Scheme (NSFAS) funds from institutions of higher learning.
The investigation, authorised by Proclamation R88 of 2022, signed by President Cyril Ramaphosa, uncovered substantial mismanagement of NSFAS funds. Chairperson of the Portfolio Committee on Higher Education, Tebogo Letsie, commended the SIU for its recovery efforts, describing the process as proof of corruption within universities.
The SIU recently confirmed the recovery of R450 million from the University of Witwatersrand (Wits) and R438 million from the University of the Free State (UFS), taking the total amount recovered to R1.7 billion. These unallocated funds, spanning the years 2016 to 2021, stemmed from multiple sources of funding received by students, changes in the cost of study, and universities' failure to return surplus funds at the end of each academic year.
NSFAS's Systemic Failures
While the SIU’s recoveries mark progress, the investigation revealed significant shortcomings within NSFAS. Specifically, NSFAS failed to implement proper annual reconciliation controls between disbursed funds and the actual list of registered students. This lack of oversight allowed universities to claim funding for non-enrolled students and inflate costs, exacerbating financial irregularities.
Chairperson Letsie emphasized the urgency of addressing the lack of system integration between NSFAS and universities to eliminate wastage of public funds.
It is estimated that NSFAS accumulated R60 billion in irregular expenditure over the last four years—more than the scheme’s annual budget for providing bursaries and loans to deserving students enrolled in approved courses at universities and TVET colleges.
Accountability and the Way Forward
NSFAS has praised the SIU’s efforts and reiterated its commitment to financial accountability. NSFAS stated it will continue cooperating with the SIU by providing necessary information and support to ensure the recovery process concludes successfully.
All recovered funds are being deposited into a bank account managed by the SIU until NSFAS and institutions determine the rightful allocation of monies owed. In some instances, NSFAS will be required to repay institutions for outstanding claims.
The Portfolio Committee on Higher Education has urged NSFAS to improve its systems to prevent future irregularities and ensure that funding reaches the students who need it most.
