"Inappropriate" NSFAS Funding Of Around R5 Billion Uncovered

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The National Student Financial Aid Scheme is once again under fire for the latest revelation into mismanaged funds. The discovery came after an investigation was launched to look into the scheme's operations and to who funds are allocated.

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The Special Investigating Unit (SIU) has uncovered corruption taking place within the National Student Financial Aid Scheme (NSFAS), that stretches all the way back to 2017. 

The SIU's investigation revealed that at least 40 000 students were possibly funded inappropriately by the bursary scheme. According to the SIU, NSFAS has spent over R5 billion to pay or overpay students who do not qualify for funding.  

The students are from 46 tertiary institutions across the country. 

The SIU has stated that these students are from households that earn more than the cut off of R350 000, and “therefore would not qualify for NSFAS funding, based on the funding rules”.

These students did not submit their parents' details upon application and therefore the means test was not properly conducted.

According to the SIU, NSFAS had failed to create and implement measures to keep track of the funds that are disbursed to tertiary institutions and the funded list of registered students. 

This lack of control resulted in “overpayments and underpayments of funds to the different institutions for the period 2017 to date”.

The SIU has also identified different scenarios in terms of which students were funded because of overpayments, underpayments, unfunded students, double dipping and dropouts, and the involvement of syndicates in student accommodation.

Because students who are not meant to qualify for NSFAS funding are now receiving allowances, this has meant that there are too many students to fund and those who do actually meet the funding criteria are without the money they need to pursue and continue their studies with. 

SIU Spokesperson, Kaizer Kganyago, has labelled this matter "disturbing", but that the unit cannot confirm whether the entire R5 billion is fraudulent. 

"We still have to go to each and every one of the 40 000 students and understand what lead to [this]. In some instances, we'll see that IDs or salary advisors of people who are not their [student's] direct parents," explained Kganyago. 

It is unclear whether NSFAS purposefully orchestrated with NSFAS officials and students to receive incorrect payments. 

This is not the first time that NSFAS funds have been inappropriately allocated. In fact, NSFAS went under administration in 2018 due to mismanagement.

In 2021, it was revealed that thousands of "ghost students" were beneficiaries of NSFAS, which frustrated many as legitimate beneficiaries were stuck in limbo while waiting for their allowances to be deposited.

Carte Blanche reported that only 40% of 440 000 irregular records were checked and that NSFAS didn't even know if the students were real. The report said that these were students that don't exist but are being paid; i.e. "ghosts". 

Also in 2021, NSFAS experienced a shortage of funds for first-time entering students, but reportedly had irregular expenditure of over R500 billion.

NSFAS was also under investigation last year due to allegations of corruption that stem from more than five years ago.

At the time, the SIU's probe was focused on mainly two areas, namely, the management of NSFAS’s finances, and the allocation of loans, bursaries and any other funding payable to students in terms of the NSFAS Act. 

The investigation came after the East London Magistrates’ Court, in May 2022, found Sibongile Mani guilty of stealing R818,000 of the R14 million that was accidentally credited to her in 2017, while she was a student at Walter Sisulu University (WSU). 

In reference to this latest uncovering of NSFAS irregularities, the SIU stated that "All these implications are because the different governance levels and senior management staff did not fully discharge their duties in terms of all the different applicable legislation." 

The Special Investigating Unit has vowed to get every cent of the misspent R5 billion back, and has already recovered nearly R40 million from three different institutions in the Western Cape and Mpumalanga.


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