The National Student Financial Aid Scheme (NSFAS) racked up R60 billion in irregular expenditure over the last four years.
The Portfolio Committee on Higher Education Tebogo Letsie says NSFAS is “too big” to fail. The chairperson made these remarks after receiving NSFAS’ 2024 annual report.
NSFAS submitted its 2022/2023 annual report to parliament more than a year after it was due. Several reasons were given for the delayed submission with the main factor being the dissolution of the NSFAS board.
The Office of the Auditor-General was also in attendance to provide the entities’ audit outcomes. Their findings were damning.
They estimated that NSFAS racked up R60 Billion in irregular expenditure over the last four years. According to the report, the lack of clarity in the NSFAS eligibility criteria led to significant irregular expenditure in 2019/2020.
The appointment of the NSFAS allowance direct payment system providers, which the scheme has since abandoned, also contributed to irregular expenditure in 2022/2024.
The contention NSFAS Cape Town Headquarters Lease also counted against the scheme.
Importance Of Accountability At NSFAS
Chairperson Letsie says while NSFAS remains a beacon of hope for students, the scheme makes it difficult for parliament to allocate funds if it does not have proper accountability.
The scheme receives around R50 billion annually to fund students from poor and working-class backgrounds. Without this funding, many students would be excluded from obtaining a tertiary education qualification due to affordability.
And you, not having accounted for funds you were given, make it hard for the committee to appropriate monies when there is no proper accountability.
The chairperson warned that if NSFAS be unable to account for funds correctly, deserving students could be left without funding.
We don’t want a situation where NSFAS says a student deserves funding and there is not enough funding, yet there is a billion rand in wasteful expenditure incurred by the entity.
NSFAS Board Appointment
Following several challenges related to student funding, Blade Nzimande, Former Higher Education Minister, dissolved the NSFAS board and placed the government bursary scheme under administration in April 2024. Freeman Nomvalo was then appointed as the new NSFAS Administrator.
Higher Education Minister Nobuhle Nkabane confirmed that the appointment of a new NSFAS Board is imminent.
2025 Academic Year Preparations
The committee expressed its confidence that the start of the 2025 academic year will be incident-free, as the committee met stakeholders last week who assured the committee that all systems are in place to support returning and first-year students.
NSFAS revealed plans to release R3.7 billion in January 2024 as upfront payments to universities. These funds will ensure timely disbursement of student allowances for the 2025 academic year. In addition, NSFAS has confirmed that a separate upfront payment of 20% of TVET Colleges’ tuition allocations—amounting to R641 million—will be disbursed by 10 January 2025.
