In a recent report released by the Auditor General, concerning findings have emerged regarding the National Student Financial Aid Scheme (NSFAS). The findings shed light on significant financial irregularities in the government bursary scheme.
The report, which focused on NSFAS operations, uncovered lapses in control mechanisms and potential financial losses. These were due to over-disbursement of funds, outstanding debts from tertiary institutions and failure to charge interest on student loan accounts.
The Auditor General found that NSFAS disbursed tuition fees as well as allowances to students above the maximum amounts specified in the agreements. This was either due to errors in agreement amounts or over-disbursement.
Effective internal controls...were not in place to prevent the over-disbursements.
NSFAS is owed money by institutions for unused funds, but reconciliation processes were not completed, leading to potential financial loss if credits are not recovered. The AG noted that in some cases the indebted institutions did not declare the money owed to NSFAS.
The monies were not declared by the respective institutions and were thus not recorded in the accounting records and collected by the entity.
It was also revealed that there was a lack of interest charged on student loan accounts which was attributed to outdated student information. They explained that failure to charge interest may result in financial losses for NSFAS.
The non-compliance is likely to result in a material financial loss if the interest is not recovered from loan recipients
In response to these findings, the Auditor General made several recommendations to NSFAS to address the irregularities. These include quantifying their financial losses, taking legal action to recover over-disbursed funds and outstanding debt and implementing internal controls to prevent future occurrences.
The financial loss relating to disbursements in excess of the contract amount should be quantified. The quantification should focus exclusively on loan agreements and should consider the latest available information, including the results of the close-out project.
SIU Investigation
The report also drew attention to an ongoing investigation by the Special Investigation Unit into alleged maladministration within NSFAS.
Proclamation R88 of 22 grants the SIU authority to investigate various matters concerning NSFAS. The proclamation empowers the SIU to probe allegations of serious maladministration related to NSFAS affairs, improper or unlawful conduct by NSFAS employees or officials, unlawful appropriation and expenditure of public funds or property.
The SIU may also probe irregular or unapproved transactions affecting state property, intentional or negligent loss of public funds or damage to public property, and certain offences specified in legislation.
The Auditor General underscored the importance of robust financial controls within NSFAS to safeguard public funds and ensure the effective provision of financial aid to students. The Auditor General vowed to closely monitor the implementation of recommendations to address the identified irregularities.
