NSFAS Suffered Potential Financial Losses - Auditor General

Please share this article


NSFAS' reported lapses of control measures is negatively impacting the schemes ability recover money form indebted institutions and students. This was revealed by the Auditor General. 

Advertisement i

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It was also revealed that there was a lack of interest charged on student loan accounts which was attributed to outdated student information.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.

Suggested Article:

NSFAS audit fundings

Challenges at NSFAS was laid bare on Wednesday as the Auditor General briefed the higher education portfolio committee this week. Several recommendations were made to the financial aid scheme. 

Online Shopping Links

Takealot - Temu - Amazon - Shein


WhatsApp Channel

Sponsored Ad



Google News

Post-Matric Options


After completing your matric certificate exams, you are faced with a lot of post-matric options that can shape your future paths.

These options range from pursuing higher education at universities or colleges, entering vocational training programs, joining the workforce, or even starting your own business. There are so many choices but we are here to help.


Where to Study

Advertisement m

Other Articles

Over the past few weeks, thousands of Grade 11 and Matric students were informed that they did not receive an offer to study at a Public University. Every year, only a fraction of applicants are successful, which severely impacts the future plans of these students and their parents, who do not know what their further options are.  


Latest SASSA articles

Sassa revealed that individuals can submit Sassa grant applications online. Here's everything you need to know about Sassa online grant applications. 

Millions of people living in South Africa are unemployed. These people can apply for the R370 grant in June 2024. 


Careers Advice

Everyone is spending so much time online these days - which has lead to Digital Marketing growing into a big business. Working in Digital Marketing promises a long and profitable career but what exactly does a Digital Marketer do? And how do you get into Digital Marketing?

Advertisement i