NSFAS Welcomes Findings Of Fraud Investigation

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NSFAS has issued a response to recent revelations into wrongfully allocated funds to certain beneficiaries of the bursary scheme. This mismanagement of funds has cost the scheme millions. 

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The National Student Financial Aid Scheme (NSFAS) came under fire recently after the discovery of wrongfully allocated funds to students who did not meet the scheme's eligibility requirements.

The situation was brought to light by the Special Investigating Unit (SIU), who revealed that nearly R5 billion was inappropriately distributed to around 40 000 students. 

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”.

The bursary scheme has since issued a response in light of these recent revelations. 

The National Student Financial Aid Scheme (NSFAS) acknowledges and welcomes the Special Investigating Unit's (SIU's) report as presented in the Standing Committee on Public Accounts (SCOPA) sitting held on the 18th of April 2023. 

Furthermore, the scheme added: 

NSFAS welcomes the SIU's focus on cracking down on those who want to unduly benefit from the scheme. NSFAS is of the view that this will serve as a lesson and deterrent to those who want to unlawfully benefit to the detriment of poor and deserving students.

According to the SIU's report, 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. 

NSFAS has also recognised that these students falsified their applications in order to gain approval for funding. 

This lack of control resulted in overpayments and underpayments of funds to the different institutions from 2017 to 2019, says NSFAS.

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 actually do meet the funding criteria,  are without the money they need to pursue and continue their studies. 

According to NSFAS:

It was prevalent at the time [2017-2019] when schemes could not verify the information through third party source data, such as the Department of Home Affairs and the South African Revenue Services. These verifications have now been embedded in the NSFAS verification process since 2020. 

This is not the first time NSFAS has been involved in scandals surrounding the mismanagement of funds. 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.


Suggested Article:

NSFAS employees processing student funding applications

As the Higher Education Department continues to work on ensuring that the National Student Financial Aid Scheme (NSFAS) funds are disbursed as conveniently and efficiently as possible among qualifying students in tertiary institutions. The department has warned against any NSFAS-related fraudulent activities that students may perpetrate.

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