The National Student Financial Aid Scheme (NSFAS) has lost millions of rands due to corruption and maladministration. This admission was made by Higher Education Minister Blade Nzimande last week.
NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges. The funding not only includes money for tuition and registration fees but also includes several allowances for food, accommodation and learning materials for students.
The scheme is essentially a R50 billion operation annually, according to the minister.
Nzimande was asked what the total amount of money lost by the NSFAS through detected fraud and/or maladministration in each year since 2017. The minister revealed that more than R21.4 million has been lost through detected fraud and maladministration.
A matter of concern was that no money has been recovered by NSFAS yet.
Approximately R21 446 855 was lost. None of the funds have been recovered as some of these matters are still being investigated by law enforcement agencies.
Nzimande said while no money has yet been recovered from the scheme, law enforcement agencies are investigating the alleged crimes.
The NSFAS has reported 14 matters with the SAPS relating to alleged fraud.
NSFAS Challenges
NSFAS remains under the spotlight due to several challenges. Their mandate is to ensure children of the poor and working class have access to funding for their tertiary education studies.
In February 2024, Parliament demanded answers for a multitude of issues plaguing the organisation.
A major point of contention was the significantly delayed 2021/22 annual report. The South African Auditor-General delivered a scathing blow, revealing a regression from previous years.
After four years of qualified audits, NSFAS received an adverse audit opinion, the worst possible rating. The report blamed "inadequate organisational capacity and systems" for the financial woes.
NSFAS's rapid growth since 2018 outpaced its ability to manage its resources effectively. Despite years of warnings about internal control deficiencies, the organisation kept expanding its responsibilities without addressing these weaknesses.
The Auditor-General concluded that NSFAS simply wasn't ready for such a massive undertaking.
Committee members also criticised NSFAS' 2021/22 annual report for lacking crucial details on resource utilisation and containing inconsistencies.
Further concerns arose over the student accommodation pilot project. Accreditation of service providers remains a major hurdle, with NSFAS citing capacity challenges. Committee members expressed concern about the organisation's ability to expedite the process.
A separate investigation into the NSFAS board chairperson Earnst Khosa was also underway at the time. The investigation into Khosa came after audio recordings were made public indicating alleged corruption.
In April 2024, Ernest Khosa resigned hours before the NSFAS board was fired by Minister Nzimande.
Nzimande cited several factors for firing the board and placing NSFAS under administration. This included allowance payment challenges and failure of the board to implement the recommendations of the Werkmans report.
