The state of affairs at the National Student Financial Aid Scheme (NSFAS) was laid bare before the Standing Committee on Public Accounts (SCOPA) in October 2024, when it conceded that its 2022/2023 financial statements are expected to be tabled in parliament a full year after they were required.
SCOPA plays a critical role in maintaining transparency and accountability in government spending by evaluating financial reports from public entities and state-owned enterprises.
The committee reviews findings from the Auditor-General and holds public hearings where government officials are questioned on financial irregularities, wasteful expenditure, and mismanagement of funds.
NSFAS receives more than R50 Billion rand from National Treasury to support students achieve their academic goals. They do this by providing comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges.
For several years, NSFAS has failed to submit required financial statements to SCOPA. The scheme has blamed universities and TVET colleges for the delayed submission of financial statements.
According to the scheme, only 50 of the 76 public tertiary education institutions have submitted the required information for the 2023 academic period.
NSFAS administrator Freeman Nomvalo outlined the systemic challenges NSFAS faces, which stem from the processes required to reconcile financial statements with participating institutions. The close-out process, intended to verify critical data between NSFAS and institutions, has been problematic since 2017.
The process had not been completed since 2017, meaning the financial statements and associated amounts were not properly reconciled between NSFAS and institutions.
Challenges With Close-Out Processes
NSFAS has faced several challenges in its close-out processes with intuitions. Their main priority is to obtain accurate and complete full cost of study data from institutions that mirror the student fee account.
This is critical in ensuring that NSFAS is not overspending on students due to inaccurate student data.
Key issues also include the insufficient capacity of NSFAS to properly format and clean data, delays in allocating NSFAS funds to student accounts, inconsistent recording of allowances, and a high turnover of financial aid staff.
NSFAS itself faces similar challenges, with changes to its COP team, unresolved decisions on unfunded historical debts, staff turnover, and insufficient resources.
The government bursary scheme said agreements have been signed with three institutions, and letters have been issued to two universities, urging them to clear student accounts and release certificates.
Financial recoveries of R486 million from 10 institutions have been secured, and payments have been initiated to address outstanding amounts NSFAS owes to certain institutions.
Minister Demanding Accountability From Institutions
Minister of Higher Education Nobuhle Nkabane assured the committee that steps will be taken to ensure institutions submit the required information on time.
The minister revealed plans to issue a directive to all institutions, warning them of penalties for withholding critical data. The minister also intends to implement measures, in collaboration with university councils and vice-chancellors, to ensure compliance.
I'm going to universities and TVET Colleges and advise them that I intend to impose penalties on those who withhold critical data from NSFAS thereby preventing NSFAS from submitting its annual financial statements.
