The Organisation Undoing Tax Abuse (OUTA) has called for a full financial investigation into the Insurance Sector Education and Training Authority (INSETA) after a preliminary investigation uncovered significant procurement and governance concerns linked to the Insurance Sector Student Fund (ISSF).
According to OUTA, the investigation raises questions about how the ISSF budget increased from approximately R20 million per year to R442.8 million during the 2024/25 financial year, while hundreds of bursary recipients reportedly went without financial support for several months.
The INSETA is tasked with addressing skills developments needs and shortages within the insurance sector. This normally focuses on employees working in the sector and how they can be up-skilled. However the SETAs fall under the same government department as the universities, and there have been calls for the SETAs to also support students through bursaries.
The OUTA investigation does not question the use of SETA funds to supply bursaries, but rather on the process used to appoint a service provider company to manage the process.
OUTA Questions Massive Increase In INSETA Student Fund Budget
OUTA's preliminary investigation found that the Insurance Sector Student Fund was managed internally between 2021 and 2024, with annual project values ranging between R18.6 million and R20 million.
However, during the 2024/25 financial year, the approved project value reportedly increased to R442,783,502, with recorded expenditure of R158,719,495 under project code INPROJ000369.
The organisation believes the dramatic increase in funding requires greater public scrutiny and has called on INSETA to release the general ledger for the project to show exactly how the funds were allocated and spent.
Procurement Process Under Scrutiny
The investigation also raises concerns about the procurement process used to appoint a service provider to administer the Insurance Sector Student Fund.
According to OUTA, INSETA advertised a competitive tender in 2022 for a project management service provider. Three bids were reportedly received before the tender was cancelled after bidders were informed that there was insufficient funding.
Despite the cancellation, media reports referenced in OUTA's investigation indicate that a service provider was later appointed to administer the bursary fund.
If confirmed, OUTA believes the appointment could raise questions regarding compliance with Supply Chain Management requirements, Section 217 of the Constitution and the Public Finance Management Act.
Hundreds Of Students Reportedly Left Without Bursary Payments
OUTA said the governance concerns had a direct impact on students who depended on bursary funding to continue their studies.
According to reports cited in the investigation, approximately R70 million was advanced to the service provider to administer bursary payments. Despite this, 879 students reportedly did not receive their bursary payments during the first five months of the year.
The delayed payments allegedly left many students facing eviction, food insecurity and the possibility of academic exclusion.
The investigation further states that INSETA was forced to make emergency accommodation payments totalling R4.6 million directly to accommodation providers to prevent affected students from losing their housing.
OUTA said this is one of the most concerning aspects of the matter, as funding intended to support students allegedly failed to reach beneficiaries when it was most needed.
