The Special Investigating Unit (SIU) has confirmed that it has successfully returned R1.7 billion to the National Student Financial Aid Scheme (NSFAS), with the recovered funds set to be redirected towards supporting students at higher education institutions.
This amount forms part of the R2 billion recovered so far by the SIU from universities, Technical and Vocational Education and Training (TVET) colleges, and former students who were not eligible for NSFAS funding.
According to the SIU, the recovered money relates to funds that were unallocated between 2016 and 2021.
“The funds in question were unallocated from 2016 to 2021. These unallocated funds represent financial resources that were designated for students who qualified for funding but later changed institutions or deregistered,” the Special Investigating Unit said in a statement.
“These funds are retained by the institution for one year but in this case, were kept them for more than a year.
“The existence of unallocated funds can be attributed to inadequate control systems and a lack of reconciliation processes implemented by NSFAS during that period, resulting in a failure to recover these funds from institutions of higher learning,” the SIU said.
The SIU also welcomed NSFAS’s recent announcement that it will implement the unit’s recommendations to improve financial controls. These include the introduction of a data-driven reporting framework aimed at ensuring timely payments to service providers.
The new framework will strengthen accountability by generating monthly occupancy and payment reports. NSFAS has also indicated that it is considering introducing an in-house payment system to improve financial management and remove reliance on intermediaries.
Education Trade Union Responds
Trade union Nehawu issued a strong statement on the matter. "The recovery of the funds by the SIU is an indictment on NSFAS, which is tasked with providing bursaries and loans to eligible students at public higher education institutions and for the administration of such loans and bursaries, as well the recovery of those loans. The fact that NSFAS had failed to monitor and recover the funds in question is of serious concern," said Nehawu.
"Furthermore, this recovery by the SIU clearly highlights the urgent necessity for a comprehensive forensic investigation into all acts of wrongdoing, financial mismanagement, maladministration, and corruption at NSFAS, in order to get to the bottom of the rot."
"Equally, the Department of Higher Education and Training must take full responsibility for what has transpired at the financial scheme. The department has an oversight role on NSFAS as a national public entity. The administration, financial mismanagement and governance failures of NSFAS should not have occurred, had the department played its oversight role in NSFAS and as such those tasked with responsibility at DHET much be held accountable".
The statement conculded, "As NEHAWU, we call on relevant law enforcement authorities to implement measures which will include amongst others; criminal prosecution, and litigation for all those that misused public funds. There must be decisive consequence for all those involved in the misuse of these funds to send a clear message."
Improving Governance at NSFAS
The SIU praised NSFAS for taking steps to strengthen its systems and improve governance.
As part of the total R2 billion recovery, the SIU has collected R126 478 184.64 from 1 055 parents and unqualified NSFAS beneficiaries who signed acknowledgements of debt, agreeing to repay the funds over time.
The unit has urged other unqualified NSFAS beneficiaries who have not yet come forward to contact the SIU and make arrangements for repayment.
Additional recoveries include:
- R69 727 824.22 from the University of the Free State (second payment)
- R5 502 040.09 from the University of Mpumalanga (second payment)
- R15 million from Tshwane North TVET College
Under Proclamation R88 of 2022, the SIU is authorised to investigate allegations of corruption and maladministration at NSFAS and recover financial losses suffered by the State due to corruption or negligence.
The SIU is empowered to institute civil action in the High Court or a Special Tribunal to address wrongdoing uncovered during investigations.
In line with the SIU and Special Tribunals Act 74 of 1996, any evidence of criminal conduct identified during investigations will be referred to the National Prosecuting Authority for further action.
