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An investigation by the Special Investigating Unit (SIU) has revealed that the National Student Financial Aid Scheme (NSFAS) has paid over R5 billion from 2018 to 2021 to students who did not qualify for bursaries.
On Tuesday, the SIU presented a draft presentation to the parliamentary Standing Committee on Public Accounts regarding NSFAS's proclamation.
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A lead investigator of the SIU, whose name cannot be used for his safety, said the proclamation mandated the SIU to investigate any alleged serious maladministration in connection with the affairs of NSFAS.
This includes improper or unlawful appropriation or expenditure of public money or property, improper or unlawful conduct by the employees or officials of NSFAS and intentional or negligent loss of public money or damage to public property.
He said there were 76 institutions with 40 044 students who did not qualify for bursaries from 2018 to 2021. According to the report, Gauteng had 16 institutions with 17 788 students, followed by the Western Cape, which had 10 institutions with 5 481 students, KwaZulu-Natal had 13 institutions with 4 409 students, the Eastern Cape had 12 institutions with 3 842 students, Free State had six institutions with 2 688 students, North West had four institutions with 2 575, Limpopo had nine institutions with 2 291 students, Mpumalanga had four institutions with 666 students while Northern Cape had three institutions with 304 students. The investigator added:
He said some students admitted that they did not qualify to receive NSFAS funding.
"NSFAS failed to design and implement controls to ensure that there is an annual reconciliation between the funds disbursed to the institution and the allocation of those funds to students. This control weakness led to the overpayment of funds to the different institutions for the period 2018 to date. However, they had recently appointed a service provider to assist them to perform this reconciliation in a process called ‘close-out reporting’."
He added that the reconciliation process was in its initial phases, while further reconciliations and verifications were under way.
He said according to their observations, in the past, it was difficult for NSFAS to identify fraudulent applications for student loans as they did not have access to systems, such as the SA Revenue Service, Home Affairs and credit bureau ITC.
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"At this stage, it seems that there is an improvement in their access to such information, which puts them in a better position to verify the accuracy of the representations made in the applications. There is also the issue of historical problems with the payment of landlords for student accommodation, and the lack of procedure to perform proper reconciliation of the funds disbursed to students and the funded list. This has led to NSFAS hiring consultations to perform this reconciliation for them and the consultants were hired to cover 2017 to date," he said.
