NSFAS Appreciates Fraud Investigation’s Results
NSFAS has responded to recent discoveries about money that was improperly given to some bursary scheme recipients. This financial negligence has cost the plan millions of dollars.
Following the discovery of monies that had been improperly given to students who did not match the scheme’s qualifying rules, the National Student Financial Aid Scheme (NSFAS) has recently come under scrutiny.
The Special Investigating Unit (SIU) made the situation public when it was discovered that about R5 billion had been improperly given to about 40 000 students.
There are 46 tertiary institutions in the country represented by the students.
According to the SIU, these students come from families who make more than the R350 000 cutoff, and as a result, they “would not qualify for NSFAS funding, based on the funding rules.”
The bursary scheme has since issued a response in light of these recent revelations.
“The National Student Financial Aid Scheme (NSFAS) acknowledges and welcomes the Special Investigating Unit’s (SIU’s) report as presented in the Standing Committee on Public Accounts (SCOPA) sitting held on the 18th of April 2023.
The scheme also included:
“NSFAS welcomes the SIU’s focus on cracking down on those who want to unduly benefit from the scheme. NSFAS is of the view that this will serve as a lesson and deterrent to those who want to unlawfully benefit to the detriment of poor and deserving students.”
In accordance with the SIU investigation, NSFAS failed to develop and put into place procedures to monitor the monies distributed to tertiary schools and the funded list of enrolled students.
Additionally, NSFAS has acknowledged that these students fabricated their applications in order to receive grant approval.
According to NSFAS, from 2017 to 2019, this lack of supervision led to overpayments and underpayments of monies to various institutions.
“The SIU has also identified different scenarios in terms of which students were funded because of overpayments, underpayments, unfunded students, double dipping and dropouts, and the involvement of syndicates in student accommodation.”
Due to the fact that allowances are now being given to students who are not supposed to be eligible for NSFAS financing, there are now too many students to finance, leaving those who do qualify for assistance without the funds they require to pursue and complete their studies.
In line with NSFAS:
“It was prevalent at the time [2017-2019] when schemes could not verify the information through third party source data, such as the Department of Home Affairs and the South African Revenue Services. These verifications have now been embedded in the NSFAS verification process since 2020. ”
NSFAS has already been associated with issues involving financial mismanagement. In reality, poor management caused NSFAS to enter administration in 2018.
Many people became dissatisfied as legitimate beneficiaries were left in limbo while waiting for their allowances to be deposited after it was revealed in 2021 that hundreds of “ghost students” were NSFAS recipients.
Only 40% of the 440 000 abnormal records were examined, according to Carte Blanche, and NSFAS didn’t even know if the students were real. According to the research, these pupils are “ghosts”—students who don’t exist but are nonetheless being paid.
Also in 2021, NSFAS experienced a shortage of funds for first-time entering students, but reportedly had irregular expenditure of over R500 billion.
Due to charges of corruption dating back more than five years, NSFAS was also the subject of an investigation last year.
At the time, the SIU’s investigation was primarily focused on two topics: the administration of NSFAS’s finances and the distribution of loans, bursaries, and any other funds due to students under the NSFAS Act.
The investigation was launched when Sibongile Mani was found guilty of stealing R818,000 out of the R14 million that was mistakenly credited to her in 2017 by the East London Magistrates’ Court in May 2022. At the time, Mani was a student at Walter Sisulu University (WSU).
The SIU noted in reference to this most recent discovery of NSFAS irregularities, “All these implications are because the different governance levels and senior management staff did not fully discharge their duties in terms of all the different applicable legislation.”
The Special Investigating Unit has committed to reclaim every single R1 of the R5 billion that was improperly spent, and so far it has successfully recovered close to R40 million from three different institutions in the Western Cape and Mpumalanga.