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The Special Investigating Unit (SIU) has recovered R737.9 million from institutions of higher learning, as part of its ongoing investigations into the affairs of the National Student Financial Aid Scheme (Nsfas).
The SIU presented its findings to Parliament’s Standing Committee on Public Accounts (Scopa) on Wednesday.
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According to the SIU, the R737.9 million includes R688.2 million in unallocated funds.
Furthermore, it signed acknowledgement of debt agreements of R49.7 million with Motheo Technical Vocational Education and Training (TVET) College in the Free State, and with parents and students who did not meet the Nsfas funding criteria.
“The unallocated funds are due to poor control systems and a lack of reconciliation processes by Nsfas and were not collected from institutions of higher learning. When approached by the SIU, the institutions cooperated, which led to a quick recovery process.”
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The institutions include:
The SIU told Scopa that Nsfas failed to design and implement controls to ensure that there is an annual reconciliation between the funds disbursed to the institutions and the allocation of those funds to the students.
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“These control weaknesses have led to overpayments and underpayments of funds to the different institutions over the period 2017 to date.”
In response to the crisis, Nsfas appointed a service provider to assist them.
The SIU also found that Celbux – the e-wallet/voucher payment system – had many “dormant” accounts that were active on the Celbux system dating back to 2018, amounting to an estimated value of R320 million.
Nsfas received an adverse audit opinion for the fiscal year 2021/2022 from Auditor-General Tsakani Maluleke.
“The entity did not reliably present assets and liabilities, linked to higher education institutions,
in accordance with GRAP 1, Presentation of financial statements,” said the auditor-general in her findings in December.
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“The entity did not accurately reconcile cost of study records provided by institutions to the entity’s own disbursement records. The cost-of-study amounts used were also not always accurate, as it incorrectly included disbursements made directly to students and it did not include all disbursements to institutions.”
The reported amounts in the statement of financial position did not agree with the reconciliations either.
“Consequently, amounts owing by institutions and amounts due to institutions were overstated. I could not determine the value of these misstatements as it was impracticable to do so.”
During her presentation to Scopa on Wednesday, Maluleke recommended that Nsfas use the appointed service provider to re-quantify its financial loss and recover the money where possible.
Nsfas was also urged to revise and improve existing systems and processes for better functionality and
stakeholder interactions.
Nsfas must also “liase with higher education institutions to facilitate enhanced accountability, co-ordination and co-operation between Nsfas and higher education institutions to enable Nsfas to close off academic cycle reporting timeously”.
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The AGSA governance structure granted Nsfas an extension up to 30 June 2024 for the full implementation of the recommendations on condition that Nsfas submit progress reports on 31 January 2024 and 30 April 2024.
The 31 January 2024 progress report has been received and is under assessment.
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