SIU recovers R2bn in Nsfas funds – Here’s which university repaid the most

Poor accounting, dubious applications and a lack of oversight has resulted in an abuse of government student funding.

The Special Investigating Unit (SIU) on Friday briefed the Portfolio Committee on Higher Education and Training on the progress of their investigation into irregularities at the National Student Funding Aid Scheme (Nsfas).

The SIU is currently tasked with recovering funds incorrectly paid by Nsfas to universities, TVETs and underserving applicants.

Poor Nsfas accounting

SIU officials revealed that they had recovered R2 billion in funds erroneously paid to universities, while identifying roughly 40 000 improper Nsfas recipients.

Investigators have been across the country auditing the systems, processes and records of universities, then cross referencing their findings with Nsfas records.

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Investigators told the committee that record keeping at Nsfas and tertiary education institutions was poor, especially TVET colleges.

“When you look for data or you look for information, they do not have and they do not know where the information is,” said SIU COO Leonard Lekgetho.

“They can’t succinctly explain how they account for all the funds that come in and how the funds are allocated to the student accounts,” he explained.

Of the 76 institutions on the SIU’s list, they are still due a visit to 12 of them.

Slow pace of reconciliations

Officials explained that there was a lack of synchronisation between entities, which saw Nsfas beneficiaries not registered at universities and enrolled students missing from Nsfas records.

Some of the reasons include administrative failures, Nsfas recipients dropping out without informing either entity and Nsfas recipients changing modules and living arrangements, among others.

Officials explained that once applicants were approved, Nsfas would pay institutions the agreed amount and indicte to the institution which students needed to be credited for what amount.

Once the student profiles were reconciled by Nsfas, institutions would allocate funds to the accounts of students and relay to Nsfas if they were under or over paid.

The SIU found that Nsfas were not reconciling the accounts “timeously”, leading to students receiving multiple or erratic payments.

The accounts were not correctly reconciled for several years, leading to a situation where neither Nsfas nor the institutions knew who was owed what or how much.

Nsfas accounts confusion

Investigators found Nsfas was unable to present a list of its assets and liabilities and did know the value of its debtors or creditors books.

“The control environment is very weak. There a lot of things that happen where they are no policies that direct [processes],” said Lekgetho.

Through this ongoing investigation, the SIU have found roughly 40 000 students across the nine provinces that have received funding improperly.

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Analysis of records show some applicants falsely used the Sassa beneficiary status of relatives, others claimed they only had one parent while having two and others using their friends’ parents employment status in order to meet the qualifying criteria.

To verify this, investigators have had to travel to remote areas of the country to interview those whose names appear as guardians on Nsfas application forms.

In many cases, beneficiaries applied honestly even though they exceeded the criteria, but Nsfas still approved the application.

Those caught applying when exceeding the criteria have been asked to sign acknowledgements of debt (AoD) but SIU officials say that many refuse on the grounds that the should not have to pay for Nsfas’ failures.

Some have signed theses AoDs and so far R449 million worth of monthly payment commitments have been secured.

In cases of fraudulent applications, the SIU says it will refer those matters to the NPA for possible prosecution.

Universities pay back R2 billion

The SIU is aiming to collect R5 billion in improper funds and have so far recovered more than R2 billion.

The bulk has come from universities paying back funds improperly paid over by Nsfas.

Among others, the University of Johannesburg has paid back R311 million, while Wits and the University of Pretoria have returned R450 million and R400 million, respectively.

The University of the Free State reimbursed Nsfas R438 million, while the University of Fort Hare paid back R266 million.  

“This is just a provisional amount, we still need to go back to find out exactly how much they are still owing Nsfas,” said Lekgetho.

“We are not only looking for money that needs to be paid by the institutions, we are also helping Nsfas with what is due back to the institutions,” he added.

Hampering investigations is a lack of data, as highlighted by Celbux, a voucher service provider that distributed Nsfas funds.

The SIU stated Celbux was on the verge of liquidation and does not have data available to show if money given to it was properly distributed.

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