SIU recovers R349.3m in unallocated NSFAS funds

  • In its ongoing investigation into NSFAS, the SIU has recovered nearly R350 million in unallocated funds from “institutions of higher learning”.
  • The largest payment comes from UJ which paid R300 million in funds that weren’t allocated between 2016 and 2021.
  • Unallocated funds are meant to remain with the institution for a year before being returned to NSFAS but the scheme lacked the systems needed to recoup those funds.

Each year the National Student Financial Aid Scheme (NSFAS) allocates funds to universities for students who qualify for financial assistance. Sometimes, for example, when a student changes institutions or doesn’t start the course these funds aren’t allocated to the student.

These funds are then meant to be returned to NSFAS but that seemingly hasn’t been happening.

Anti-corruption task force, the Special Investigating Unit (SIU) this week announced that it has recovered as much as R349.3 million in unallocated funds from “institutions of higher learning”. This forms part of an investigation that the SIU has been running since September 2022. The largest portion of these funds has been received from the University of Johannesburg (UJ) which hasn’t returned funds from 2016 up to 2021.

“The monies paid by UJ are unallocated funds from 2016 to 2021. The unallocated funds are monies that were for students who qualified for funding but either changed institutions or deregistered. The funds stay in the possession of the institution for a year,” the SIU wrote in a statement.

Why did UJ manage to hold on to over R300 million for six years? The SIU’s investigation found that “NSFAS failed to design and implement controls that would ensure that there is an annual reconciliation between the funds disbursed to the institutions and the funded list of registered students.”

To address this shortcoming, NSFAS has told the SIU it will appoint a service provider to assist in the reconciliation of unallocated funds.

This is just the latest misstep uncovered by the SIU. In April the task force found that NSFAS incorrectly funded as many as 40 000 students to the cost of R5 billion.

That same mistake is the reason NSFAS has now received a R300 million pay cheque from UJ.

While the SIU is empowered to institute civil action in the High Court or a Special Tribunal, it has yet to take that action.

This is, however, further evidence that something needs to be done to right the ship at NSFAS. The institution is of utmost importance for students who are roadblocked simply because they don’t have access to funding. The scheme claims to have helped 38 million students since it was established in 1991 and it would be a shame if it wasn’t able to help more because of mismanagement.


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