27th February 2024 8:14 pm
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Nearly a billion Rand of misplaced NSFAS monies recovered

  • An ongoing investigation into NSFAS has seen the recovery of over R700 million in unallocated student funding.
  • The funding was recovered from institutions like the University of Johannesburg, the University of Pretoria, and others.
  • According to the findings of the investigation, the funds were misplaced due to NSFAS’ failure to implement controls to recoup unused student funding.

Since the Special Investigation Unit (SIU) revealed last year that NSFAS, the government-sponsored university student funding entity, had misplaced nearly R5 billion since 2017 due to “weak” control systems, it has made some impact on recovering these funds from universities across South Africa.

According to the latest statement from the SIU on Thursday, the corruption watchdog says it has now recovered R737 million in “unallocated” funds as part of its investigations into NSFAS.

“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,” the unit explains.

Further, the SIU says its ongoing investigation into NSFAS has revealed that the scheme has “failed to design and implement controls” that ensure there is annual understanding of what funds have been sent to universities, how much of these funds are sent to students, and how much is not used.

Last year NSFAS launched a much-maligned direct payment programme to disburse the funds directly to students and skip the universities and TVET colleges altogether. Four fintech companies were contracted for several billion Rand to digital move the funds from NSFAS to students.

After corruption allegations emerged that the former NSFAS CEO Andile Nongogo onboarded companies he was involved in, the scheme’s board of directors said it would terminate the contracts of the companies. It is unknown if this has been done, but the last information from the companies indicates that the contracts are still ongoing ahead of the 2024 academic year.

So far the University of Johannesburg has represented the single largest amount recovered, sitting at R311.9 million, this is followed by the University of Pretoria at R200 million. The rest of the amount has been received from disparate government varsities and TVET colleges. It includes:

  • West Coast College – R5 057 679.00,
  • Northlink College – R33 369 404.97,
  • Walter Sisulu – R19 900 174.00,
  • Nkangala TVET – R342 672.50,
  • University of Zululand – R58 088 144.65,
  • Majuba TVET College – R25 902 309.31,
  • and the University of Mpumalanga – R33 668 138.56.

NSFAS has told the SIU that its process of recollecting unused funding from universities is still ongoing. A further R49 million is expected to be disbursed to the SIU from the Motheo Technical Vocational Education and Training (TVET) College in the Free State. The funds are expected back after a debt agreement was signed.

As part of their investigation, the SIU also said it found that a company called Celbux – which offers an ewallet payment system used by NSFAS – had R320 million in unallocated funds lying in “dormant” accounts.

While recovering more than R700 million in just over a year is commendable, the SIU still has its work cut out for it if it wants to dent the over R5 billion in lost NSFAS funds still floating around at universities across South Africa.

Luis Monzon

Luis Monzon

Journalist. Covering education, AAA gaming and consumer tech. Reach me at Luis@htxt.co.za.

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