Walter Sisulu University 'bankrupt': Nzimande

Walter Sisulu University is "technically bankrupt" and unable to foot its R68-million monthly salary bill.

Higher Education and Training Minister Blade Nzimande has placed the Mthatha, Eastern Cape institution under administration and directed the administrator to probe whether any of its money has been lost to fraud.

Nzimande told journalists yesterday he had appointed Professor Lourens van Staden, vice-chancellor at Tshwane University of Technology, to take over the running of Walter Sisulu University.

Nzimande said the university had exhausted its R250-million overdraft facility, mainly to pay the salaries of about 2300 employees.

It had a "litany of problems" related to poor financial management, human resources practices, weak information technology systems and poor governance, he said

"As things stand now the university is technically bankrupt, but we believe it can be rescued. The most important thing is to set up systems rapidly so that we are able to close whatever leakages and loopholes are there. It is quite a serious situation," said Nzimande.

He said academic and administration staff were affected by the financial crisis, but assured them they would be paid at the end of this month. This included the university's contributions to medical and pension fund schemes.

Higher Education director-general Gwebs Qonde said banking institutions had promised to bail out the university through loans, pending a guarantee from the government and with stringent conditions.

"The banks came on board to say they are available to assist when they are called upon to do so, and that we welcome," he said.

The bank's conditions included a guarantee that a responsible person would be put in charge of the institution, which is why Van Staden had been appointed as administrator, said Qonde.

He declined to indicate the amount the government had requested from banks.

Van Staden said it was encouraging that the government had moved quickly to assure university staff they would continue to be paid.

This was crucial to the university's turnaround plan.

"The basic thing is to guarantee salaries; hungry people are not people you can engage with," he said.

Nzimande said the terms of reference for Van Staden would include:

• Taking over the authority of the university council for at least two years;
• Taking over its management and steering the university back to operational and financial viability;
• Conducting a forensic audit to identify any corrupt activities and instituting action against corruption; and
• Initiating the appointment of a new council at the university.

Nzimande said financial management at the institution had collapsed to the point where "council sometimes receives three different types of financial statements on the same matters".

"Where there has clearly been failure, we will say so . where there has been corruption, we will act on that without fear or favour," he said.

Although there was no immediate evidence of corruption or fraud, there were worrying signs of financial management lapses at the institution, he said.

"The university has many bank accounts with many different signatories. One needs to focus on whether there has been corruption because this is public money."