The National Student Financial Aid Scheme (NSFAS) paid just over R5.1bn to “unqualifying” students between 2018 and 2021.
This was revealed by the Special Investigating Unit (SIU) reporting to parliament’s standing committee on public accounts (Scopa) on Tuesday.
The SIU’s chief national investigations officer Leonard Lekgetho told MPs that 40,044 students in 76 institutions of higher education were “unduly funded” by the state institution.
“These are students whose household income is above R350,000 and therefore would not qualify for NSFAS funding based on the funding rules,” said Lekgetho.
He said the students did not submit their parents’ details upon application and therefore the means test was not properly conducted in order for them to be awarded the bursary.
“We have interviewed several affected students and parents to obtain additional information. Some students admitted that they did not qualify to receive the NSFAS funding. We are looking at the applications to verify who signed them,” he said.
Lekgetho said some students who applied for NSFAS grants used their grandparents’ information or a relative who did not earn enough. He said they also identified cases where officials put through applications even though a student was no longer with the institution.
“There is collusion, of course, because some of these funds are administered at the institution level. We have seen much of this,” he said.
The SIU began investigating NSFAS affairs in September 2022 after a proclamation issued by President Cyril Ramaphosa a month earlier.
The proclamation mandates the SIU to investigate alleged serious maladministration in connection with the affairs of the NSFAS, improper or unlawful conduct by the employees or officials of the scheme, unlawful appropriation or expenditure of public money or property, unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon state property and intentional or negligent loss of public money or damage to public property, among other things.
Lekgetho said they were obtaining further data to calculate the amount received by individual students to be able to see at which point each student did not qualify and to determine the amount each student has to pay back to the scheme.
The SIU is tracing all the students to identify them and interview them, look at the information they provided when they applied for the loan or bursary and the data received from the various government platforms such as Persal, which is about information relating to their parents’ income.
The SIU was also investigating the NSFAS’s financial management systems. This focuses on, among other things, the various IT systems used by NSFAS, including the Cellbux system and the use of vouchers and voucher services.
The investigation will zoom in on identifying flaws and weaknesses including susceptibility to hacking and other abuse and/or risks related to the systems and recommending corrective measures and/or suitable action, he said.
The SIU said its investigation so far showed that the NSFAS failed to design and implement controls that would ensure that there was an annual reconciliation between the funds disbursed to the institutions and the funded list of registered students.
“These control weaknesses led to overpayments and underpayments of funds to the different institutions from 2017 to date, however they have recently appointed a service provider to assist them perform this reconciliation in a process called ‘close out reporting’,” said Lekgetho.
He said the investigation and verification of so-called close out reports and supporting documentation received from the NSFAS has commenced. The exercise comprises the reconciliation of the funds disbursed by NSFAS to institutions with the amounts that were actually due and with a view to calculate and recover potential over-disbursements and amounts due to NSFAS or indicate the amount still owed to the institutions.
NSFAS CEO Andile Nongogo said the scheme confirms (parents') income through the Sars database but acknowledged this had limitations because the exchange of information was not in real time and not every parent was a registered taxpayer.
NSFAS looked at the credit bureaus to access parental information, but even there there were limitations because people tended to inflate their income to get credit.
The SA Social Security Agency’s (Sassa's) data is among the mechanisms the scheme uses to reconcile the income information declared by students in their application forms.
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NSFAS paid R5.1bn to students who did not qualify for a loan
Image: 123RF/Olivier Le Moal
The National Student Financial Aid Scheme (NSFAS) paid just over R5.1bn to “unqualifying” students between 2018 and 2021.
This was revealed by the Special Investigating Unit (SIU) reporting to parliament’s standing committee on public accounts (Scopa) on Tuesday.
The SIU’s chief national investigations officer Leonard Lekgetho told MPs that 40,044 students in 76 institutions of higher education were “unduly funded” by the state institution.
“These are students whose household income is above R350,000 and therefore would not qualify for NSFAS funding based on the funding rules,” said Lekgetho.
He said the students did not submit their parents’ details upon application and therefore the means test was not properly conducted in order for them to be awarded the bursary.
“We have interviewed several affected students and parents to obtain additional information. Some students admitted that they did not qualify to receive the NSFAS funding. We are looking at the applications to verify who signed them,” he said.
Lekgetho said some students who applied for NSFAS grants used their grandparents’ information or a relative who did not earn enough. He said they also identified cases where officials put through applications even though a student was no longer with the institution.
“There is collusion, of course, because some of these funds are administered at the institution level. We have seen much of this,” he said.
The SIU began investigating NSFAS affairs in September 2022 after a proclamation issued by President Cyril Ramaphosa a month earlier.
The proclamation mandates the SIU to investigate alleged serious maladministration in connection with the affairs of the NSFAS, improper or unlawful conduct by the employees or officials of the scheme, unlawful appropriation or expenditure of public money or property, unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon state property and intentional or negligent loss of public money or damage to public property, among other things.
Lekgetho said they were obtaining further data to calculate the amount received by individual students to be able to see at which point each student did not qualify and to determine the amount each student has to pay back to the scheme.
The SIU is tracing all the students to identify them and interview them, look at the information they provided when they applied for the loan or bursary and the data received from the various government platforms such as Persal, which is about information relating to their parents’ income.
The SIU was also investigating the NSFAS’s financial management systems. This focuses on, among other things, the various IT systems used by NSFAS, including the Cellbux system and the use of vouchers and voucher services.
The investigation will zoom in on identifying flaws and weaknesses including susceptibility to hacking and other abuse and/or risks related to the systems and recommending corrective measures and/or suitable action, he said.
The SIU said its investigation so far showed that the NSFAS failed to design and implement controls that would ensure that there was an annual reconciliation between the funds disbursed to the institutions and the funded list of registered students.
“These control weaknesses led to overpayments and underpayments of funds to the different institutions from 2017 to date, however they have recently appointed a service provider to assist them perform this reconciliation in a process called ‘close out reporting’,” said Lekgetho.
He said the investigation and verification of so-called close out reports and supporting documentation received from the NSFAS has commenced. The exercise comprises the reconciliation of the funds disbursed by NSFAS to institutions with the amounts that were actually due and with a view to calculate and recover potential over-disbursements and amounts due to NSFAS or indicate the amount still owed to the institutions.
NSFAS CEO Andile Nongogo said the scheme confirms (parents') income through the Sars database but acknowledged this had limitations because the exchange of information was not in real time and not every parent was a registered taxpayer.
NSFAS looked at the credit bureaus to access parental information, but even there there were limitations because people tended to inflate their income to get credit.
The SA Social Security Agency’s (Sassa's) data is among the mechanisms the scheme uses to reconcile the income information declared by students in their application forms.
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