SIU recovers close to R1bn in unallocated NSFAS funds from tertiary institutions

The Special Investigating Unit (SIU) has confirmed that close to R1 billion of unallocated funds has been paid back to the National Student Financial Aid Scheme (NSFAS) by institutions of higher learning to date.

University of Pretoria (UP) has just paid, in full R400 million that was due to NSFAS, the highest debt settled of all the other institutions. The money was paid in four instalments of R100 million into the SIU’s trust account. These were unallocated funds during 2016-2021 for students who qualified for funding but either changed institutions or deregistered. Such funds stay in the possession of an institution for a year.

According to the SIU, unallocated funds are direct result of poor control systems and lack of reconciliation processes by NSFAS to collect funds from institutions. However, when the SIU approached institutions, they cooperated, which led to a quick recovery process.

So far, the SIU has recovered the following funds from institutions:

• 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 Johannesburg – R311 892 088,94
• University of Zululand – R58 088 144,65
• University of Pretoria – R400 000 000,00
• Majuba TVET College – R25 902 309,31
• University of Mpumalanga -R33 668 138,56

Recovered funds from institutions since the inception of the SIU’s NSFAS investigation in September 2022 reach a total of R 937 926 351.

The SIU has also signed an acknowledgement of debt (AoD) agreement of R38 707 884,10 with Motheo TVET College in the Free State. SIU further signed other AoDs worth R10 997 855,50 with parents and students who did not meet the NSFAS funding criteria.

These control weaknesses have led to overpayments and underpayments of funds to the different institutions over the period 2017 to date. NSFAS has recently appointed a service provider to assist them in performing this reconciliation via a process called “close-out reporting”.

The reconciliation process is still ongoing.

The SIU discovered numerous active “dormant” accounts on the Celbux system (an e-wallet/voucher payment system) dating back to 2018 with an estimated worth of R320 million. Information on accommodations funded by NSFAS, including physical addresses and landlord/owner’s details, was missing from the NSFAS system. The NSFAS did not verify the physical addresses of the lodgings nor the landlords.

The SIU is in terms of Proclamation R88 of 2022 authorised to investigate allegations of corruption and maladministration in the affairs of NSFAS and to recover financial losses suffered by the state through corruption and negligence.