SIU’s chief national investigations officer, Leonard Lekgetho, revealed preliminary investigations show more than R5 billion in NSFAS funds were possibly assigned to students nationwide who did not qualify for funding.

The students in questions are those whose household income is above R350 000 and therefore would not qualify for NSFAS funding based on funding rules.

It is understood these students did not submit their parent's details upon application and therefore the means test was not properly conducted.

Lekgetho explained before the Parliament’s Standing Committee on Public Accounts (SCOPA) on Tuesday that there are over 40 000 students at 76 institutions of higher education who have possibly been funded incorrectly. He stated some students at some institutions have been overfunded, while some were underfunded. It was revealed before the Committee that the Scheme has also been paying for ghost students; some are dropouts.

The SIU has facilitated a refund of at least R38.8 million during the pilot investigation from three institutions; two in Western Cape and one from Mpumalanga. It is explained that the unit is in the process of engaging other institutions to determine if there are holding any overpayments that need to be ring fenced pending the finalisation of the investigation.

The Northern Cape has the least institutions (3) and students (304) which were possibly funded incorrectly by the Scheme; followed by Mpumalanga with 4 institutions and 666 students; North West with 4 institutions and  2575 students; Free State with 6 institutions and 2688 students; Limpopo has 9 institutions and 2291 students; Western Cape - 10 institutions with 5481; Eastern Cape has 12 institutions with 3842 students; KwaZulu Natal has 13 institutions and 4409 students; and Gauteng is leading with 15 institutions and 17788 students.

The investigation will cover the period between April 2016 and August 2022; however, it may also include any period relevant to the investigation. It is estimated that it will take 18 months to be concluded and will cost around R70 million. The chief national investigations officer also explained that 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. This control weakness led to overpayments and underpayments of funds to the different institutions for the period 2017 to date. He made mention that some of the students were funded without submitting the required documents, such as parents’ details.

The investigation into the Scheme by the Unit was greenlit by President Cyril Ramaphosa during August 2022. The purpose is to investigate allegations of corruption and maladministration at NSFAS. At the time, SIU spokesperson, Kaizer Kganyago, said the investigation will delve into two functions of the organization.

“The first part will investigate the management of NSFAS finances. The second part will investigate the allocation of loans, bursaries, and any other funding payable to students in terms of the provisions of the National Student Financial Aid Scheme Act, 1999, Act No. 56 of 1999.”

“Furthermore, the SIU will also investigate related unauthorised, irregular or fruitless and wasteful expenditure incurred by the NSFAS or the State, including the causes of maladministration,” he said. Kganyago added that the SIU will also seek to recover any monies lost by the state as a result of any wrongful actions at NSFAS.

The SIU is empowered to institute civil action in the High Court, or a Special Tribunal in its name, to correct any wrongdoing uncovered during both investigations caused by acts of corruption, fraud, or maladministration. In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU will refer any evidence pointing to criminal conduct it uncovers to the National Prosecuting Authority (NPA) for further action.

OFM News