Over 40 000 undeserving students benefitted irregularly from National Student Financial Aid Scheme (NSFAS) funding, the Standing Committee on Public Accounts (SCOPA) heard yesterday.
The Special Investigating Unit (SIU) briefed the committee on the status of its investigations into the NSFAS and told the committee that funding amounting to over R5 billion had been allocated to undeserving students. The Head of the SIU, Adv Andy Mothibi, said the SIU is investigating further to calculate the amounts students fraudulently received. The SIU is also verifying what needs to be paid back to NSFAS and has entered into an acknowledgement of debt with some institutions.
The SIU has identified that institutions are unable to identify fraudulent applications, as the system is not linked with the South African Receiver of Revenue or Home Affairs. In addition, flaws in NSFAS’s IT system is another vulnerability.
The committee also heard that there is a mafia operating in the student accommodation space, and that the NSFAS CEO, Mr Andile Nongogo, received a threatening SMS while he was contemplating changes in the accommodation policy. This threat has now been referred to the security assessment team for further investigation.
Members of the committee asked various questions about fraudulent allowances and the rate of recovery of fraudulent payments. Committee member Mr Nazier Paulsen asked if NSFAS employees were involved in the fraud. “Are we at a stage where NSFAS ensures that applicants who were recipients of social grants have a seamless application [process] for funding should they pursue university education?” he asked.
The committee then heard that some NSFAS applicants’ parents are not registered to pay tax, which poses a challenge when trying to verify their applications with SARS. NSFAS investigators also rely on credit bureaux for information on funding applications. Meanwhile, South African Social Security Agency (SASSA) beneficiaries did not need to apply for funding as the system registers them immediately. Over 70% of NSFAS beneficiaries are SASSA beneficiaries.
The Director General of the Department of Higher Education and Training, Dr Nkosinathi Sishi, told the committee that the department has a good relationship with the SIU. However, a number of departmental officials have been investigated for fraud and some now face criminal charges.
Dr Sishi also said that the current funding model is not sustainable. “The Minister had appointed a panel to look into the funding of students. That work is complete and we are in the final stages of consultation and ready to go to Cabinet. The focus is on the missing middle … looking at the loan system, looking at a wider scope of coverage of those who cannot afford.”
SCOPA also received a status briefing on the pending investigation into the National Skills Fund and heard that a proclamation has been submitted to the President for processing by the Minister of Higher Education and Training, Science and Innovation. Once signed and gazetted, investigations will ensue.
Sibongile Maputi
19 April 2023
Arrange a tour