Nsfas losing over R21 million a year to corruption.

Nsfas losing over R21 million a year to corruption. Photo: GCIS / Flickr.

Corruption drains Nsfas of over R21 million annually

Since 2017, the National Student Financial Aid Scheme (Nsfas) has suffered losses exceeding R128.5 million due to fraud and mismanagement.

Nsfas losing over R21 million a year to corruption.

Nsfas losing over R21 million a year to corruption. Photo: GCIS / Flickr.

Blade Nzimande, the Minister of Higher Education, has disclosed that the National Student Financial Aid Scheme (Nsfas) is losing more than R21 million annually to corruption.

Corruption drains Nsfas funds annually

The scheme has faced numerous challenges, such as delays in disbursing student payments and inadequate provision of suitable accommodations.

According to The Citizen, last year, CEO Andile Nongongo was dismissed amid accusations of corruption related to the direct payment system.

Earlier this month, Minister Nzimande dissolved the board due to allegations of mismanagement.

In response to a recent inquiry in parliament, Nzimande disclosed that approximately R21,446,855 had been lost to fraud and/or mismanagement each year since 2017.

The cumulative amount lost since 2017 now exceeds R128.5 million. 

Although there have been assurances to address corruption within the scheme and despite referring 14 cases to the police, Nzimande acknowledged that no stolen funds had been recovered thus far.

“None of the funds have been recovered. Some of these matters are still being investigated by law enforcement agencies,” Nzimande said.

The previous year, the South African Union of Students (SAUS) issued a warning indicating the scheme was teetering on the edge of collapse. 

Asive Dlaniwa, a spokesperson, remarked that the scheme was essentially running on autopilot and was neglecting the needs of students, ultimately failing to fulfil its purpose.

The Independent Institute of Education (IIE) recently advocated for universities to assume control of the troubled scheme.

“The fact is that the corruption within Nsfas is so endemic and structural that changes to the board will accomplish nothing. The issues are deeply embedded in the organisation’s procedures, culture, and perhaps even its informal norms and practices.

“Nsfas transformation requires more than cosmetic changes. It demands a commitment to transparency. A willingness to confront corruption head-on. And the establishment of robust systems,” managing director Dr Linda Meyer said.

SIU launches probe into alleged corruption and mismanagement at NSFAS

Following allegations raised by a whistle-blower, the Special Investigating Unit (SIU) is now looking into accusations of corruption and mismanagement at the National Student Financial Aid Scheme (NSFAS).

After President Cyril Ramaphosa proclaimed in August 2022 granting authority, the Special Investigating Unit (SIU) is now empowered to investigate the management of NSFAS finances, including the allocation of loans, bursaries, and any other funding intended for students.

“The process that we follow is very simple. We get allegations, and we got them some time back, and then we assess them. When we are happy, we send that to the president as a proclamation,” said SIU spokesperson Kaizer Kganyago.

“We cannot mention where it comes from for the protection of that whistle-blower.”

According to IOL, Kganyago stated that the duration of the investigation would be contingent upon the documentation received.

“Our teams will start trying to get information, and that will determine the scope and how long the investigation will be.”

The SIU will additionally investigate any associated unauthorised, irregular, or fruitless and wasteful expenditure accrued by NSFAS or the state, including identifying the underlying causes.

According to TimesLive, President Cyril Ramaphosa authorized the probe, empowering the SIU to recover any financial losses incurred by the state due to corruption and negligence at NSFAS, as outlined in Proclamation R.88 of 2022.