The investigation found that Nsfas had failed to properly verify the financial eligibility of students before funding them, leading to what the Public Protector described as a breakdown in governance and financial controls at the scheme.
A Breakdown in Governance
The Public Protector's report criticised Nsfas for failing to implement proper verification processes for student funding applications, resulting in the improper allocation of funds to students who may not have qualified for support. The investigation found that Nsfas did not conduct adequate checks on applicants' household income, academic eligibility or other qualifying criteria.
The R5.1 billion in improper funding represents a significant portion of Nsfas's annual budget, raising questions about whether the scheme has the capacity to properly manage the billions of rand allocated to it each year. The investigation also found that Nsfas failed to recover funds from students who were incorrectly funded, allowing the financial losses to accumulate over time.
The Public Protector said the findings pointed to a systemic failure at Nsfas rather than isolated incidents of mismanagement. The scheme has faced persistent challenges with funding allocations, student payments and governance.
Minister Ordered to Act
Manamela has been ordered to submit a plan for corrective action by November 1, detailing how the Department of Higher Education and Training will address the governance and financial control failures identified in the investigation.
The Public Protector also ordered Nsfas to strengthen its verification processes and implement measures to prevent similar improper funding in the future.
The order comes as the Nsfas board has welcomed a High Court ruling suspending the appointment of the scheme's administrator, with the court directing that former board members be reinstated pending the final determination of a review application. Manamela previously placed the entity under administration and dissolved the board, but the remaining board members sought urgent High Court relief.
Broader Context
The investigation findings come at a time of heightened scrutiny of Nsfas, with the scheme facing persistent challenges with funding allocations, governance and student payments. The R5.1 billion in improper funding will likely increase pressure on the government to reform how student funding is managed.
Nsfas has been a critical component of South Africa's higher education system, providing funding to students from poor and working-class backgrounds since its establishment. However, the scheme has faced persistent challenges with funding allocations, governance and student payments.
With reporting from The Witness, eNCA, EWN and TimesLIVE.
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