Investigation finds students made R5bn in fraudulent Nsfas claims

National higher education bursar Nsfas will rescind funding to thousands of students after a recent investigation found it was erroneously awarded.

From 2017 to 2021, R5 106 561 573 went to students who did not qualify, a preliminary SIU investigation showed early in April.

The bursar will now act on the findings, it said on Monday, July 10.

Currently, the scheme funds 1.1 million students from 604 114 in 2018, an 82% growth.

Nsfas spokesperson Slumezi Skosana said the bursar will act on the findings of the Auditor General, its internal compliance processes and the observations of the SIU (special investigation unit).

“Nsfas has initiated a remedial process where a student found to have been funded based on incorrect information is defunded instantly.

“This is done to avoid wrongful and illegal allocation of funds to students who fall outside the prescription of our policies.

“Prescriptions of our policies and the law will be implemented firmly and vigorously to avoid, among others, a repeat of the more than R5-billion that was allocated incorrectly to students.”

According to Skosana, the incorrect allocations started in 2016.

He said remedial action was being imposed but Nsfas was receiving complaints that some students were defunded incorrectly.

“If such cases are true, this is regrettable. A process of verifying these complaints will be immediately initiated and if proven otherwise, remedial action will be taken.”

He said the Nsfas board and management remained committed to a student-centred model in which the main focus would be the creation of an environment for the students to engage in academic activities.

He said Nsfas would proceed with implementing new policy decisions in a manner that was firm, legal and within the dictates of its policies.

“We are happy that a majority of our funded students are happy with our services and that the scheme has made funding available for the children of the poor and the working class.”

The defunding follows a SIU investigation alleging that students had allegedly misrepresented their household income to access funding they would ordinarily be ineligible for, thus defrauding the state.

The unit revealed this to parliament’s standing committee on public accounts (Scopa) on April 18.

The highest number of institutions and students involved is from Gauteng. Here are the findings:

– 15 institutions, involving 17 788 students in Gauteng claimed R1 992 784 618

– 13 institutions, involving 4 409 students in KwaZulu-Natal claimed R607 041 637

– 12 institutions, involving 3 842 students in Eastern Cape claimed R597 792 612

– 10 institutions, involving 5 481 students in Free State claimed R787 537 829

– 9 institutions, involving 2 291 students in Limpopo claimed R282 357 730

SIU spokesperson Kaizer Kganyago said according to the investigation, the recipients of funding were students whose household income was above R350 000.

“They therefore would not qualify for Nsfas funding based on the rules. These students did not submit their parent’s details upon application and therefore the means test was not properly conducted.”

Kganyago said the investigation found 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 list of registered funded students.

“This control weakness led to overpayments and underpayments of funds to the different institutions from 2017 to date. To remedy this, Nsfas recently appointed a service provider to assist this reconciliation in a process called close-out reporting.”

Kganyago said other irregularities the unit uncovered were overpayments, underpayments, double dipping and funded dropouts as well as the involvement of syndicates in student accommodation.

“All these implications are because the different governance levels and senior management did not fully discharge their duties in terms of all the different applicable legislation,” he said.

South African students congress (Sasco) president Vezinhlanhla Simelane said the congress was outraged at how the scheme failed to deliver on its mandate to fund students of the poor and working class.

“The leadership of Sasco expressed its unequivocal rejection of the defunding of students.”

He claimed that Nsfas did not provide students wrongfully identified for defunding an opportunity to prove they were eligible.

“We know that thousands of students were wrongfully defunded, and to this end Nsfas committed to reaching out to all defunded students, to allow them to make their cases and challenge the decision.”

He called on all student representative councils to mobilise and take the “necessary action, including but not limited to mass action” concerning grievances with Nsfas.

Three busted for drugs and cell phone tower materials after high-speed chase

Do you have more information about the story?

Please send us an email to editorial@rekord.co.za or phone us on 083 625 4114.

For free breaking and community news, visit Rekord’s websites: Rekord East

For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram