The National Student Financial Aid Scheme (NSFAS) has declared cumulative irregular expenditure of R7.5 billion in the 2018/19 financial year after reviewing data from previous years, fund administrator Randall Carolissen said in a statement on Wednesday.
“In the previous financial year, the cumulative irregular expenditure was only R303.5 million,” Carolissen said.
“It is important to understand that the cumulative figures to March 2019 and the restatement of cumulative figures to March 2018 result from the determination that the extent of the primary contributors also related to previous years.”
Randall said that several factors contributed to the irregular expenditure, including over payments to students, shifting of earmarked funds and erroneous disbursements.
The statement said that irregular expenditure in the 2018 annual report was R303.5 million, of which R284.7 million was due to the impact of payments in excess of contractual amounts.
“With the implementation of the student-centred model, students are only requested to sign once for the duration of the qualification. The amounts reflected on a number of these contracts were generated incorrectly by the system.
“This resulted in the prior year’s audit qualification, and at the time, NSFAS could not adequately quantify the extent of disbursements in excess of contractual amounts.
“Even though these payments were made in excess of contractual amounts, the amounts paid to students were in line with the amounts as claimed by the respective institutions,” the statement said.
The auditor-general (A-G) found that NSFAS had used funds earmarked for historic debt (2013-2015) without following procedure to get proper approval from national Treasury.
The historic debt fund, which was made available after a report from a presidential task team report in November 2015 was intended to provide short-term debt relief to about 72,000 students who had funding shortfalls between 2013 and 2015.
For various reasons, not all the students utilised this fund and the Board in subsequent years approved the excess to fund shortfalls of registered qualifying and unfunded students in the 2016 and 2017 academic years, and this was done without approval from national Treasury.
The amount disclosed in the current year is R581 million. This amount was utilised before the A-G raised the audit finding in the prior year. The comparative amounts are R73 million and R1.3 billion for the 2017/18 and 2016/17 financial years respectively.
“In the 2018/19 year, NSFAS was issued with a NOCLAR (non-compliance with laws and regulations) notice due to non-compliance with the Public Finance Management Act by the Internal Auditor.
“This was primarily due to the lack of controls over the entire disbursement value chain” and these included payments to students who received funding for courses not covered by NSFAS, as well as disbursements that exceeded the loan or bursary amount awarded.
NSFAS said it was investigating the root causes of these contraventions and would “take appropriate steps in terms of the national Treasury framework on irregular expenditure”.
– African News Agency (ANA); Editing by Naomi Mackay