The National Student Financial Aid Scheme (NSFAS) does not possess credible student data and is vulnerable to cyber attacks.
This was the admission of NSFAS administrator Freeman Nomvalo, appearing yesterday before Parliament’s Portfolio Committee on Higher Education and Training.
The executive of the student scheme briefed the Parliamentary committee on this year’s student funding, progress in resolving payments for private accommodation and resolving outstanding student appeals, with the administrator detailing the entity’s troubles.
The portfolio committee welcomed the administrator’s admission, recommending NSFAS must “strengthen its ICT systems as a matter of urgency to curb student data falling into the wrong hands”.
This is in line with the auditor-general’s recommendations at the end of the sixth government administration that the scheme’s finance unit and ICT departments must be capacitated, while control weaknesses must be addressed.
Committee chairperson Tebogo Letsie further advised the higher education department to undertake a forensic investigation of the National Treasury funds that were originally given to NSFAS to improve its ICT systems.
Should the forensic investigation show money was siphoned from the entity, then people must be charged criminally, he stated.
“We are going to conduct oversight over NSFAS until things turn around, and going forward, the committee will need to be provided with a monthly report on what the scheme is doing with appeals, payment of student accommodation and allowances.
“NSFAS cannot claim to not have enough money in its administrative budget to hire staff to solve students’ problems, while at the same time renting a building at a cost of around R2 million a month.”
An entity of the Department of Higher Education and Training, NSFAS runs a close to R50 billion annual budget, providing financial aid to eligible students at TVET colleges and public universities.
However, the entity is beleaguered by governance issues, including IT system failures and mismanagement, with the latest being the “undue” selection process of four fintech providers to disburse monthly allowances to tertiary students.
In its 33-year history, NSFAS has supported more than five million beneficiaries.
Between 2019 and 2022, NSFAS disbursed R122 billion to over 2.9 million beneficiary applicants, it was revealed during the committee meeting. For TVET colleges, the figure stands at R35 billion for 1.1 million applicants, while disbursements for universities was R87 billion to 1.8 million applicants.
Challenges with business processes, IT systems, capacity and controls have been said to negatively impact the well-being of students and cause serious reputational damage to NSFAS.
Given these challenges, the entity’s board was dissolved with immediate effect in April, resulting in the organisation being placed under administration. Former SA accountant-general Nomvalo was appointed as the administrator.
Nomvalo is tasked with taking over the governance, management and administration of NSFAS for 12 months, depending on progress made.
Furthermore, his task involves resolving the data integration challenges as a matter of urgency, finalising all the necessary funding decisions and outstanding payments, including student accommodation, and overseeing the opening of the 2025 online applications process.
The administrator revealed NSFAS has made payments totalling R1.6 billion in private student accommodation at the pilot institutions. Of this amount, R311 million was paid to NSFAS-accredited TVET college accommodation providers and R1.3 billion to NSFAS-accredited university accommodation providers.
NSFAS said: “Some of the private accommodations are not offering suitable accommodation, especially in rural areas, and some students enter unfavourable contracts with landlords. On student appeals, 94 469 appeals were received and 63% were resolved, while 35 226 appeals remain unresolved but will be finalised by the first week in September.”
Parliament’s Portfolio Committee on Higher Education and Training has welcomed interventions, which include setting up task teams for engagements around student accommodation with landlords being part of the process across the country to mitigate against possible risks of instability.
It recommended there be a skills audit at NSFAS, in an effort to assist in dealing with identifying unsuitable employees that contribute to creating a chain reaction that ultimately inconveniences students.
The committee also called for the finalisation of the recruitment of critical posts at NSFAS, especially that of chief internal auditor, as a matter of urgency.
According to NSFAS, plans to fill critical positions, such as chief financial officer and chief internal auditor, are in the works, with the recruitment process close to finalisation.
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