An estimated R320 million intended for student support remains dormant in accounts linked to NSFAS’s discontinued Celbux voucher payment system, with the SIU revealing that some institutions are refusing to repay the funds because they are owed money by the financial aid scheme.
Image: Ayanda Ndamane | File
An estimated R320 million intended to support students has been lying dormant in accounts linked to the National Student Financial Aid Scheme (NSFAS) now-discontinued Celbux voucher payment system.
The Special Investigating Unit (SIU) says some higher education institutions are refusing to repay the money, arguing that the NSFAS owes them outstanding amounts for previous academic years.
The findings are contained in an SIU presentation to Parliament’s Standing Committee on Higher Education recently, where the investigative body provided an update on key investigations into dysfunction at the financial aid scheme.
The SIU told the committee that it had received 14 proclamations to investigate matters within the higher education portfolio between 2017 and 2025. Eight of these investigations have been finalised, while six remain under way.
One of the most significant findings relates to NSFAS’s direct payment system, through which student allowances are paid directly into beneficiaries’ bank accounts.
The SIU found that NSFAS had acted “contrary to its own prescripts and in contravention of section 217(1) of the Constitution” when it awarded five-year contracts to four service providers – Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporation – to administer these payments.
In June, the Western Cape High Court declared NSFAS’s decision to appoint the four service providers unconstitutional and invalid. The court, however, determined that, while the procurement process was flawed, the appointed service providers were not complicit in any maladministration, impropriety, or corruption.
The SIU also raised concerns about the former Celbux voucher payment system, which was discontinued in 2022 when NSFAS moved to direct payments to students.
According to the SIU, numerous “dormant” accounts dating back to 2018 remain active on the Celbux system, with a combined estimated value of R320 million.
The Celbux system used vouchers generated against the cellphone numbers of registered students to facilitate payments.
The SIU said it had so far visited 58 institutions across all nine provinces. Most of the institutions visited were aware that they had credit balances that would have to be repaid to NSFAS once the close-out process had been completed and signed off. However, the SIU said it had encountered resistance from some institutions.
“Some institutions are adamant that they are not willing to repay the money to NSFAS as they are owed for some academic years,” the report states.
This comes as NSFAS is estimated to owe higher education institutions R10.4 billion in outstanding fees, according to an update provided to Parliament’s Portfolio Committee on Higher Education earlier this month.
The SIU said institutions had been instructed to repay a portion of the credit balances owed to NSFAS while disputes involving missing students were being resolved.
“Institutions that have deposited the monies in an interest-bearing bank account are advised to repay all credits with interest earned on those balances,” the report states.
The SIU has also found that more than 40,000 students across 76 higher education institutions were improperly funded, at an estimated cost of R5.1 billion.
South African Union of Students (Saus) spokesperson Dr Thato Masekoa said the findings were deeply concerning.
“The R5.1 billion in improper funding, dormant student allowance accounts, institutional overpayments, weak accommodation controls, and procurement irregularities point to systemic failures that cannot simply be treated as accounting problems.
“They speak directly to the governance, accountability and integrity of the student funding system.”
Masekoa said accountability should nevertheless be fairly and properly directed, arguing that students should not bear the consequences of failures within the NSFAS system.
“At the same time, SAUS believes accountability must be fair, evidence-based and properly directed. Students who were improperly funded because of failures in NSFAS systems and controls should not automatically become the victims of institutional failures they did not cause.
“The billions being recovered must ultimately translate into better systems, faster disbursements, stronger controls and greater support for students who genuinely qualify for funding.
“We need a NSFAS that is transparent, technologically robust, properly governed and capable of protecting every rand intended for student success,” he said.
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