NSFAS progress report

Meeting report

Upfront Payment to Universities and TVET Colleges

The Chairperson said the Committee had resolved at the last meeting that they would contact the institutions themselves, and their presentation had been based on the findings of their enquiry. She wanted the National Student Financial Aid Scheme (NSFAS) and other stakeholders present to respond to their findings.

She outlined the challenges experienced by institutions with regard to the payment of the upfront allocations and disbursement of allowances to students. The challenges included:

• Funding decisions for students not being finalised by NSFAS negatively affected students, as they could not receive their allowances.
• Disbursement reports to institutions and remittance advices were not received simultaneously and this posed a challenge for institutions in terms of reconciliations and the allocations to student accounts.
• Late confirmation of students resulted in institutions having to carry the students’ allowances from their own funds until confirmation. Up to date, a number of students remained unconfirmed and the risk remained that NSFAS might not confirm these students and institutions would remain with the debt.
• No quality control mechanism was built into the NSFAS approval model.
• Channel 2 application forms were still not approved, and students were struggling with food and accommodation.
• Universities experienced delays in the disbursement of funds due to the discrepancies that were on the students’ portal and the NSFAS portal.
• Loan Agreement Forms/Schedule of Particulars reports were not accurate, as they did not include all signed students. 
• Due to the 2017-cycle was not being finalised, and many eligible and funded 2017 students receiving their funding only in 2018, NSFAS had not been able to migrate these students to their 2018 funding cycle. These students were not reflected in any funding report, and this caused major challenges for institutions, as well as uncertainty amongst students.
• There was lack of communication and no scheduled time-lines, resulting in unrealistic due dates for data requests, and the integration of data was in essence managed by back and forth uploading of files.

It was concluded that:

• Sources of the challenges had been identified and solutions could be targeted to specific challenges.
• The main challenges raised by the universities and TVET colleges were related to the information technology (IT) systems’ integration and capacity of NSFAS.
• Funding for students living with disabilities had to be fast tracked. These students were not able to study without assistive devices and could not be denied the right to fair chances of success.

The Chairperson said the report was based on responses given by institutions, responding to questions from the Committee. The Committee reserved the right to decide what they did with this information, and any information arising from the current meeting.

Discussion

Mr C Kekana (ANC) said that analysis had to be done to determine what needed to be done to improve the position,

Mr A van der Westhuizen (DA) said that he was sorry to see the blame-shifting in the report. They all needed to work with one another, as they were all in this together. It was clear that timely, consistent communication was of utmost importance. He would like to hear the responses to the report, which should focus on providing solutions to the challenges. The failures had had dire consequences. The biggest issue was the real physical suffering endured by students, as well as the psychological damage suffered by those whose dreams had been shattered and had to go home due to the lack of funding.

Dr B Bozzoli (DA) said she was sure that the Department would respond to the questions, but what was clear was how deep the issues were, and the solution of replacing officials was not going to solve the problem. With past similar situations, the Committee had proposed task teams with specialised individuals to make sure that the existing systems were made to work, rather than creating new ones. What path was the Department and NSFAS working towards in terms of the systemic challenges?

Ms J Kilian (ANC) expressed concern about the responses, and said that no one should feel comfortable about their role in assisting students to fulfill their dreams of completing their studies. Serious scrutiny of where things went wrong needed to be done. There had to be presentations from the other institutions as well -- those that had not responded to the questions posed by the Committee. The Committee had done a lot to call those who were responsible to account. If it was found during the course of the meeting that those who were responsible had failed in their duties, there should be consequences. There was the Powers and Privileges Act, and misleading Parliament was an offence, punishable with fines and prison for those found guilty of misleading Parliament. That message should go out to everybody appearing before a Parliamentary Committee. Facts must be given in order to find appropriate solutions.

Mr N Khubisa (NFP) said that students had reported that they have not received their allowances, and this matter was now in the public domain. It was incumbent upon everyone to find a solution that would be speedily implemented, to prevent more disruptions at the institutions. The aim of the meeting was to find a solution as soon as possible. This matter must not continue being in the public domain, and they must not let students suffer.

The Chairperson said that they would definitely follow up on the institutions that had not yet responded. 

Briefing by National Student Financial Aid Scheme (NSFAS)

A NSFAS board member said the function of the board was oversight and not management, but it had appointed a sub-committee to assist and work with the support team and management. The board felt that its function as an oversight body was being compromised, and that the best way forward was to appoint an administrator.

There were many lessons learnt from 2018 which would ensure a smooth operation for 2019.

The wording in the Act needed to be appropriate. The Act defined NSFAS’s main aim as being to recoup loans, but now they were a full bursary scheme and the Act did not reflect that.

Mr Lerato Nage, Executive Officer (EO), NSFAS, outlined the Chief Executive Officer’s (CEO’s) answers to the questions posed by the Committee (refer to document).

At the last meeting, they had articulated that in 2018 NSFAS was chronically under-staffed and did not have the resources accompanied with the policy pronouncement, which meant that it was always going to crumble in terms of human resource capital. They really welcomed the extra oversight by the board and the assistance by the Department of Higher Education and Training (DHET).

The system built for NSFAS was never built-for-purpose to deliver on its mandate. Hence the establishment of an Exceptions Team to try and make the team work, but it was not sustainable.

The Minister’s decision to appoint an administrator was welcomed. It had always been clear to NSFAS management that there was a “business as usual” effort that needed to be put in place at NSFAS. There had been a transformation change agenda in implementing the bursary programme, and these two running together would assist in getting to the root cause of issues of process systems and people.

There was a lack of capacity to address the growing number of institutions that NSFAS had to cater for. In-grown skills and capacity was lacking, and that had resulted in an improper management system.

At no point had NSFAS misled Parliament. They had always been warned to be honest when briefing Parliament. There were always data integration issues, which was why some institutions had been properly integrated, while there were still challenges with others. One of the biggest mistakes was to go through the third party suppliers, instead of direct integration with the institution. This was a lesson learnt for 2019.

There were challenges with the sBux system, because they would not know who was registered at the institution, and reliance was on the information given to them to make payments. Sometimes there were many judgment-call areas, particularly if no information was available. This meant there could have been many students that should have been paid, but were not. This was a lesson for NSFAS.

Colleges did not pay students timeously, and NSFAS had worked closely with the DHET to address this. They faced this problem due to the fact that NSFAS was no longer going to use the same agreement form of 2017, because that had been based on loans, and it took longer than expected for the new bursary agreement to be formulated. Therefore, institutions had been asked to go and disburse outside of the agreement. They deviated from the norm of disbursing only when the contract had been signed.

There was no well-defined policy and process for students with disabilities. A policy addressing that had since been developed and approved by the Board. A dedicated senior manager had been appointed who would be responsible to deal with students with disabilities.

He gave an overview of the 2017 programme and provided a summary of outstanding activities from 2017. These included assisting the Q1-3 and SA Social Security Agency (SASSA) remaining students who had not signed their contracts, to sign them, and following up on institutions with the highest number of unsigned Loan Agreement Forms/Schedules of Particulars (LAFSOPs) as part of the closing 2017. The University of South Africa (UNISA), the Cape Peninsula University of Technology (CPUT), the University of the Western Cape (UWC), the University of Fort Hare (UFH) and the Central University of Technology (CUT) had the highest number of unsigned LAFSOPs.

Briefing by South African Union of Students (SAUS)

Mr Misheck Mugabe, President of SAUS, said that the meeting occurred at a time when students were protesting due to the issue of allowances. There were a lot of universities currently in protest, and there was a looming national protest because of NSFAS-related issues.

At the University of Venda, students had been arrested because of protests and some students were still attending court cases. The Chairperson was lobbying to propose a call for amnesty at the Department of Justice for students still attending court cases. Free education had been announced by the President, which meant that the protests were justified.

He outlined SAUS’s responses to the questions posed by the Committee (refer to document) and concluded as follows:

• SAUS acknowledges the efforts by the Portfolio Committee to see a smooth process in 2019;
• SAUS was committed to always availing itself for engagement with stakeholders to find amicable solutions to the current problems;
• The Minister had been decisive in handling the current crisis at NSFAS, and that was commendable;
• The new student funding policy being developed would hopefully be a lasting solution to current (and future) challenges;
• It requests the Portfolio Committee to address, in upcoming sessions, identified issues such as the plight of students with disabilities and the issue of safety on campuses.

Briefing by South African Further Education and Training Student Association (SAFETSA)

Mr Yonke Twani, President of SAFETSA, said that the Department needed to be more decisive on the issue of late results, and that decisiveness should reflect in there being consequences if students did not receive their results on time.

He outlined their responses to the questions posed by the Committee (refer to document) and concluded as follows:

• NSFAS must be decentralised;
• NSFAS should be brought closer to the students;
• SAFETSA was willing to work with NSFAS and the DHET to make NSFAS more functional for the benefit of poor students;
• SAFESTA calls for a review of NSFAS’s internal policies and systems to ensure the smooth running of the entity in the best interests of the students;
• There needed to be an urgent review of the funding norms and standards for TVETs, because they were the cause of the inadequate funding that students were subjected to.

Briefing by South African College of Principals Organisation (SACPO)

Mr Sam Zungu, Secretary General of SACPO, outlined their responses to the questions posed by the Committee. They emphasised that the issue of upfront payments did not assist the colleges at all, as there were no disbursement lists provided to institutions to disburse those funds. The Colleges did not know who to disburse the money to, the lists came in very late, and could actually be seen as fiscal dumping.

There should be clearly defined roles and responsibilities addressed by the DHET to NSFAS and the colleges to know what each party was responsible for.

SACPO recommended as follows:

• Clearly defined roles and responsibilities between the DHET, NSFAS and the colleges. If colleges were expected to perform some of the NSFAS functions, then they needed to be capacitated in order to deliver on such a mandate. Colleges would need to be adequately resourced in order to carry out the mandate of disbursing funds to students.
• Improve communications between the DHET, NSFAS, the colleges and students through regular engagements between the parties.
• Invest in improving data management systems through making available additional funding for this purpose – an ICT infrastructure recapitalisation fund. Also improve staffing in colleges that were dedicated to dealing with student affairs matters -- not only limited to financial aid support, but also to academic support in order to ensure that the state saw the value, or return on investment, for public funds invested in these institutions.
• Finalise the college organisational structures and ensure the levelling of the playing field across colleges. Some colleges, for example, had a principal and 5 deputy principals at senior management level, while others had only a principal and three deputy principals.
• Improve both funding and staffing norms for TVET colleges in order to address some of the inadequacies found in the college system.

Briefing by Department of Higher Education and Training (DHET)

Dr Diane Parker, Acting Deputy Director General (DDG), DHET, said that the presentation by the Committee was very aligned to their understanding of the challenges. She outlined the DHET’s responses to the questions posed by the Committee (refer to document).

There had been intensive engagement with NSFAS, Universities South Africa (USAf) and the DHET to try and resolve all the critical problems that had arisen due to the implementation of the new scheme. There were problems of integration of data and the failure of the system was a result of this -- the lack of integration of data by NSFAS and the institutions.

The main challenges they were faced with was the unknown number of students who had not been assisted.

Discussion

Mr Kekana said that NSFAS should increase its capacity by employing more people. The mandate of the administrator was to solve 2017/18 problems so that NSFAS started 2019 with a clean sheet. NSFAS should fill the vacancies quickly so that when the administrator’s terms ended, the vacancies were filled. What was NSFAS’s plan on the process of filling the vacancies?

There were five institutions where protests were taking place, and this was not to suggest that other institutions did not have challenges, but it meant that those institutions were not in a crisis.

Students needed to take advantage of the fact that there were only a few institutions in a crisis, and they should ask the student representative councils (SRCs) to assist and advise in such situations. There was a lot of under-utilised capacity in the institutions. The facilities were there, and the establishment of new offices would not make them more efficient. NSFAS could be de-centralised electronically. Students must be part of the solution and work together with their institutions, as well NSAFS, to improve their lives. He asked the Department of Basic Education how it was going to address the issue of the late release of results.

Ms S Mchunu (ANC) said that it was better if NSFAS opened its system to the colleges and universities. At the moment, the integration was between the institution and the student. That was why they may not know if students were being funded, and it was why NSFAS was sending money with no names attached. NSFAS was in a dire situation, and all their interventions (administrator, etc.) were supported. It must just fill the vacancies to improve capacity.

There needed to be some form of action plan in order to assess progress in mitigating the challenges faced. She agreed with SAUS that municipal offices must be utilised by NSFAS for students, because the offices were accessible, particularly for students in rural areas.

NSFAS had received additional funding to improve capacity -- what had happened to that money, considering that they have so many capacity issues? It was important for even the people working in their offices and administration staff at NSFAS to understand that this was about poor students and improving their lives. There needed to be innovations to make the lives of poor students better.

Mr Van der Westhuizen asked the DHET whether they would hold NSFAS officials accountable for providing unreliable information.

The Bursary Rules and Guidelines document, last published in December 2017, was an important document issued annually by the DHET. The Minister had announced that the document would be reviewed and should be released before 30 September. Was the Department still looking to release it on that date? This was important, because it also informed the budgets for academic institutions for the 2019 financial year. It was highly unacceptable that they had to wait until December for it to be released, which therefore meant the Department was complicit in the bad financial management at institutions, because these institutions were not provided with the information that they needed.

When an institution struggled to just fulfil its primary mandate, it happened that people find gaps and some wrongdoing slips in, because there is no capacity to deal with it. The Minister in 2015 had ordered a forensic investigation to be done. The mandate had been extended, which suggests that some people had been implicated in wrongdoing. The report had been handed to the Department in March this year, and nothing had been said about it since then. He asked whether anything had been learnt from this report, and whether things were being done differently. Had NSFAS adjusted accordingly in terms of this report?

NSFAS did not have the necessary information to respond to his question on the academic performance of NSFAS-funded students. This was disturbing, because the aim was to help students to be academically successful, but it seemed the focus on academic success had been lost.

It was common knowledge that communication was a problem, and that students changed phones and numbers all the time. The NSFAS application process required only one number. Did they have alternative numbers which they could use to follow-up on a student if they could not find them on their cell number? Was the email address the only alternative?

Mr Khubisa said that from the presentations, it was evident that there had been many discussions going on between the stakeholders, but the results had not been forthcoming. However, the presentations had clarified a lot of issues.

The NSFAS EO had stated that the system “was not built for purpose from the beginning.” Having identified that as management, what had they done to ensure that things remained operational?

It had taken a long time for the memorandum of understanding (MOU) to be signed. Why was the MOU not signed, considering it was such an important matter?

He asked why the DHET did not deal with individuals who were not doing their jobs properly.

The Board had been complaining about the ICT issue involving TVET colleges and NSFAS, and this had to be resolved. Most of the issues were related to the centrality of NSFAS and the lack of visibility. They needed to come up with solutions for making NSFAS more visible and accessible. There was a shortage of staff in TVET colleges -- what was being done to resolve this?

Ms Killian said that the information presented by the Department that had made them feel more comfortable about the intervention. She had very serious reservations about the management of NSFAS. In several meetings with them, NSFAS had consistently given the Committee the impression that they had everything under control, that they were not worried about system overload, and that they were ready to roll out free education. However, the numbers in 2017 were actually higher than those in 2018, so their excuse could not be that they were unprepared to roll out fee-free education. There were very serious oversight issues. How could they have operated on a 40% pass rate, when 50% was the required percentage? Many students that were eligible had been declined, yet ineligible students had been funded.

With the new posts, NSFAS was to be grown by more than 80% in terms of the presentation they gave in February. Therefore, the issue of consequence management was not necessarily a number of employees issue, but a management and systems issue. They had done South Africa a very serious disfavour, because some of the hardships experienced by students could have been averted. They could have realised that it was no good centralising and having one office, which had resulted in the disbursements not happening and students finding it difficult to access NSFAS. That had been completely irresponsible.

Going forward, the administrator would have to intervene -- and quickly -- because they could not continue with this long-running saga from 2017 into 2019. How was it not possible for NSFAS management to identify the issues? What was the specific reason for the University of Venda students to have issues over disbursements? Had the VBS mutual bank been contracted as they had suggested, and if so, was that part of the problem?

The NSFAS presentations were difficult to comprehend, and the one they gave in February did not correspond to this one. Without prior knowledge, one could not get a comprehensive understanding of where the problems lay from what they had presented.

Risk management was a central function of any institution -- was there any risk committee operating? Was there any risk assessment done by NSFAS? There must be consequence management for letting students down. It was a relief that there had been direct intervention from the DHET.

Mr R Mavunda (ANC) commented that SAFETSA’s road show would be beneficial for rural learners, as they were trying to assist the students to register. That was the main problem, because there were not enough facilities which were consistent. At times there was no electricity, or the system was offline. The presentations had been good, but the implementation was lacking. When would the Committee see the action plan?

The Chairperson said that the suggestions brought forward had to be collated into a decision-making plan. All the stakeholders had pledged their support to work together, and they all needed to make sure that they made use of this pledge. They had to ensure that the information was available, but also for students to ensure that they registered on time, and that that was all that was required on their side. As a Committee, they would take up the issues that they had brought forward. Some they had already started addressing, such as the gender-based violence issue in institutions.

She said that she trusts that NSFAS and the DHET understand that they were not in the game of impoverishing people. The reason for the funds was to improve the lives of people, and it could not be that they were doing the opposite -- impoverishing them through not funding them, or funding them late. What was needed was the right funding, given to the right student, at the right time. The Committee had had many meetings with NSFAS, and had got the impression that there had been progress until they visited institutions and saw otherwise. Did the Department know when the administrator would come in? NSFAS needed to have blueprint for survival, and could not rely on the administrator. What was the plan going forward, without just waiting on the administrator?

The problem had not started when free education was pronounced. Research from a 2016 report had shown that there was a range of difficulties that had been facing NSFAS for some time, and what had been raised amongst other things was that the mandate needed to be established. Other issues noted had included channels of communication with students; internal and external spaces that NSFAS operated in; partnership problems; ineptitude of the board; and academic eligibility issues. The blame could not be laid on one particular thing -- there was a systemic problem. What was the process that would be put in place to address the systemic issues they faced, and the challenges they faced in implementing it?

It could be concluded that the students had not received their money. What was the timeframe to give students their money? How was it possible that money was being given to the “wrong” students? Whether there was an administrator or not, these were the issues that they needed certainty about, to ensure that they would be resolved. The worry was that next year there would be a higher number of students needing funding. Was it possible for students to apply and receive a response in the same year?

Responses

Department of Higher Education and Training

Dr Parker said that her colleagues from the TVET branch would assist in responding to the questions.

They were in a situation in which an urgent response was required. The administrator would have a team from people from within institutions, including human resources (HR) experts to assist her/him to resolve the issues. The administrator could not, and would not, do the work alone. The team would have to work with everybody. The issue was not just a systemic one, but was an issue as to how the organisation worked. The support team would assist the administrator. When it had assisted NSFAS in 2016, there had been an exponential jump in terms of progress.

With regard to the systemic issue, there needed to be a review as to how the system worked, and that had to be done through an investigation. This would help identify what the long-term solutions were. They had to work together, and it was very encouraging that everybody was keen on working together and cooperating. 

The administrator would be appointed in terms of the NSFAS Act, which would dissolve the Board. However, this did not mean that the management would go away, as the institution still had its staff. The administrator would have to deal with any consequence management that went with it.

The forensic report had been completed, and it had looked across the systems to look at the allegations of mis-spending. The report made recommendations on how to improve systems.

The DHET did not manage NSFAS -- the board did that. The Department just had an oversight role. It did work with NSFAS to identify challenges, and these were not new challenges. Why had the Board and the institution, after the 2016 report findings, make that decision?

The 40% pass rate in higher learning was alarming, and that was why the Minister had had to do the deep-seated review.

Ms Aruna Singh, Chief Director: DHET, said that in terms of the Bursary Rules and Guidelines document for 2018, there had been a consultative process in 2017, and things had got a bit delayed. There was nothing entirely new that would have gone to the colleges in that version. A revised version had been given, following the President’s announcement. The document would be released simultaneously with the Integrated Policy.

South African Union of Students

Mr Mugabe said that were immediate and non-immediate issues. Immediate issues included the starving students due to allowances not being consistent, or not coming. They proposed that students must receive their outstanding allowances by August 30 2018.

It was worrisome that they had to wait for the appointment of the administrator before processes for 2019 began. SAUS proposed that the Committee recommend to the Minister that the applications should start by 3 September 2018, so that students would know this year already whether they had funding for 2019 or not. If the date was agreed upon, SAUS would popularise the date and ensure students applied on time.

Students were still attending court cases, and the Committee needed to lobby the President to call for amnesty on all charges.

The issue of historical debt must be sorted out. A debt-relief fund needed to be established.

Post-graduate students did not receive funding. There needed to be advice given on how to assist post-graduate students.

There needs to be a platform where the third parties (S-bux) were held accountable for their inefficiency.

The Walter Sisulu University student into whose account NSFAS had accidentally transferred R14 million, was attending court cases due to NSFAS’s maladministration. The student needed to be assisted.

The Chairperson said that the Committee could not give an impression that they would break the law. They needed to follow the process of the law and allow the law to take its course. They could not interfere with court processes, due to the separation of powers. The Committee would engage with the issues raised. They had to give the Committee an opportunity to discuss them.

South African College of Principals

Mr Zungu said SANCPO was fully committed to finding solutions, because the aim was to see students progressing and moving forward

SAFETSA

A SAFETSA member said that the historical debt of TVET students should be cleared if the students’ parents or guardians were earning less than the threshold.

There was an urgent need to review the norms and standards for funding for TVET colleges. If one registered for a diploma, there needed to be financial assistance for students until they completed the diploma.

SAFETSA called for equal allowances between universities and TVET colleges, and this could not happen without considering an increase for the allocation of the funding of TVET colleges.

There needed to be an alliance between the Departments of Labour and Home Affairs to assist with the verification of identities, so that the system could pick up when identities were being faked.

Mr Twani said that SAFETSA recommended the standardisation of food allowances needed to be common at both TVET colleges and universities. It did not make sense for university students to get more allowances than TVET students.

Ms Killan stated that that matter was part of the presentation of the Department. The Department would engage with SAFETSA.

National Student Financial Aid Scheme

A NSFAS Board member said that the board was not waiting for the administrator before they attempted to resolve the identified issues. The decision to ask the Minister to appoint an administrator was not a light decision to take. They were working as hard as possible to address all of the outstanding issues, and to materialise what the Chairperson had stated in terms of providing the right funding to the right student at the right time.

The Board had also enquired why the 2018 numbers were lower, and the answer they had received was that the TVET numbers had grown. However, they agreed that the numbers looked strange.

Mr Nage said that they would engage further with the recommendations. NSFAS had a workforce that endeavoured every day to fulfil their mandate. As management, they got a sense that everybody wanted to do well in the institution. A great deal of anxiety was created by the uncertainty, and those were the conditions the staff was working under.

Issues of system failures were a result of processes not being in place. The institution had started to build some of those processes. They had better knowledge of issues since February 2018.

NSFAS had received funds in August 2017, when there was a new cohort that had needed to be funded. That was why the 2017 list had carried on for so long.

The genesis of the issues were decisions made at the meeting in December 2016. Going forward, they would sort out the 13 000 students. 2018 was the year in which to make sure that disbursement happened. The institution was committed to working with the administrator, together with SAUS and SAFETSA.

The Chairperson said that the Committee would be in contact, and would ensure that they engaged with the proposals and issues raised. The key was giving the right funding to the right student at the right time.

The Committee wanted timeframes attached to the plans put in place to solve all of these issues.

The meeting was adjourned.