Motheo TVET College Agrees to Repay Millions to NSFAS for Unallocated Funds. The National Student Financial Aid Scheme (NSFAS) plays a pivotal role in supporting financially disadvantaged students in their pursuit of higher education. However, recent investigations by the Special Investigating Unit (SIU) have uncovered potential misappropriation of NSFAS funds. This article sheds light on Motheo TVET College’s commitment to repay NSFAS millions in unallocated funds.
Motheo TVET College Acknowledgement of Debt (AoD)
The SIU has unveiled that Motheo TVET College has officially signed an Acknowledgement of Debt (AoD) for a substantial sum, exceeding R38 million. These funds were originally intended to support economically vulnerable students who had been granted NSFAS bursaries.
NSFAS Vital Role
NSFAS is instrumental in financing the education of over one million students currently enrolled in public universities and Technical and Vocational Education and Training (TVET) colleges. The organization covers tuition and registration fees, in addition to providing financial support through student allowances.
Change in Funding Distribution
Historically, NSFAS used to allocate funds directly to institutions, which would then distribute the money to eligible students.
Motheo TVET College Commitment to Repay
Motheo TVET College has undertaken to reimburse NSFAS with a total of R38,686,477.10. These funds, initially allocated for students between 2017 and 2022, remained unutilized due to students changing institutions or deregistering. While these unspent funds should have been returned to NSFAS, this did not transpire, compelling the college to repay the sum over a span of five years.
Unallocated Funds and Their Origin
Unallocated funds represent money earmarked for students who qualified for funding but later altered their educational path or deregistered. These funds were retained by the institution for a year, with the expectation that they would ultimately be returned to NSFAS.
Motheo TVET College has committed to repaying NSFAS over 60 months, with monthly installments of R855,679.91. This marks the first Acknowledgement of Debt (AoD) that the SIU has entered into with a higher education institution during its investigation.
Presidential Authorization for SIU Investigation
In 2022, President Cyril Ramaphosa issued a proclamation granting the SIU the authority to investigate NSFAS operations spanning from 2016 to August 2022. The investigation has revealed instances of inappropriate spending amounting to R5 billion and colleges investing funds that were originally designated for return to NSFAS.
SIU Mandate and Recoveries
Under Proclamation R88 of 2022, the SIU is empowered to investigate allegations of corruption and maladministration within NSFAS, as well as recover any financial losses incurred by the State due to corruption and negligence. The SIU is encouraging other higher education institutions to refund unallocated NSFAS funds. To date, they have successfully recovered over R421.3 million from various institutions.
Call to Action and Legal Consequences
The SIU emphasizes the importance of institutions of higher learning coming forward to repay unallocated NSFAS funds. Furthermore, they assert their commitment to referring evidence of criminal conduct uncovered during their investigations to the National Prosecuting Authority (NPA) for further legal action.
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