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Johannesburg - The National Student Financial Aid Scheme (NSFAS) received an unqualified audit in the past financial year, Higher Education Minister Blade Nzimande said on Monday.
"This is an outstanding achievement and vindicates my decision in December 2010 to restructure the board of NSFAS," he told reporters in Johannesburg.
"Much work remains to be done in the current financial year and beyond to improve financial management at NSFAS."
In 2010, the scheme was issued a disclaimer of opinion by the auditor general. The AG found accounting standards related to loan value and interest were not adhered to.
In addition, the scheme could not provide "scientifically compelling evidence" for writing off R589m in interest on outstanding loans.
The scheme was found to have incorrectly calculated interest income of R181m.
Lastly, there was a reconciliation discrepancy of R42m between the scheme's loan management system and its accounting records.
"The work done in 2011 to correct these deficiencies required the NSFAS to recalculate every student loan on its books," Nzimande said.
Through this activity, it was found the scheme overcharged interest on a total of some 34 000 students' loans. An estimated R77.8m had been set aside to refund those students.
Nzimande said a troubling finding was that the scheme had an irregular expenditure of R25.6m.
"This is completely unacceptable in a public entity and corrective action has been taken as part of the turnaround plan."
Nzimande said the future of the scheme would see the financial eligibility criteria widened, especially to include parents in the public sector who earned more than R120 000 but did not qualify for a bank loan.
The scheme would also develop programmes to reduce the number of students who failed or dropped out.
According to reported statistics from the Council for Higher Education, a third of those assisted by NSFAS would drop out, while another third would not complete their degrees on time.
"My department and the NSFAS are in the process of introducing these far-reaching changes... which will see it achieve these goals over the next three years.
The NSFAS is a state agency established in 1999 to offer financial assistance for education to poor students.
It was allocated R5.5bn for 2011/2012. It helped 210 000 people at 23 universities and 50 Further Education and Training colleges in 2010.
