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BACK
Chairpersons Report
Mr Sipho M Pityana, Chairperson NSFASs central
mission of enhancing access to higher education
for those from previously disadvantaged
communities has featured prominently as the
nation has increased its efforts to accelerate
skills development. ...exponential growth of
NSFAS from an R800 million scheme in 2002/03 to
R1.8 billion in 2007/08. The administrative
capacity of the organisation has not kept pace
with these changes and so staff and systems are
under pressure. Further demands came about
through the introduction of the National Credit
Act (NCA) and changes to financial and audit
practices. Note In 2000, the first year of
operation after the passing of the NSFAS Act, the
awards pool totalled R513 million.
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BACK
The NSFAS Mandate
Mission Statement NSFAS seeks to impact on South
Africas racially skewed student, diploma and
graduate population by PROVIDING A SUSTAINABLE
FINANCIAL AID SCHEME that enables academically
deserving and financially needy students to meet
their own and South Africas development needs.
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BACK
Facts Figures
Racial breakdown of students receiving
loans
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BACK
The NSFAS Mandate

• Agency set up to administer loans and bursaries
• Targets neediest South African students
• Undergraduate education at public Higher
  Education Institutions (HEIs)
• NSFAS Act amended in December 2007 with a new
  mandate Further Education
• Training (FET) Colleges

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BACK
Annual Report

• Purpose of the Annual Report
• To show how public funds were spent
• To demonstrate progress in achieving our goals

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Annual Report

• Highlights in Annual Report
• Unqualified audit from Auditor-General
• Over 113 000 students assisted in 2007 academic
  year
• Loans repaid by recipients of NSFAS funding has
  increased
• - 2007 R479 million

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BACK
Facts Figures
Loan repayments from NSFAS recipients (In R
millions) The NSFAS loan recovery strategy is
yielding positive results. The graph reflects the
increase in monies paid back to NSFAS by former
students.
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Facts Figures
The success of the NSFAS loan recovery strategy
has resulted in the provision for doubtful debt
showing an improvement over the last 5
years
Year Ended Percentage
31 March 2004 38.4
31 March 2005 29.9
31 March 2006 27.4
31 March 2007 22.8
31 March 2008 23.2
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Facts Figures

• Doubtful debt
• Provision for doubtful debt model is contingent
  primarily on two key factors
• loan recovery rate and the mortality rate
• The information provided on death certificates
  is not a reliable indicator of
• mortality rates regarding HIV/Aids

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BACK
Annual Report

• Highlights in Annual Report continued...
• New CEO took office towards end of financial
  year
• Funds in awards pool have steadily increased
  year-on-year with Government
• being the single largest contributor
• First year FET bursaries were made available
• Scarce skills funding increased

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BACK
Annual Report
Student Awards
2007 Academic Year 2006 Academic Year 2005 Academic Year
AWARDS HEIs Number of students 113,616 108,416 106,854
Rands R1,693,299,127 R1,382,430,878 R1,213,469,000

AWARDS FET COLLEGES Number of students 12,283 - -
Rands R 66,719,226 - -
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Annual Report

• General education funding allocations not
  utilised
• R33 million
• NSFAS has put measures in place that require
  Higher Education Institutions (HEIs)
• to account for the drawdown of NSFAS monies
  early on in the academic year
• NSFAS now reallocates funds not utilised by HEIs
  during the academic year
• There will be some funds that will be unutilised
  by HEIs due to receipt of external funding from
  donors later on in the academic year. Such
  funding is normally in
• the form of bursaries

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BACK
Annual Report

• General education funding allocations not
  utilised continued...
• The current mechanisms we regard as interim
  measures
• NSFAS has put forward a proposal to implement
  an IT platform that will improve
• the time taken for the application and
  registration of NSFAS loans, and will
• provide all parties with greater visibility of
  the drawdown of funds during
• registration at universities. The IT platform
  has been reviewed and approved by
• SITA and the Group IT Officer of the Department
  of Education (DoE). The IT
• platform will give us an early opportunity to
  reallocate unutilised funding.

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BACK
Annual Report
Growth in scarce skills funding
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Annual Report
Scarce Skills Funding Each scarce
skills fund brings with it both entry and exit
conditions. The Department of Labour continued
to provide funding for students with
disabilities. Full bursaries totalling R26
million were awarded to students for the year
under review, compared to R32 million in 2006/07.
2007/08 Percentage Increase From Previous Year 2006/07
Department of Agriculture R8 300 000 0 R8 300 000
Department of Education - Teacher (ring-fenced) R66 000 000 2 R65 000 000
Department of Education - NSFAS Partnership with the South African Institute Of Chartered Accountants (SAICA) R14 000 000 17 R12 000 000
Department of Education - Funza Lushaka Teacher Bursaries R120 000 000 100 0
Department of Social Development - Bursaries for Social Work Students R50 000 000 100 0
R258 000 000 203 R85 300 000
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BACK
Report Of The Auditor-General

• Fraud Prevention Plan
• Auditor-General reported this under Other
  Matters.
• NSFAS does have controls and verification
  processes in place, such as
• Internal audit risk and control analysis
• Compliance reviews of NSFAS requirements and
  guidelines at all Higher
• Education Institutions

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Report Of The Auditor-General

• Fraud Prevention Plan continued...
• Planned reviews of management of Department of
  Education funding at FET
• Colleges
• Approved Delegations of Authority
• Procurement policy in place
• The PFMA requirement is for all fraud prevention
  measures to be consolidated into a single
  document the Fraud Prevention Plan. The NSFAS
  Fraud Prevention Plan will be approved by the
  Board before the next audit.

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Report Of The Auditor-General
Performance Information The work done on
Performance Information in the financial year
under review has resulted in an improvement as
seen from this finding moving from Matters of
Emphasis to Other Reporting Responsibilities.
Revised goals (Objectives KPIs Targets)
submitted to Minister of Education on 30
September 2008 for approval.
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Conclusion

• Challenges
• Substantial increase in funds under
  administration has brought severe pressures
• to bear on the manually-intensive system
  employed by NSFAS
• The IT platform referred to earlier will improve
  response times and relieve
• Financial Aid Officers of the administrative
  burden of the NSFAS funding process
• The IT platform will create the space necessary
  for Financial Aid Officers to
• concentrate on the important task of providing
  meaningful advice to students so
• that they understand the funding choices and
  make informed decisions

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Conclusion

• Challenges continued...
• The IT platform in no way replaces Financial Aid
  Officers and the central role
• they play in the administration of NSFAS
  funding
• Pilot of the new system has been successfully
  run at Durban University of
• Technology, and we intend to run a second pilot
  by year end at Tshwane
• University of Technology