ICT has emerged as the biggest operational risk facing the National Student Financial Aid Scheme (NSFAS).
Administrator, professor Hlengani Mathebula, warns that outdated and fragmented technology systems are undermining funding administration, payments and student services.
Mathebula made the remarks as he submitted the NSFAS administration’s stabilisation plan to higher education and training minister Buti Manamela this week, outlining a roadmap to restore governance, strengthen operational controls and address systemic failures at the embattled student funding agency.
The submission, made in line with the relevant Government Gazette requirements, was presented in the presence of the deputy ministers, director-general, deputy directors-general and ministerial advisers.
In May, Manamela placed NSFAS under administration, citing governance instability within the institution.
Additional reasons for the move include delays in ICT modernisation and systems integration, data integrity concerns, and unresolved student appeals caused substantially by system deficiencies and weaknesses in consequence-management.
“ICT is NSFAS’s biggest operational risk, as it is fragmented, manual and not fit for purpose. It holds everything up, to peak frustration of students and partners, including institutions,” stated Mathebula.
Data analytics drive
He said the administration is prioritising data analytics initiatives aimed at improving funding accuracy, payment reliability, fraud prevention, audit readiness and student service outcomes.
The stabilisation plan identifies ICT, governance, audit and consequence management, data integrity and analytics, student support, appeals, TVET colleges, reconciliation, student accommodation and stakeholder confidence as the organisation's top priorities.
Mathebula said the plan was developed jointly by the administration and NSFAS management to ensure reforms continue beyond the administration's fixed term.
“Co-creation is the only path for my administration, as our tenure is only for a specified period. This means that management and staff must have enough acumen to lead NSFAS post our time.”
He explained that the turnaround strategy would follow a practical, phased and evidence-based approach focused on implementation rather than prolonged assessment.
The administrator said dedicated workstreams have been established to drive execution across the organisation, with each responsible for addressing specific operational risks and implementing corrective actions.
“The top priorities include governance, audit and consequence management, information and communications technology (ICT), data integrity and analytics, student support, appeals and fair access, TVET colleges, reconciliation, student accommodation and stakeholder confidence. This state of our organisation is parlous, which has facilitated selfish interest to take root.
“Therefore, my administration’s decisive actions against the rot have provoked spirited opposition from those whose interest is being threatened. We have witnessed an emergence of media attacks which are fuelled by the so-called internal sources who are unfortunately manipulating the sacred journalistic tradition to drive their own agendas of looting the resources earmarked for our children,” Mathebula said.
Governance probe
He added that president Cyril Ramaphosa's decision to involve the Special Investigating Unit (SIU) recognised the extent of governance failures within NSFAS, including weakened supply chain management controls and diminished internal audit capacity.
“NSFAS has 66 major audit findings with a disclaimer audit opinion from the Auditor-General and 115 overdue internal audit findings, respectively. Special Investigation Unit findings are a matter of public record.
“There are nine material irregularities: deceased funding, income threshold breaches, academic progression ignored, duplicate grant payouts, unresolved appeals, procurement and tender maladministration, data verification breakdowns, accommodation contract breaches, accommodation contract breaches and weak consequence management,” he said.
“Student accommodation has also been identified as a high-risk area, both operationally and reputationally. It requires tighter controls, clearer visibility, faster claims processing and stronger provider oversight. Students deserve a financial aid scheme that not only meets but exceeds its stated mandate,” Mathebula said.
He called on stakeholders to work with the administration to rebuild NSFAS, strengthen accountability and restore public confidence in the institution.
Systemic issues
As part of the Department of Higher Education and Training, the NSFAS runs a close to R50 billion annual budget, providing financial aid to eligible students at public TVET colleges and public universities.
NSFAS has, over the years, faced systemic governance issues, including IT system failures and mismanagement within the scheme.
Following the debacle with the fintech providers, the NSFAS board was booted in 2024, leading to the entity being placed under administration by science, technology and innovation minister professor Blade Nzimande, who served as higher education minister at the time.
Nzimande also cited “serious” IT systems challenges as the reason for dissolving the board and named former SA accountant-general Freeman Nomvalo as the entity’s administrator.
During his term as administrator, Nomvalo told Parliament’s higher education portfolio committee that NSFAS does not possess credible student data and is vulnerable to cyber attacks.
In 2023, the SIU said flaws and weaknesses in the IT systems of the financial aid scheme resulted in overpayments, underpayments and payments to ‘ghost students’ over the years. The SIU, at the time, uncovered that the scheme incorrectly funded some 40 000 non-qualifying students to the tune of more than R5.1 billion.
In 2022, a group of tertiary students, named “Youthful Hope”, threatened a nationwide academic shutdown, because of frustrations with the scheme’s IT system and mismanagement.
The students claimed they had been excluded from NSFAS funding due to the online system miscalculating the number of years they had been funded by the financial aid scheme.
Meanwhile, in 2020, Nzimande said a ministerial committee of inquiry had been appointed to investigate business processes, including an “inadequate” R100 million IT system at NSFAS.
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