Nsfas employees defraud students of their funds

Nsfas is responsible for funding the public tertiary education of poor and working class students (Madelene Cronje/M&G)

Nsfas is responsible for funding the public tertiary education of poor and working class students (Madelene Cronje/M&G)

Employees of the National Student Financial Aid Scheme (Nsfas) and other people have been defrauding students of their allowances. One staff member was arrested last month for fraud amounting to just over R300 000.

Officials of the scheme, which is responsible for funding the public tertiary education of poor and working class students, revealed this when they presented the scheme’s annual report to the parliamentary portfolio committee on higher education, science and technology this week.

They said that 510 cases of alleged fraud have been reported to the commercial crime unit in the Western Cape.

The officials told the portfolio committee that students are also targeted through the mobile wallet, sBux.
The fraudsters, who are not employed by scheme, know the details of students because they are captured on the Nsfas system. They are then able to hijack the student portal and transfer funds.

Students use sBux to pay for food, accommodation (for those who do not stay at residences), books and travel.The mobile system also allows students to withdraw money or spend it at some of the largest food retail stores.

The officials said the employee arrested last month allegedly committed the fraud during September and October and the money defrauded amounted to R338 397.48.

In other instances of fraud, R6 783 was taken from October 14 to 20 and R9 415 from October21 to 27. This was achieved by changing the cellphone number of the students on the Nsfas portal.

The officials said an internal forensic investigation was looking into the misappropriation of student allowances in 2017 and 2018 through the sBux.

The investigation was, among other reasons, triggered by payments that cannot be linked to students, an internal audit report on cell number changes and prima facie evidence of students being defrauded.

Three Nsfas employees will appear in court on Friday next week, in separate cases, after being arrested at the Wynberg office on October 8 for allegedly making unauthorised changes to cellphone numbers to misappropriate student allowances through sBux.

One employee apparently took R3 500 and the other two employees misappropriated funds amounting to R7 500.

In another case, a former employee was identified on three occasions transacting on a student sBux account. The money taken amounted to R15 503. The employee has fled the Western Cape and a warrant of arrest has been issued.

A Nsfas contact centre agent also is on the run and a warrant of arrest has been issued. The agent allegedly made unauthorised cellphone number changes and defrauded a student of R8 135.

The officials said steps had been taken to curb fraud. The scheme has already blocked the ability to change cellphone numbers on its systems, including through the student portal.

From next year the sBux will be discontinued and instead payments to students will be through their bank accounts. The scheme would verify a student’s ID number with the bank account.

The scheme was put under administration in August last year.

Bongekile Macupe

Bongekile Macupe

Bongekile Macupe is the education reporter at the Mail & Guardian. She is an award-winning journalist who has extensively covered both basic and higher education in South Africa. Her coverage includes #FeesMustFall, the case of Michael Komape and education in rural areas.  Read more from Bongekile Macupe

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