NSFAS ANNUAL REPORT 2013

PRESENTATION TO PORTFOLIO COMMITTEE ON HIGHER EDUCATION & TRAINING

08 OCTOBER 2013

Agenda

NSFAS Annual Report 2013

• Board Chairperson’s Report

• Executive Officer’s Report

• Annual Financial Statements

• Annual Performance Report

Progress in 2013

Plans for 2014

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Board Chairperson’s Report

In terms of the NSFAS Act (56 of 1999), NSFAS is a public entity which has 7 functions:

• To develop criteria and conditions for the granting of loans and bursaries to eligible students in consultation with the Minister

• To raise funds • To allocate funds for loans and bursaries to eligible students• To recover loans• To maintain and analyse a database and undertake research for the

better utilisation of financial resources• To advise the Minister on matters relating to student financial aid• To perform other functions assigned to it by the NSFAS Act or by the

Minister

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Board Chairperson’s Report

NSFAS has made significant progress in the year under review to carry out this mandate• All board positions filled and committees fully functional • Initiated Transformation Programme for new student-centred

model • Developed comprehensive policies for IT governance, systems

and operations, financial and human resources management − Prioritised compliance with legislation and regulation,

including the NSFAS Act, Public Finance Management Act (PFMA)(1 of 1999) and National Credit Act (34 of 2005)

• Appointed executive managers• Achieved an unqualified audit for third year in succession since

embarking on turnaround

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Board – composition & committees

Board – 18 appointed and co-opted members

5 Board committees were fully functional during 2012• Executive Committee - 11 meetings

- chairperson Mr Zamayedwa Sogayise• Finance Committee - 6 meetings

- Ms Kirti Menon• Audit and Risk Committee - 6 meetings

- chairperson Mr Stephen Smith• Information and Communications Technology Committee – 2 meetings

- chairperson Dr Tim Brown• Human Resource and Remuneration Committee – 4 meetings

- chairperson Ms Sibongile Masinga

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Executive Officer’s Report

The core business of NSFAS is to allocate funds for loans and bursaries to eligible students

• In 2012, disbursements increased from R5,9 to R7,7 billion, an increase of R1,8 billion over 2011

• The number of students assisted increased to 382 943, in line with the funding increase from DHET and other departments− This is an increase of 93 771 students over the total of

289 172 supported in 2011

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Executive Officer’s Report

The NSFAS Act requires the entity to:“Develop criteria and conditions for the granting of loans and bursaries to eligible students in consultation with the Minister…..”

This mandate was achieved in 2012 by:• Laying the foundation for the Transformation Programme

• Procuring a new loans and bursaries management system to replace the old TEFSA system used since 1991• Appointing senior managers

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Annual Financial Statements

The Annual Financial Statements (p63) show in detail what NSFAS does and how it fulfils its mandate. The following are some highlights from the year under review:

• In 2012, NSFAS distributed financial aid of R7,7 billion to 382 943 students – an increase of 15% from 2011

• NSFAS provided funding to students at the 23 public universities and 50 public Further Education and Training (FET) colleges

– University students 194 504– FET college students 188 182– Students at agricultural colleges and the two National

Institutes of Higher Education also received funding

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Annual Financial Statements

Since inception in 1991, NSFAS has provided R32,8 billion in student financial aid to more than 1 million students.

NSFAS contributes to free education for students from poor and working class families by providing full bursaries and converting loans to bursaries to incentivise good academic performance.

•N

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Amount provided Loan amount

Final Year programme R1 billion

FET College bursaries R1,8 billion

60/40 Convertible loans R1 billion R1,5 billion

Other bursaries R2,4 billion

Total R6,2 Billion

Annual Financial Statements

• The Annual Financial Statements were approved by the NSFAS Board on 15 August 2013.

• The delay was due to a decision taken by the Auditor-General on 30 July 2013 to conduct an actuarial review of the loan book value (Auditor-General’s Report, p66) – Restatement of corresponding figures

• Note 2 (p92) Prior Period Error

– the loan book value was calculated incorrectly prior to 2012

– the error was corrected after an actuarial review during the 2013 audit to the satisfaction of the Auditor-General

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AFS- Balance Sheet (p77)

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Expenditure

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Irregular expenditure

R25,6m

R28,1m

*R7,9m

2010 2011 2012

Expenditure

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*R4,8m from previous year irregular expenditure

Irregular expenditure remediation

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Remedial steps• As part of our audit improvement plan, NSFAS put in place the

following measures to enable management to adequately monitor compliance with laws and regulations relating to supply chain management.• Established a Supply Chain Management office

• Appointed a Senior Manager: Supply Chain Management

• Appointed SCM staff

• Trained all staff on SCM compliance

• Introduced an automated procurement system

• Implemented a supplier rotation system

• Conducted quarterly Internal Audit reviews

• The full benefit of these audit improvement measures will be visible in the next audit period.

Annual Performance Report (p20)Strategic Goal 1 - achieved

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Strategic Goal 2 - achieved

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2012 - Students assisted increased to 382 943 - Increase of 93 771 over 289 172

students assisted in 2011

Strategic Goal 3 - achieved

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In 2012, disbursements increased from R5,9 to R7,7 billion, an increase of R1,8 billion over 2011

Progress in 2013• Transformation project is nearing completion as promised• New loan management system developed and in the process

of being implemented in October 2013• MoUs signed with government departments to share

information to ensure funding reaches intended beneficiaries– DBE - to identify eligible learners from rural, Q1-3 schools;

– Umalusi to obtain school results

– DoHA - student and family ID validation

– DSD - Access to SASSA database to confirm social grant recipients

• New organisational structure approved by the Board– staff to increase from 166 to 299 incrementally as new model

implemented nationally over three years

– Additional operational budget required to effectively administer and account for public funds of R8,5 billion

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Implementation Plan 2014 -16

Pilot Phase 2014

Phase 2 2015

Phase 3 2016

% University students 30 60 100

% FET college students 10 60 100

Aligned with introduction of Central Application Service (CAS)

• New student-centred model fully implemented

• New core loans and bursaries management system operational

• Pilot Phase in 2014 at 7 universities and 5 FET colleges

The doors of learning and culture shall be opened!Freedom Charter, 1955Green Paper for Post School Education and Training, 2012

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