1. NSFAS ANNUAL REPORT 2013
PRESENTATION TO SELECT COMMITTEE ON EDUCATION & RECREATION
05 MARCH 2014

2. Agenda NSFAS Annual Report 2013 Progress in 2013 Plans for 2014
Board Chairperson’s Report
Executive Officer’s Report
Annual Financial Statements
Annual Performance Report
Progress in 2013
Plans for 2014

3. 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

4. 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

5. Board – composition & committees
Board – 18 appointed and co-opted members
5 Board committees were fully functional during 2012
Executive Committee 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

6. 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 bn - an increase of R1,8 billion over 2011
The number of students assisted increased to , in line with the funding increase from DHET and other departments
This is an increase of students over the total of supported in 2011

7. 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

8. 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 students
– an increase of 15% from 2011
NSFAS provided funding to students at the 23 public universities in 7 provinces and 50 public Further Education and Training (FET) colleges in all 9 provinces
University students
FET college students
Students at agricultural colleges and the two National Institutes of Higher Education also received funding

9. 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
Amount provided
Loan amount
Final Year programme
R1 billion
FET College bursaries
R1,8 billion
60/40 Convertible loans
R1,5 billion
Other bursaries
R2,4 billion
Total
R6,2 Billion

10. Annual Financial Statements
The Annual Financial Statements were approved by the NSFAS Board on 15 August 2013.
The delay from 31 July to 15 August 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

11. AFS- Balance Sheet (p77) Investments and bank R620 million
Investments R 186,4 million
Cash R 433,6 million
Prepayments R 797,3 million
Student loans R 7,6 billion
Current R619,7 million
Non current R 7,0 billion
Loans R 15,8 billion
Fixed assets R23,6 million
PPE R 8,1 million
Intangibles R 15,5 million
Payables R 28,4 million

12. Expenditure Operational expenses R58,4 million Salaries R38,9 million
Transformation project R17,4 million
Audit fees R 8,9 million
Computers R 2,8 million
Consulting fees R 4,2 million
Travel and subsistence R 2,4 million
Printing R 1,1 million

13. Irregular expenditure remediation
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.(SCM).
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.

14. Annual Performance Report (p20) Strategic Goal 1 - achieved

15. Strategic Goal 2 - achieved
2012 – The number of students assisted increased to
- This was an increase of over the number of students assisted in 2011

16. Strategic Goal 3 - achieved
Disbursements increased from R5,9 to R7,7 billion, an increase of R1,8 billion over 2011

17. Progress in 2013 Transformation project nearing completion
New loan management system developed and implemented from 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 in all provinces
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

18. Implementation Plan
New student-centred model to be fully implemented
New core loans and bursaries management system operational
Pilot Phase in 2014 at 7 universities and 5 FET colleges
Pilot Phase 2014
Phase 2
2015
Phase 3
2016
% University students 30 60
100
% FET college students 10
Aligned with introduction of
Central Application Service (CAS) for students from all provinces

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