SIU flags R320m in dormant NSFAS Celbux accounts

Four fintech companies have claimed R1.3 billion in compensation from the cash-strapped National Student Financial Aid Scheme (NSFAS). The claims come amid ongoing scrutiny of the agency's financial management and administrative practices, following recent revelations of systemic failures uncovered by the Special Investigating Unit (SIU). The SIU, during a presentation to Parliament’s Standing Committee on Higher Education, revealed that approximately R320 million in funds intended to support students remained dormant in accounts linked to the now-discontinued Celbux voucher payment system. These accounts, dating back to 2018, continue to show activity despite the system having been phased out in 2022. The SIU noted that many of these dormant accounts were associated with higher education institutions that had not yet repaid the funds to NSFAS. Some institutions reportedly refused to return the money, citing outstanding fees owed for previous academic years. Between 2017 and 2025, the SIU received 14 proclamations to investigate issues within the higher education sector. Of these, eight investigations have concluded, while six are still ongoing. One major finding concerned NSFAS’s direct payment system, through which student allowances are transferred directly into beneficiaries' bank accounts. The SIU highlighted that NSFAS had violated its own internal guidelines and contravened Section 217(1) of the Constitution by awarding five-year contracts to four service providers, Coinvest Africa, Tenet Technology, Ezaga Holdings, and Norraco Corporation, to manage these payments. In June, the Western Cape High Court ruled that NSFAS’s decision to appoint these service providers was unconstitutional and invalid. While the court acknowledged flaws in the procurement process, it concluded that the service providers themselves were not involved in maladministration, impropriety, or corruption. The SIU also identified broader issues within NSFAS, including the continued operation of the Celbux system, which used cellphone numbers of registered students to generate vouchers for payments. Despite the system’s discontinuation, the SIU found that numerous accounts remained active, contributing to the R320 million in unclaimed funds. During inspections, the SIU visited 58 institutions across all nine provinces. Many of these institutions were aware of their obligations to repay the funds once the close-out process was finalized. However, some institutions resisted repayment, claiming they were owed money for past academic years. According to the SIU, NSFAS is estimated to owe higher education institutions R10.4 billion in outstanding fees. Institutions have been instructed to repay portions of their credit balances while resolving disputes related to missing students. Those who have deposited the funds in interest-bearing accounts are advised to return the entire amount along with the accrued interest. Additionally, the SIU discovered that more than 40,000 students across 76 higher education institutions were improperly funded, resulting in an estimated loss of R5.1 billion. Dr Thato Masekoa, spokesperson for the South African Union of Students (SAUS), expressed concern over the findings, stating that the issues extend beyond mere accounting errors and reflect deeper governance and accountability failures. He emphasized that students should not suffer the consequences of systemic mismanagement, calling for fair and proper accountability mechanisms. As the situation unfolds, further action is expected from both the SIU and relevant parliamentary committees to address the financial discrepancies and ensure transparency in the administration of student funding programs. The resolution of these issues will likely involve legal proceedings, policy reforms, and increased oversight to prevent similar occurrences in the future.