The South African government’s massive investment in facilitating access to financial aid through the Medium Term Expenditure Framework (MTEF) is aimed at narrowing the intractable economic divide and providing upward mobility for individuals from poverty-stricken households.

Statistics suggest that this social investment is providing good returns. The positive impact is both in significantly higher levels of throughput (10% higher) and lower levels of dropout (10% lower) of NSFAS-funded students in comparison to the national cohort. The extent of this investment is illustrated by the fact that NSFAS-funded students constitute roughly 42% of university and 70% of Technical and Vocational Education and Training (TVET) registration, supporting over 650 000 students in 2019.

However, the difficulties faced by the organisation have been widely acknowledged, contributing to the decision to put NSFAS under administration in 2018. When announcing his appointment, Minister Naledi Pandor impressed on the administrator that fixing NSFAS will not produce sustainable outcomes unless the contradictions, misalignment and inefficiencies in the higher education sector are remediated in a concurrent fashion.

It is worth reflecting on the sector-wide impact brought about by the administrator over the past 21 months. Despite unreliable and poorly designed systems, NSFAS achieved the requisite stability to ensure predictable and timeous disbursement cycles during 2019. Irregular expenditure amounting to R7.5 billion for the period prior to administration was quantified, and hitherto 40% of the 440 000 records have been remediated. The completion of forensic investigations identified criminal syndicates, corporate governance abuses, fraud and corruption. Staff members have been dismissed, and criminal charges have been handed over to specialised prosecution agencies. Mr Mamagase Elleck Nchabeleng, chairperson of the Parliamentary Select Committee on Education, Technology, Sports, Arts and Culture, stated, “NSFAS is now an entity which prioritised consequence management. Certain criminal syndicates operating within NSFAS had been reported to law enforcement agencies.”

Measures put in place

NSFAS was bereft of processes, and quality management was a foreign concept. Thus, it was important that during administration, all critical processes be mapped and policies and standard operating procedures be developed within an ISO9000 framework. A top-heavy management crowded out technical human capital, and thus all vacancies were frozen and funds ring-fenced for technical capacitation in information and communications technology (ICT), governance, and risk and financial management.

Strengthened financial controls now offer reconciliation of accounts at student level. This compelled institutions to maintain discipline in accounting and enforced accountability. NSFAS’ reconfigured data architecture, improved ICT governance and disintermediation of third parties minimised data corruption and improved data exchange protocol and cybersecurity.

Commercial interests that eroded value from the disbursement chain have been removed. The ill-advised voucher scheme that directed purchases to preferred vendors, in defiance of anticompetitive legislation, was scrapped and replaced with cash disbursements. This evoked controversy, with allegations that students were too immature to manage cash with media showing students drinking and feasting upon receipt of allowances. This patronisation of black students was put to bed.

Had all these measures not been put in place, it is arguable that the COVID-19 pandemic could have done much greater damage to the scheme. Indeed, lockdown has been traumatic and mitigating measures had to find a balance between saving lives and preventing a catastrophic economic meltdown. However, for many in leadership positions, COVID-19 also presented a time for introspection and the opportunity to repurpose organisations to serve humanity better. COVID-19 presented the post-school education and training (PSET) system with opportunities to challenge long-held paradigms, expedite innovation and overcome bureaucratic ennui.

Into the 21^st century

For example, in collaboration with Sector Education and Training Authorities, improved targeting of missing-middle and postgraduate students and closer matching of the allowance structure eventuated. Improved structured referral systems will contribute greatly to specialised skills output from the PSET system.

The COVID-19 crisis precipitated debates on how augmentation using technology could enhance pedagogy during and beyond the lockdown period and bring greater equity between university and TVET students. Technology enablement of TVET pedagogy will better equip TVET students for a modern economy. Minister Blade Nzimande described the decision to provide digital devices to all NSFAS beneficiaries as a bold step.

During the COVID-19 lockdown, NSFAS maintained remarkable business continuity, adopting a virtual operating model. Parliament’s Select Committee on Education, Technology, Sports, Arts and Culture said, “We are satisfied with the efficiency with which the NSFAS Administrator had run the entity, even during the COVID-19 pandemic. Commendable work to stabilise the student financial aid scheme is being realised and that has been demonstrated by how allowances are being distributed to students.”

In the case of NSFAS, the COVID-19 crisis did not go to waste. It forced a contemplation of the future and brought forward innovation, expedite appreciation of technological gains of the Fourth Industrial Revolution and improved institutional alignment. Consequently, the South African PSET system has been dragged kicking and screaming into the 21^st century.