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

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

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

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

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

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 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

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

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 in 7 provinces and 50 public Further Education and Training (FET) colleges in all 9 provinces University students 194 504 FET college students 188 182 Students at agricultural colleges and the two National Institutes of Higher Education also received funding

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

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

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

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

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.

Annual Performance Report (p20) Strategic Goal 1 - achieved

Strategic Goal 2 - achieved 2012 – The number of students assisted increased to 382 943 - This was an increase of 93 771 over the number of 289 172 students assisted in 2011

Strategic Goal 3 - achieved 2012 - Disbursements increased from R5,9 to R7,7 billion, an increase of R1,8 billion over 2011

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

Implementation Plan 2014-16 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

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