Manamela places NSFAS under administration
Minister Buti Manamela has placed NSFAS under administration, citing governance instability, audit failures and operational breakdowns affecting student funding and the credibility of the higher education funding system.
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In a significant move, Minister of Higher Education Buti Manamela has placed the National Student Financial Aid Scheme (NSFAS) under administration due to ongoing governance issues, audit failures, and operational challenges affecting student funding.
Speaking at a media briefing on Monday, he highlighted NSFAS's vital role in facilitating access to higher education for students from disadvantaged backgrounds.
“NSFAS is one of the most important public institutions in our democratic project,” he said, adding that it exists “to ensure that young people from poor and working-class backgrounds are able to access higher education and training.”
He warned that instability at the entity had wider consequences beyond the institution itself.
“Any instability within NSFAS therefore has implications not only for universities and TVET colleges, but for students, households, communities, the fiscus, and public confidence in the ability of the democratic state to advance social justice,” he said.
Manamela said the decision to place NSFAS under administration was taken after legal and governance considerations under sections 17A to 17D of the NSFAS Act, 1999, following what he described as a prolonged period of intervention attempts and assessments.
“Today, after careful consideration of the legal, governance, financial and operational circumstances affecting NSFAS, and acting in terms of sections 17A to 17D of the National Student Financial Aid Scheme Act, 1999, I have taken the decision to place NSFAS under administration and appoint an Administrator,” he said.
He stressed that the move followed a series of failed attempts to stabilise the institution through ordinary governance mechanisms.
“This decision was not taken lightly. It follows a long process of engagement, legal assessment, governance intervention, and consideration of alternatives,” he said.
Manamela pointed to long-standing governance concerns, including issues relating to the constitution of the NSFAS board, which led the department to approach the courts through self-review proceedings.
He said government could not ignore possible legal irregularities in a statutory body managing billions of rand in public funds.
As governance instability continued, NSFAS also experienced board resignations, including that of the chairperson and other members, prompting the appointment of interim leadership. However, Manamela said instability persisted and deeper operational concerns began to emerge.
He cited a disclaimer audit outcome for the 2024/25 financial year, irregularities flagged by the Auditor-General, weaknesses in consequence management, data integrity problems, ICT system delays, unresolved student appeals and failures in student accommodation oversight.
“In March this year, I issued a formal Ministerial Directive to NSFAS in terms of the NSFAS Act,” he said.
He said it followed “serious concerns arising from, among other matters, the 2024/25 disclaimer audit outcome and material irregularities identified by the Auditor-General.”
He added that there were also “weaknesses in consequence management, serious data integrity concerns, unresolved student appeals caused substantially by system deficiencies, and delays in ICT modernisation and systems integration.”
Manamela said student accommodation failures affecting student dignity and safety, as well as broader governance and accountability concerns, also formed part of the directive.
He said governance instability worsened further following additional resignations within the board, leaving the institution unable to function effectively under its existing structure.
Manamela said that after considering alternatives, including filling vacancies, appointing further interim leadership and increasing departmental oversight, he was not satisfied that these measures would restore stability in time.
“Ultimately, however, I was not satisfied that the ordinary governance arrangements were capable of adequately stabilising the institution within the urgency and seriousness of the challenges confronting NSFAS,” he said.
Former South African Reserve Bank and revenue service executive Professor Hlengani Mathebula has been appointed as administrator.
Manamela said Mathebula brings extensive governance, financial and institutional leadership experience across the public and private sectors, as well as academic leadership in higher education.
His mandate will include stabilising governance structures, addressing audit failures, fixing ICT systems, improving student funding operations, resolving appeals backlogs and strengthening institutional controls.
Manamela stressed that student funding would not be disrupted.
“Student funding will continue. Allowances will continue. Appeals processes will continue. Universities and TVET colleges will continue engaging NSFAS operationally,” he said.
He said the intervention was aimed at restoring stability rather than disrupting services, and rejected any suggestion that the move was driven by internal politics.
He added that government remained committed to ensuring NSFAS fulfilled its mandate and thanked board members for their service under difficult circumstances