Board pockets N$7.9 million from bleeding NSFAF

WINDHOEK – While calls for free tertiary education have climaxed, the Namibia Students Financial Assistance Fund (NSFAF) failed to provide sufficient documentation on how it spent billions of taxpayers’ money for eight years. The damning findings are contained in Auditor General (AG) Junias Kandjeke’s audit reports covering the financial periods between 2011 and 2019, and tabled in the National Assembly recently.

In the two reports, for the 2011 to 2013 financial years (FYs) and 2014 to 2019 FYs, the AG gave NSFAF disclaimer and adverse audit opinions, respectively.

“I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion,” Kandjeke crystallises his 2011-2013 disclaimer opinion, in essence distancing himself from giving an opinion. Between 2011 and 2013, it is recorded that at least N$1.3 billion in student funding was declared irrecoverable. Still, no evidence was provided to the auditors to support this. In the reports, he posits that the NSFAF is an entity where accountability is zilch, as even the most basic accounting principles or books do not exist.

Auditors were also not provided with a loan book, cashbooks, bank reconciliations, cash flow statements, strategic plans and minutes of meetings, nor did they disclose debtors or the opening balance in income statements for those three years. During that period, the fund operated on a cash basis.

Meanwhile, in the 2014-2019 report, Kandjeke says: “The accompanying financial statements do not give a true and fair view of the financial position of the NSFAF.”

Between the latter period, NSFAF paid out N$3.3 billion in student loans, which were impaired by N$370 million.

Loan impairment means making a provision that it would not recover the N$370 million from what is disbursed over that period.

However, without a loan book in place, this could not be verified.

“Supporting documents amounting to N$408 million for operational expenditure, student funding expenditure, additions to property, plant and equipment, interest received and subsistence and travel allowances, were not submitted for audit purposes,” the report adds.

In 2014, NSFAF paid N$1.2 million in subsistence and travelling. No records were provided to verify that amount or other amounts for the following years.

NSFAF also failed to disclose interest charged on student loans from 2014 to 2019.

“It was further observed that student fund payments were made without validation checks, and without following the guidelines as directed in the standard operating procedures. Furthermore, student information could not be verified on the awards system,” Kandjeke said.

The auditors also found that the fund is exposed to foreign currency risks through the payment of awards for students studying abroad. “Payments amounting to N$101 million (2014-2019) relating to foreign currency transactions could not be verified due to insufficient documents provided,” the AG notes. NSFAF’s woes continue to pile up as the reports are analysed, with some issues haunting the entity since its days as a directorate in the education ministry.

“These loans and commitments could not be measured reliably as there were no accurate and complete records from the ministry.”

For the board of directors tasked with fiduciary responsibilities, it appears they are well remunerated as the fund paid N$7.9 million in board fees in just six years.

Broken down, NSFAF paid its directors N$254 279 in 2014; N$1 million (2015); N$2.9 million (2016); N$1.4 million (2017); N$933 467 (2018) and N$1.3 million in 2019.

During that period, NSFAF had no more than five board members on average.