Dicey NSFAF loans up 82%
An incomplete loans database nearly three years after the NSFAF became an independent secretariat, left auditors with questions about the fund’s total loan book of nearly N$1.4 billion in its 2016 financial year.
Jo-Maré Duddy – The impairment of loans at the Namibia Students Financial Assistance Fund (NSFAF) skyrocket by nearly 82% between 2015 and 2016.
According to NSFAF’s annual report for 2015/16, which was tabled in Parliament recently, the institution ended its 2016 financial year with a total impairment of student loans of nearly N$28.3 million – about N$12.7 million more the previous year.
A loan is considered to be impaired when it is probable that not all of the related principal and interest payments will be collected.
As in 2015, the impairment of student loans comprised about 2.04% of the total amount advanced.
The NSFAF’s total loan book on 31 March 2016 stood as nearly N$1.4 billion, compared to about N$762.3 million on the same day in 2015. Of this, nearly N$299.1 million were new loans, while around N$1.09 billion were continuing loans.
During the 12 months under review, the impairment of new loans jumped by about N$4 million or 208% to nearly N$6.1 million. The impairment of continuing loans increased by around N$8.6 million or 63% to nearly N$22.2 million.
Audit
The lack of proper records regarding student loans landed the NSFAF with a qualified audit opinion from PwC Namibia for its 2016 book-year.
Before May 2013, the fund was part of the ministry of education. When the NSFAF was established as an independent secretariat, it took over all the loans advanced and commitments from the ministry. For the 2016 audit, NSFAF management could not provide PwC with a complete list of all loans and commitments taken over from the ministry.
“As a result, we were unable to satisfy ourselves over the completeness of these loans, recoveries and related commitments,” the auditors said.
According to PwC, the NSFAF’s student loan database was not completed at the time of the audit. The auditors pointed out that the fund was in the process of establishing a student loans database. At the time, the student loans balance due from each student was kept in files.
“Management did not perform a reconciliation between the total amount receivable from each student as per the student files to the total amount receivable as per amount paid as recorded in the general ledger.
“As a result, we were unable to determine whether any adjustments would be required in respect of student loans balance and the related elements making up the statements of financial position, statement of profit or loss and other comprehensive income and changes in equity and cash flows,” PwC said.
Income, expenses
A government grant of more than N$1.07 billion was awarded to the NSFAF in the year under review. In total, the fund received in excess of N$1.4 billion in grants for student funding and administrative costs, about 31% more than the previous year.
The NSFAF managed to recover nearly N$4.6 million of previously impaired loans, an increase of about 10% compared to its 2015 financial year. Cash on hand and bank balances at the end of March 2016 stood at N$931 682, down 6.7% from the previous year.
Student funding expenses of about N$534 million were nearly 107% higher than in 2015, while admin expenses increased by 51% to N$87.5 million.
This left the NSFAF with a surplus of about N$787.9 million for its 2016 financial year, around 4% more than the previous year.
According to NSFAF’s annual report for 2015/16, which was tabled in Parliament recently, the institution ended its 2016 financial year with a total impairment of student loans of nearly N$28.3 million – about N$12.7 million more the previous year.
A loan is considered to be impaired when it is probable that not all of the related principal and interest payments will be collected.
As in 2015, the impairment of student loans comprised about 2.04% of the total amount advanced.
The NSFAF’s total loan book on 31 March 2016 stood as nearly N$1.4 billion, compared to about N$762.3 million on the same day in 2015. Of this, nearly N$299.1 million were new loans, while around N$1.09 billion were continuing loans.
During the 12 months under review, the impairment of new loans jumped by about N$4 million or 208% to nearly N$6.1 million. The impairment of continuing loans increased by around N$8.6 million or 63% to nearly N$22.2 million.
Audit
The lack of proper records regarding student loans landed the NSFAF with a qualified audit opinion from PwC Namibia for its 2016 book-year.
Before May 2013, the fund was part of the ministry of education. When the NSFAF was established as an independent secretariat, it took over all the loans advanced and commitments from the ministry. For the 2016 audit, NSFAF management could not provide PwC with a complete list of all loans and commitments taken over from the ministry.
“As a result, we were unable to satisfy ourselves over the completeness of these loans, recoveries and related commitments,” the auditors said.
According to PwC, the NSFAF’s student loan database was not completed at the time of the audit. The auditors pointed out that the fund was in the process of establishing a student loans database. At the time, the student loans balance due from each student was kept in files.
“Management did not perform a reconciliation between the total amount receivable from each student as per the student files to the total amount receivable as per amount paid as recorded in the general ledger.
“As a result, we were unable to determine whether any adjustments would be required in respect of student loans balance and the related elements making up the statements of financial position, statement of profit or loss and other comprehensive income and changes in equity and cash flows,” PwC said.
Income, expenses
A government grant of more than N$1.07 billion was awarded to the NSFAF in the year under review. In total, the fund received in excess of N$1.4 billion in grants for student funding and administrative costs, about 31% more than the previous year.
The NSFAF managed to recover nearly N$4.6 million of previously impaired loans, an increase of about 10% compared to its 2015 financial year. Cash on hand and bank balances at the end of March 2016 stood at N$931 682, down 6.7% from the previous year.
Student funding expenses of about N$534 million were nearly 107% higher than in 2015, while admin expenses increased by 51% to N$87.5 million.
This left the NSFAF with a surplus of about N$787.9 million for its 2016 financial year, around 4% more than the previous year.
Comments
Namibian Sun
No comments have been left on this article