MPs finally grill NSFAF

The Namibia Students Financial Assistance Fund (NSFAF) says a sloppily managed transfer from the ministry of education in 2013 was responsible for the unaccounted for N$1.8 billion disbursed to students between 2007 and 2013.

NSFAF CEO Hilya Nghiwete acknowledged the record management at the time was a “challenge”, saying there will be a time to approach the government on how to deal with beneficiaries that cannot be traced since 1997.

Nghiwete added a 2016 reconciliation revealed that out of the more than N$1.7 billion, NSFAF should be able to trace about N$1.5 billion which had been disbursed to universities.

She said NSFAF was now at a third stage to engage the universities to confirm that the money had been transferred.

NSFAF appeared before the Parliamentary Standing Committee on Public Accounts yesterday after it had failed to turn up for a hearing before the standing committee on 27 November last year.

Those who were to respond to questions had to do it under oath. These included members of the new board, chairperson Jerome Mutumba and vice chairperson Christina Swart-Opperman.

The chairperson of the parliamentary committee, Mike Kavekotora, said last year's hearing could not take place due to the “sudden refusal” by NSFAF.

Wanting a full explanation for the no-show, Kavekotora said the standing committee received a letter the day before – on 26 November – in which NSFAF said it would not attend the hearing, adding it was a “sign of disrespect” and blatant disregard for the statutory obligations of the standing committee.

Nghiwete countered by saying NSFAF recognised the oversight role of the standing committee, but added her organisation had considered the questions from the standing committee but after a meeting with Auditor-General Junius Kandjeke was of the view the disbursed N$1.7 billion was “indeed used for the purpose it was meant for”.



Background

NSFAF was asked to appear before the standing committee to account for its “legacy accounts” for the financial periods of 2008/09 to 2012/13. It stated the accounts were prepared on a cash accounting basis with the assumption that all possible legacy debtors were fully impaired – or written off - for various reasons.

Among these reasons provided were that there was some confusion among beneficiaries whether the amounts disbursed were loans or grants.

NSFAF said it was also not clear whether former beneficiaries who had since taken up posts in government were eligible to pay back the money, and some contracts had been signed with minors.

It acknowledged that a number of loans were not repaid while the tracing of debtors was expensive and difficult.

Other reasons for non-repayment of loans included issues with prescription loans, “low repayment morale”, debtors who cannot repay the loans and interest on the loans being disputed.

NSFAF has commissioned a joint venture between Namibian company Tribesman and South African-based New Integrated Credit Solutions (NICS) to recover money not repaid yet. It stated files had been captured which created a book value of about N$453 million to be recovered.



Auditor-general's observations

When NSFAF was transformed into an independent body when it was removed from the former ministry of education in 2013, it had N$115 million in its bank account, which the auditor-general's office said was treated as revenue.

Kandjeke observed in October last year the N$1.7 billion written off was therefore “improper”, saying this amount could indeed run to more than N$2 billion if the interest is factored in.

NSFAF also did not record the written-off amount anywhere in its financial statement of 2014.

The AG also noted NSFAF had at the time not indicated any reasons why the money could not be accounted for.

Moreover, the financial statements of 2010 to 2013 were not audited and no assurance was given to the money disbursed from the government.

Member of the standing committee Nico Smit observed during yesterday's hearing that the transition of NSFAF from the education ministry was chaotic and questioned whether a return of NSFAF to the current Ministry of Higher Education, Training and Innovation would be a viable move.

He said NSFAF was “abandoned” by the former education ministry and was now again being abandoned while the Namibian taxpayers have “to pay through their necks”.

The standing committee also took issue with the fact that NSFAF had contracted PricewaterhouseCoopers (PwC) to prepare its 2014 financial statements and do the audit. AG Kandjeke also disagreed with NSFAF chief financial officer Blessing Nyandoro that this was a normal accounting practice.

CATHERINE SASMAN