SIU finds R8.3m irregular expenditure in Free State bursary programme

The Special Investigating Unit (SIU) has uncovered serious maladministration, irregular bursary allocations, and unauthorised expenditure within the Office of the Premier (OTP) in the Free State, where officials allegedly awarded bursaries to ineligible recipients, including relatives of officials, foreign nationals, and a deceased student, resulting in millions of rand in public funds being misused.

Speaking during a media briefing on Tuesday, Acting Head of the SIU, Leonard Lekgetho, said that the investigation was authorised by President Cyril Ramaphosa under Proclamation 123 of 2023, following concerns raised by the Auditor-General of South Africa in its 2019 and 2020 reports.

Lekgetho said the bursary scheme was intended to support needy students and address scarce skills shortages in the province, but officials failed to comply with eligibility rules and financial controls.

”The Free State Provincial Government allocated funds to support needy students in accessing higher education and to address the shortage of scarce skills in the province through bursaries.

”Each year, funding is provided for Free State students pursuing scarce-skill professions at higher education institutions.”

However, Lekgetho said the SIU found that bursaries were improperly awarded to relatives of officials without following due process, while in other cases, officials themselves benefited unlawfully from state funding.

”Officials awarded bursaries to their relatives, the deceased, and foreign nationals, as well as to ineligible officials, and left millions of Rands in university accounts unaccounted for.”

Lekgetho said some officials received bursaries without submitting valid applications, while others continued receiving benefits even after leaving government service.

He said the investigation further found that students who had failed modules had their bursary contracts extended without proper termination or review, in some cases from three years to seven years.

Lekgetho said bursaries were also allocated for qualifications not included in the approved provincial skills plan, with required approvals not obtained.

Among the findings, Lekgetho said one official awarded bursaries to relatives without following due process, while another received funding despite failing to meet the requirements of the applicable Human Resource Strategy and Development Circular.

He said the SIU also found that bursary contracts were improperly extended after students failed modules.

“Certain students failed some of their modules during their studies, but the bursary contracts were never terminated by the OTP and continued from a three-year contract to a seven-year contract,” Lekgetho said.

He said investigators also found that some applicants received funding for qualifications that were not included in the 2018/19 Provincial Workplace Skills Plan, and that required approval processes were not always followed.

Lekgetho said an official who received an international government-funded bursary continued benefiting from the programme after resigning from public service.

He further highlighted irregularities in an agreement between the OTP and an international tertiary institution.

“However, the SIU found a contradiction in the agreement, with OTP eventually contributing 65% of the scholarship,” he said.

He said an incomplete agreement between the OTP and an international institution showed conflicting funding arrangements, which resulted in the provincial government contributing 65% instead of the intended 35%, leading to irregular expenditure exceeding R8.3 million.

Lekgetho said a deceased student had also received bursary funding from both the OTP and NSFAS, with R34,891.60 paid to the University of the Free State and later transferred to a suspense account after the student’s death, while NSFAS had deposited R13,000 into the student’s account, which was used by the family.

He said recovery of the funds was limited due to legal and financial constraints.

”The SIU identified the officials who approved the bursary and extension, resulting in the payment of R34 891.60, as well as funding courses the student failed to complete, resulting in breach of contractual and policy obligations. ”

Lekgetho said seven foreign nationals were also found to have received bursaries in breach of policy, which restricts funding to South African citizens residing in the Free State, resulting in irregular expenditure of R576,734.48.

He said government officials were found to have received full-time bursaries during the 2019/2020 financial year, despite the policy only allowing part-time study support.

Lekgetho said excessive stipend payments amounting to R1.8 million were identified, particularly involving students studying abroad.

He said the SIU had recovered R6.3 million from seven universities after tracking unused funds held in suspense accounts.

Lekgetho said 18 acknowledgements of debt totalling R1.9 million had been signed with individuals who benefited irregularly, with R283,571 already recovered through instalments.

He said 38 officials had been referred for disciplinary action for alleged breaches of the Public Finance Management Act and bursary policy.

”The SIU has made 38 disciplinary referrals against implicated officials, including human resource officers, administration clerks, assistant directors, deputy directors and directors, for contravening the Public Finance Management Act and the Free State bursary policy.”

”In addition, evidence indicating the commission of a criminal offence against seven individuals has been referred to the National Prosecuting Authority (NPA) for possible prosecution on charges including fraud, theft, and money laundering,” he said. 

Lekgetho said evidence involving seven individuals had been referred to the National Prosecuting Authority for possible prosecution on charges including fraud, theft, and money laundering.

“These referrals are not symbolic. They represent the SIU’s unwavering commitment to accountability, ensuring that those who abused power face the full weight of the law,” Lekgetho said. 

 

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