Fort Hare University is in such financial distress that it has resorted to using precious student funding to pay staff.
As a result, hundreds of students in desperate need of crucial state aid have lost out.
The Department of Higher Education and Training (DHET) says what Fort Hare has done is illegal and it will investigate the contents of a forensic report into the matter, as well as the university’s finances.
“NSFAS money is for students who come from poor backgrounds and it is not meant to be used for any other thing including salary payments,” said spokesman, Khaye Nkwanyana.
The latest bombshell is contained in the executive summary of the forensic report by FastTrac Freelance Business Specialists, which painted a picture of an institution in financial crisis.
The Saturday Dispatch has seen a copy of the document which revealed that UFH, which counts many black luminaries among its alumni, had received a R35-million advance payment from the National Student Financial Aid Scheme (NSFAS) in December last year to settle outstanding claims.
“Subsequently, claims worth only R20-million were sent to NSFAS, which means that the university utilised R15-million of NSFAS funding to cover 2015 losses. This amount could have funded about 500 students, who were denied assistance in 2015,” the report revealed.
Vice-chancellor Dr Mvuyo Tom yesterday admitted the university had redirected student funds and grants to pay salaries.
“NSFAS funds are for fees in the first instance, and the fees cover operations of the university including student accommodation and tuition. These pay for salaries.
“At the end of last year NSFAS had not paid all the funds that were due to the university. The university recovered those and could be able to pay for its operations including salaries,” he said yesterday. (See full response on page 5)
Student funding has been a bone of contention at the institution.
Earlier this year, desperate students camped outside the university’s finance buildings at the East London and Alice campuses to sign NSFAS agreement forms.
The forms permit students to claim allowances for food and books.
The student representative council (SRC), led by the DA Student Organisation (Daso), released R500000 from their R4-million budget to help needy students.
Eastern Cape premier Phumulo Masualle also gave more than R5-million to the university to assist starving students.
A student leader at the university, who asked not to be named, said the news was shocking.
“What this university has allegedly done is wrong and many of the students have suffered because of lack of funds. We will see what we will do about this,” he said.
The report by FastTrac – a private company appointed last year to review the institution’s financial position – said alarm bells had been sounding for the last two years.
It said the situation had “accreted over a number of years to reach this critical stage”.
“The situation is now so serious that Fort Hare could run out of money by next month.
“Unless significant additional income is received, the university will not be able to pay its R30-million monthly salaries bill or meet other payments,” the report warned.
The warning comes weeks after Tom in an interview with the Saturday Dispatch said the university’s precarious financial standing was due to student debt.
He said about 1000 students owed the university close to R67-million.
FastTrac identified weak financial controls at the university and alleged staff were manipulating the weaknesses for their own benefit.
“An academic staff member on sabbatical claimed subsistence and travel expenses for two different overseas conferences in two different countries on the same day and both claims were paid by the university,” the report revealed.
The investigation also found that some staff allegedly submitted:
lFalsified/or duplicate claims for hours worked;
lFalsified expense claims; and
lDrew full salaries despite being on permanent leave.
It also found that tax was not being deducted from salaries.
“The council and management should have realised the seriousness of the situation when reviewing the 2013 annual financial statements, which at the time showed the university’s already precarious financial position,” the report read.
Staff members, who are privy to the finances of the university, said there were times last year they were told that salaries would not be paid.
“We knew that this was going to happen and soon this historic university, which is turning 100 next year, will go under administration,” said one.
Another staffer said: “The students are ignored, the core business of the institution is ignored because the management is worried about money.
“How do you explain that money for the students is used to pay salaries? This university is going bankrupt.”
Student funds used for Fort Hare salaries
As a result, hundreds of students in desperate need of crucial state aid have lost out.
The Department of Higher Education and Training (DHET) says what Fort Hare has done is illegal and it will investigate the contents of a forensic report into the matter, as well as the university’s finances.
“NSFAS money is for students who come from poor backgrounds and it is not meant to be used for any other thing including salary payments,” said spokesman, Khaye Nkwanyana.
The latest bombshell is contained in the executive summary of the forensic report by FastTrac Freelance Business Specialists, which painted a picture of an institution in financial crisis.
The Saturday Dispatch has seen a copy of the document which revealed that UFH, which counts many black luminaries among its alumni, had received a R35-million advance payment from the National Student Financial Aid Scheme (NSFAS) in December last year to settle outstanding claims.
“Subsequently, claims worth only R20-million were sent to NSFAS, which means that the university utilised R15-million of NSFAS funding to cover 2015 losses. This amount could have funded about 500 students, who were denied assistance in 2015,” the report revealed.
Vice-chancellor Dr Mvuyo Tom yesterday admitted the university had redirected student funds and grants to pay salaries.
“NSFAS funds are for fees in the first instance, and the fees cover operations of the university including student accommodation and tuition. These pay for salaries.
“At the end of last year NSFAS had not paid all the funds that were due to the university. The university recovered those and could be able to pay for its operations including salaries,” he said yesterday. (See full response on page 5)
Student funding has been a bone of contention at the institution.
Earlier this year, desperate students camped outside the university’s finance buildings at the East London and Alice campuses to sign NSFAS agreement forms.
The forms permit students to claim allowances for food and books.
The student representative council (SRC), led by the DA Student Organisation (Daso), released R500000 from their R4-million budget to help needy students.
Eastern Cape premier Phumulo Masualle also gave more than R5-million to the university to assist starving students.
A student leader at the university, who asked not to be named, said the news was shocking.
“What this university has allegedly done is wrong and many of the students have suffered because of lack of funds. We will see what we will do about this,” he said.
The report by FastTrac – a private company appointed last year to review the institution’s financial position – said alarm bells had been sounding for the last two years.
It said the situation had “accreted over a number of years to reach this critical stage”.
“The situation is now so serious that Fort Hare could run out of money by next month.
“Unless significant additional income is received, the university will not be able to pay its R30-million monthly salaries bill or meet other payments,” the report warned.
The warning comes weeks after Tom in an interview with the Saturday Dispatch said the university’s precarious financial standing was due to student debt.
He said about 1000 students owed the university close to R67-million.
FastTrac identified weak financial controls at the university and alleged staff were manipulating the weaknesses for their own benefit.
“An academic staff member on sabbatical claimed subsistence and travel expenses for two different overseas conferences in two different countries on the same day and both claims were paid by the university,” the report revealed.
The investigation also found that some staff allegedly submitted:
lFalsified/or duplicate claims for hours worked;
lFalsified expense claims; and
lDrew full salaries despite being on permanent leave.
It also found that tax was not being deducted from salaries.
“The council and management should have realised the seriousness of the situation when reviewing the 2013 annual financial statements, which at the time showed the university’s already precarious financial position,” the report read.
Staff members, who are privy to the finances of the university, said there were times last year they were told that salaries would not be paid.
“We knew that this was going to happen and soon this historic university, which is turning 100 next year, will go under administration,” said one.
Another staffer said: “The students are ignored, the core business of the institution is ignored because the management is worried about money.
“How do you explain that money for the students is used to pay salaries? This university is going bankrupt.”
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