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By Charmaine Ndlela
The Organisation Undoing Tax Abuse (OUTA) has released findings from a two-year investigation into corruption risks and weaknesses within the National Student Financial Aid Scheme’s (NSFAS) student accommodation programme.
The report, first released on 5 December 2023 and expanded through a broader investigation, examined several aspects of the student accommodation funding system and its management.
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According to OUTA, the investigation revealed serious weaknesses in the NSFAS accommodation funding pipeline, raising concerns about oversight, accreditation processes and the involvement of multiple intermediaries.
The organisation said the findings highlight weaknesses in accreditation inspections, procurement processes and funding arrangements involving online portal service providers and accreditation agents.
The investigation found that structural changes to the NSFAS student accommodation model introduced multiple intermediaries into the funding pipeline, creating opportunities for maladministration and corruption.
Among the findings, accreditation agents approved properties that did not comply with DHET minimum norms and standards.
In one case, a property listed as accommodating approximately 200 beds appeared to be an an ordinary three- or four-bedroom house.
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OUTA’s Executive Director of Accountability Stefanie Fick said accommodation providers were required to pay large amounts to participate in the portal system.
“Our investigation found that accommodation providers paid approximately R33 million to register their beds on the student accommodation portal,” said Fick.
“In addition, for eight months during 2025, roughly R230 million was withheld from accommodation providers to cover a so-called licence fee linked to the mandatory use of the portal.”
The report also found that some accreditation agents failed to properly inspect buildings, submitted incorrect data to NSFAS and, in some cases, awarded top grading to properties that did not meet the minimum standards prescribed by the DHET.
In several instances, accommodation providers registered a large number of beds on the NSFAS accommodation portal, after which accreditation agents certified the bed capacity and issued “A grading” ratings.
OUTA senior project manager Rudie Heyneke, who led the investigation, said the findings raise serious concerns about the credibility of the accreditation process.
“If agents are certifying properties without proper inspections or approving bed numbers that clearly do not reflect reality, then the reliability of the entire accommodation system must be questioned,” said Heyneke.
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OUTA has requested that NSFAS conduct a full audit and physical inspection of the identified properties.
The organisation also raised questions about the long-standing narrative that South Africa faces a severe shortage of student accommodation.
“If sufficient accredited beds exist but are not funded, students are being destabilised unnecessarily. Or is money being allocated to beds that only exist on paper?” the report states.
Fick emphasised that accommodation funding must provide certainty for students.
“A funded student should never start the academic year unsure where they will sleep,” said Fick.
“Student accommodation funding must deliver beds and stability. If the system creates confusion, weak verification and opportunities for abuse, it must be fixed.”
Information provided by NSFAS indicates that at several institutions the number of accredited beds exceeded the number of beds funded, raising further questions about how accommodation funding is allocated.
OUTA said it will share the report with the NSFAS board, the Auditor-General of South Africa and the Special Investigating Unit (SIU), which already has a proclamation to investigate aspects of NSFAS operations.
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The investigation also revisited earlier procurement concerns. In December 2020, four service providers were appointed to manage and facilitate the payment of student allowances.
OUTA said its earlier investigation into the tender identified irregularities in the evaluation and awarding of the contracts, findings later confirmed by an investigation conducted by Werksmans Attorneys.
OUTA noted that historically NSFAS did not manage or facilitate student accommodation, as these functions were handled by universities and TVET colleges while NSFAS was responsible only for funding.
The organisation argues that the new model opened the door to maladministration and corruption.
It also found that the management of the student accommodation portal by the four appointed service providers often resulted in late or non-payments to landlords, creating a knock-on effect.
As a result, some accommodation providers struggled to pay municipal bills and maintain essential student services such as Wi-Fi, electricity, security and cleaning services.
OUTA says reforms are necessary to ensure taxpayers’ money is used for its intended purpose providing safe and decent accommodation for students.
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OUTA said it will share the report with the NSFAS board, the Auditor-General of South Africa and the Special Investigating Unit (SIU), which already has a proclamation to investigate aspects of NSFAS operations.
The organisation is calling for stronger oversight, full transparency and urgent reforms to ensure student accommodation funding provides safe housing for students while protecting taxpayer money.