FUNDING AND PAYMENTS UPDATE - PRESENTATION TO THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING

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FUNDING AND PAYMENTS UPDATE - PRESENTATION TO THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING
FUNDING AND PAYMENTS UPDATE
PRESENTATION TO THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING
                                30th May 2018

                                                                           1
FUNDING AND PAYMENTS UPDATE - PRESENTATION TO THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING
PCHET Presentation Outline

                 1       Context

                           2   2017/2018 Payments

                               3 2018 Upfront Payments

                               4   Student Centred Model Roll Out

                           5    Road to Disbursements

                     6    Appendices
                                                                    2
2017/2018
PAYMENTS

             3
UPFRONT PAYMENTS

2017/2018 Payments

                                          UNIVERSTITIES

 PROVISIONAL ALLOCATION                                   R9,302,663,000

 1ST UPFRONT PAYMENT (30%) – APRIL 2017                    2,790,799,000

                                             TVETS

 PROVISIONAL ALLOCATION                                   R2,437,620,000

 1ST UPFRONT PAYMENT (30%) – APRIL 2017                    R731,286,000

 2ND   UPFRONT PAYMENT (15%) – AUGUST 2017                 R338,591,932

 TOTAL (45%)                                              R1,069,877,932

                                                                           4
2018
Upfront Payments

                   5
ROAD TO DISBURSEMENTS

NSFAS Progress on processes leading to disbursements – 28 May 2018
                                       FTENS                     SENIOR                    TOTAL
             UNIV                      209 624                       49 950               259 574
             TVET                      154 639                       3 071                157 710
            TOTAL                     364 263                        53 021               417 284

                      APPLICATIONS SUMMARY                                   UNIVERSITY      TVETS
                                     TOTAL APPLICATIONS RECEIVED              259 574       157 710

    REJECTIONS; MISSING INFORMATION & PENDING REJECTIONS

                                            REJECTED, WITHDRAWN                13 606         1 397
                         PENDING REJECTIONS (INCOME INELIGIBILITY)             21 706         3 204
                    OUTSTANDING SUPPORTING DOCUMENTS (PARENTS
                                                                               12 558         5 970
                                     CONSENT, APPLICANT ID, ETC)

                                          TOTAL                                47 870        10 571

                           MEET NSFAS FUNDING CRITERIA                         211 704       147 139
                                            FUNDING & CONTRACTING

                    BURSARY - REGISTRATION MATCH                              81 402        69 264

                     *CONTRACTS (NBA) GENERATED                               64 486        47 903

                                *CONTRACTS SIGNED                             45 338        15 348
                                                                                                       6
UPFRONT PAYMENTS

      2018 Disbursement of Upfront Payments
      Universities and TVET’s view of three upfront payments made in 2018 – This enabled institutions to receive funding which NBA was being formalized

        UNIVERSTITIES

        PROVISIONAL ALLOCATION                                                                                                 16,426,000,000

        1ST UPFRONT PAYMENT (9%) – 26/01                                                                                        1,547,991,750

        2ND     UPFRONT PAYMENT (7%) – 20/03                                                                                    1,080,168,250

        3 RD U P F R O N T P A Y M E N T ( 1 4 % ) – 0 2 / 0 4                                                                  2,299,640,000

        TOTAL (30%)                                                                                                            4,927,800,000

        TVETS

        PROVISIONAL ALLOCATION                                                                                                  5,164,002,000

        1ST UPFRONT PAYMENT (7%) – 26/01                                                                                          386,850,300

        2ND     UPFRONT PAYMENT (11%) – 20/03                                                                                     542,670,060

        3RD UPFRONT PAYMENT (12%) – 02 /04                                                                                        619,680,240

        TOTAL (30%)                                                                                                           1,549,200,600

NB. Options presented for 4th Advance remittance payment (Payment to be made as long as costs per student are provided by institution or
provisionally funded student list to be used to calculate 40% to institutions                                                            7
UPFRONT PAYMENTS

      2018 Disbursement of Upfront Payments – Issues and Actions
      Universities and TVET’s issues experienced and mitigating actions

   ISSUES

     STUDENTS ALLOWANCES – Whilst a portion of upfronts is paid towards student fees, another fraction was allocated towards
      allowances for funded students. However, some institutions may have not allocated allowances into students accounts and this
      may relate funding decisions communication misalignment between NSFAS and institutions

     sBux – NSFAS disburses directly to 18 institutions and has paid upfront allowances to institutions and students. To this end,
      NSFAS paid monies in relation to student who applied to NSFAS directly and whose admission / registration information has been
      confirmed by the institutions

     Data Exchange which includes admission, academic and registration data has been the major hurdle in the disbursement
      processes together with the recreation of a new bursary agreement. To this end, we cannot confirm who exactly has received
      allowances and who hasn't

NB. Options presented for 4th Advance remittance payment (Payment to be made as long as costs per student are provided by institution or
provisionally funded student list to be used to calculate 40% to institutions)                                                           8
UPFRONT PAYMENTS

      2018 Disbursement of Upfront Payments – Issues and Actions
      Universities and TVET’s issues experienced and mitigating actions

    ACTIONS

       CIRCULAR 19 – NSFAS has issued out Circular 19 requesting institutions to submit detailed allocation of allowances into students’
        accounts.

       RECONCILLIATION – NSFAS requires institutions to submit remittances indicating how upfront payments was allocated into student
        accounts. This information is required to reconcile NSFAS internal systems before automated disbursements starts;

      •   4th Upfront Payment to both Institutions and sBux linked organisations - NSFAS has made fourth upfront available to institutions on
          request. Institutions are required to submit remittance to NSFAS to unlock the upfront– 50% of the provisional allocation;

      •   Data Exchange - DHET Development Support and NSFAS Servicing teams are working with institutions to encourage data exchange
          which will inform funding decisions, movement of funds

NB. Options presented for 4th Advance remittance payment (Payment to be made as long as costs per student are provided by institution or
provisionally funded student list to be used to calculate 40% to institutions)                                                           9
UPFRONT PAYMENTS

2018 Disbursement of Upfront Payments - sBux
Universities and TVET’s view of sBux upfront payments made in 2018

 PROGRESS

   The following upfronts were made to sBux institutions (TVETs and Universities)

                    “ftens”                                      # students         RAND VALUE

   UNIVERSITY                                                      34 893            98 687 592

   TVETS                                                           16 237            15 314 698

                “RETURNING”                                      # students         RAND VALUE

   UNIVERSITY                                                      27 411           124 126 522

   TVETS                                                             2 796           3 361 324

                                                                                                  10
UPFRONT PAYMENTS

2018 Disbursement of Upfront Payments - sBux
Universities and TVET’s view of sBux upfront payments made in 2018

 ISSUES

    This is to ensure that students receive the correct amounts in lieu of the recently instituted notional allowances.
     Our systems are under pressure

    Manual process impacting speed of disbursement ;

 ACTIONS

    NSFAS is transitioning into the automated sBux disbursement process for FTENs and Senior students that
     have signed contracts and Returning students from whom registration has been confirmed. This will mitigate the
     identified issues;

                                                                                                                           11
Student Centred
 Model Roll Out

                  12
NSFAS Student Centered Model Roll Out

              Challenges

     Key bottlenecks in NSFAS process relate to case management (checks on
     documents submitted by students), registration handler (processing of registration
     data, linking to provisionally funded lists) and bursary creation (In phoenix).

     Capacity and processing capability of NSFAS ICT systems.

     Due to sBux payments being made outside the systems, reconciling these back into the
     system is a challenge. Only once this process is complete, then funds can be
     disbursed (To avoid overpayment risk).

     Major dependency on students to sign SOPs, which emphasises that the SOP needs to
     reach the students as soon as possible in
     order to increase the chances of the SOP being accepted by the student
                                                                                            13
NSFAS Student Centered Model Roll Out (Continued)

               Challenges

   Although NSFAS progressively paid institutions upfront payments in excess of
   R6 billion to date, data exchange challenges prevented the generation of SOPs
   and institutions could not be provided with payment remittances by NSFAS.

   One consolidated view of data was required – Registration Data, data
   exchange, eligibility assessments, NBA generation, payment and remittances,
   2017 Close out..

    Major dependency on students to sign SOPs, which emphasises that the SOP
    needs to reach the students as soon as possible in
    order to increase the chances of the SOP being accepted by the student

                                                                                   14
NSFAS Student Centered Model Roll Out (Continued)

                   The way forward

  Option for manual NBA claim process considered but not likely as 50% NBA’s already generated

   TVET Task team has amended original template for data collection to align with NSFAS
   data requirements and ensure correct portal uploads. Amended template referred to as
   registration declaration (Requiring sign off by TVET CFO and Principal to verify validity of
   data submitted)

   Circular 17 addressed data exchange for 2017 close out and 2018 registrations. Credit
   committee to approve ineligible rejection messages for those above income threshold.

                                                                                                  15
NSFAS Student Centered Model Roll Out
                  The way forward

   Registration data categorised per FTEN’s, Seniors and returning. Proposed
   improvement – no more means test during evaluation phase (On-board)

   Follow up with institutions regarding missing academic results. Finalize funding
   decisions (Credit committee to meet regarding this). Resolve outstanding data
   exchange issues (plans in place to achieve this). Disbursement can only
   conclude end July 2018 due to process and system limitations

   Institutions to implement measures to ensure that students accept the
   NBA’s/SOP’s (Refuse payment of allowances without NBA’s/SOPs being signed,
   refuse re-registration in Semester/Trimester 2, non-admission to
   Tests/Examinations)
   Payment reconciliation programme to be formalized to address upfront and sBux
   payments made and the recon of these payments

                                                                                      16
Key          Work in
TASK TEAM SUMMARIES                                                                               Key      Progress     Progress
                                                                                                                                    At Risk

NSFAS Progress on Task Team requirements
The following is a view on the progress made on the original ask from the DHET Task team:

                                                           Task Team Intervention

Student funds disbursed successfully                                                          Integration of registration & Funding Data

Students immediately receive confirmation of                                                Bursary agreements can be generated and
their funding                                                                               signed as a matter of urgency
                                                               Task Team Ask
                                                                  & NSFAS
                                                                 Response

                                                                  RAG Status

                                                                                                                                              17
Road to
Disbursements

                18
2018 Applications – Matters being dealt with…
 2016/2017 – To finalize the signing of LAFSOP’s and disbursing to institutions, we are continuously communicating with institutions and
  students with regards unsigned LAFSOP’s. We have set a deadline of 30th May 2018 for finalizing this process. There are data issues
  that are being attended to as part of action plans.

 CAT 2 APPLICATION PROCESSING - Real time validation and evaluation is being conducted. Rejections are being reviewed through
  the credit committee process. This will trigger the appeals process which will then be dealt with accordingly (Deadline 30th Jun for
  rejections and 31st Jul for appeals).

 CONTINUING STUDENTS - Generating loan accounts and disbursement accounts for returning students that have been successfully
  migrated, funded and for whom registration has been received (30th May deadline to complete).

 DISBURSEMENTS - NSFAS is ready to kick start the automated disbursement process. Finalizing remittance reports to institutions
  (Deadline is 31st May). 4TH upfront payment available to institution on condition that they share data on who was paid at the back of the
  first set of upfront payments. Disbursement via sBux continue as and when data matching takes place

 COMMUNICATION - We are in the process of communicating to students that are provisionally funded to inform them of the availability
  of the contract (Ongoing). We are responding to student queries via the contact centre and we are engaging our stakeholders via social
  media and guiding the contracting process by engaging with key role players. Engagement with DHET to assist in aligning institutions
  and NSFAS to ensure that NSFAS can contract with students and disburse to them (Deadline 31st May)

 NSFAS BURSARY AGREEMENT – We are generating NSFAS Bursary Agreements (NBA) for FTEN’s and senior students. This will
  enable appropriate disbursements to students. We have set a signing deadline of 31st July for all NBA’s that are issued. after 31 July
  deadline, students with non-signed NBAs will be unfunded.

 Onboarding Standard Bank as a disbursement partner to pick up the load going into 2019. with this intervention we are leveraging
  the robust South African Financial Services Systems                                                                              19
THANK YOU

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