THE government was prejudiced of at least M12 million over three years through the mismanagement of funds earmarked for student bursaries, the latest report of Auditor-General reveals.
The student bursaries are administered by the National Manpower Development Secretariat (NMDS).
The Loan Bursary Fund for students at tertiary institutions was established in 1978 to “provide a revolving fund from which assistance can be given to Basotho to further their education on a partial repayment basis”.
However, the latest ‘Report of the Auditor-General on the Consolidated Financial Statements of the Government of Lesotho’ for the year ending 31 March 2016, notes serious irregularities including inadequate controls and weak management of the fund”.
“The fund regulations require the Director of NMDS to submit the accounts of the fund to the Accountant-General after the close of each financial year or not later than three months thereafter.
“That has not been the case as over the years and the NMDS has neither prepared the financial statements nor prepared any bank reconciliation statements, but rather opted to submit unreconciled balances to the Accountant-General for consolidation to the government financial statements. Non-preparation of financial statements compromises accountability and transparency of the fund,” the Auditor-General’s report states.
As a result of the weak management systems, the Auditor-General notes that more than M12 million was lost through malpractices that included overpayments as well as payments to former students who had already graduated in the three years up to 2013.
In one instance in September 2013, the NMDS paid M20 889 460 to Lerotholi Polytechnic for books and accommodation, but the amounted included an overpayment of M1 879 290 which was for 186 former students who had already completed their studies.
In the same year in July 2013, NMDS made an advance payment of M6 340 708 to Lerotholi Polytechnic for two months living allowances and books.
This amount included an overpayment for 23 students totalling M178 919. 18 of the students were paid M7 953 twice while five were paid M6953 twice.
In 2012/2013, the National University of Lesotho (NUL) made an advance requisition for food, books and rent allowances amounting to M38 037 240 in the first semester for 5561 students.
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However, instead of the requested amount, NUL received M38 174 040 resulting in an overpayment of M136 800.
“NMDS paid an advance of M19 287 010 for NUL first year allowances instead of M10 684 080.
“Further investigations reveal that from the overpayment of M8 602 930, M6 619 505 was for two months food allowance instead of M2 499 200 (M1600 each for 1562 students),” the Auditor-General notes.
The report further states that NMDS went on to issue several instruction letters to banks to pay allowances to students from different institutions and it was discovered that 74 of them were paid more than once, resulting into an overpayment of M157 497.50.
The mismanaged funds add up to more than M12 million, the report says.
The report none-the-less indicates that NMDS admitted some of the mistakes and dismissed the responsible officers from the public service.
Legal action was also pursued against the offenders, the report says.
However, the report does not say whether the money was ever recovered.
The issue of student loans has proved to be thorny with students often staging violent strikes to protest late payments of the bursaries and the fact that they are inadequate for their needs.