The Special Investigating Unit (SIU) has written a letter demanding that Motheo Technical, Vocational, Education and Training (TVET) College in Bloemfontein pay back R44.6-million it owes to the National Student Financial Aid Scheme (NSFAS).
This sum includes interest on funds that were donated to the college as bursaries to students between 2017 and 2022 but were never utilised.
The demand letter was sent to the troubled college by the SIU on May 16 and was addressed to Professor Dipeloane Phutsisi, the principal of Motheo College.
NSFAS provides financial aid to eligible students and transfers the funds to the college of their choice; however, the funds must be returned if the student does not register.
The college retained the money in its coffers, though.
Debt balloons to R44.6-million
Following the discovery of the retained funds by the SIU’s elite investigative unit, Motheo signed an acknowledgement of debt with the agency in 2023.
Although the college committed to repaying R38.7 million at the time, it did not fulfil its end of the agreement.
As a result, interest-related debt ballooned to over R44.6 million.
Phutsisi had promised to reimburse the money on the college’s behalf, but she was unable to do so as well, which is why the demand letter was sent out in May.
“The SIU acts herein on behalf of NSFAS under proclamation number R88 of 2022, having been duly authorised by the president of the Republic of South Africa to investigate as per proclamation,” said the SIU.
“During the month of September 2023, you signed an acknowledgement of debt, wherein you consented to liability for the Motheo NSFAS debt in your personal capacity.
“Further, you personally undertook to pay interest at the prescribed rate in terms of Section 80[1][b] of the Public Finance Management Act.”
Phutsisi was also informed by the elite unit that the debt had increased to more than R44-million.
Cash flow challenges
Sunday World has discovered that the college is losing money and cannot afford to pay its employees. At the time of printing, teachers had not yet received their May salaries.
Phutsisi wrote to the teachers on May 29 to let them know that due to “cash flow challenges”, there was not enough money to pay them.
“Please be informed that due to unforeseen cash flow challenges, delays in receivables and operational adjustments, there will be a delay in the disbursement of this month’s salaries. We are actively working to resolve the situation,” wrote Phutsisi.
SIU spokesperson Kaizer Kganyago said: “We can confirm that Motheo TVET College made some payments towards what is owed. The SIU is consulting internally to determine the way forward.”
When approached for comment, Phutsisi threatened legal action against Sunday World.
“Who is your source? Please note that you have no permission from the institution to publicise this misleading information. The college lawyers will meet you in court,” said Phutsisi.
