Page 297 - Department of Social Development Annual Report 2021

NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2021

Risks and rewards of the scholarship fund
The main risk of the scholarship arrangement is that the funds earmarked for the Social Work Scholarship
may be utilised to pay for studies other than Social Work studies. This is monitored through monthly and
quarterly reports. The main reward of this arrangement is that the Department has successfully
implemented the Scholarship programme since the 2007/08 financial year through its partnership with
NSFAS.
Administration fees paid to NSFAS

For the 2020/21 financial year, the department is required to pay an administration fee of R488 475.00 to
NSFAS. Of which, an amount of R366 356.25 was paid to NSFAS during the 2020/21 financial year. The
remaining amount of R122 118.75 will be paid to NSFAS in the first quarter of the 2021/22 financial year
after submission of a satisfactory annual report for the 2020/21 financial year.

Transactions
In the 2020/21 financial year, an amount of R19, 539 million was transferred to NSFAS for payment of
Scholarship related costs. At the end of March 2021, scholarship funds amounting to R67, 238 million were
in the bank account of NSFAS and have been recognised by NSFAS.

These funds can be reconciled based on the following:
R59, 296 million carried over from the 2019/20 financial year.
• Add: R19, 539 million transferred to NSFAS in 2020/21 for payment of scholarships.
• Add: R1, 742 million as Interest earned by NSFAS on the scholarship funds.
• Add: 2, 119 million as refunds from universities.
• Less: R19, 231 million as scholarship expenditure for the 2020/21 financial year.
• Less: R1, 035 million which was recovered by NSFAS in respect of the 2019/20 administration fees.
• Add: R4 808 million prepayments made to Universities in the 2019/20 financial year which are
already included in expenditure for 2020/21.

Implications of terminating the arrangement

Should the arrangement between the Department and NSFAS be terminated, unspent and uncommitted
funds are expected to be paid back to the Department for surrender to the National Treasury. The
Department would have to source funding to be able to administer the scholarship and pay university fees
until the programme comes to an end on March 2022

DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL REPORT 2020/21 297