Billions stolen from students’ loans board

Dar es Salaam. Education minister Joyce Ndalichako yesterday ordered a special audit into operations of the Higher Education Student’s Loans Board (HESLB) and gross irregularities in the release of Sh3.2 billion in student’s loans.

The minister directed Chief Government Internal Auditor to verify all reports and documents the board had filed to the ministry and conduct a special audit starting from 2013.

“My ministry has realised that there is unsatisfactory performance in this institution which has many recurrent problems,” said the minister.

Yesterday, the minister announced she was sacking HESLB executive director George Nyatega and suspended three other directors to pave the way for investigation into alleged rot. Mr Nyatega’s two years’ employment contract with the agency was to end in August. Suspended officials are: director of Finance and Administration Yusuf Kisare, director of Loan Repayment and Recovery Juma Chagonja and director of Loan Allocation and Disbursement Onesmo Laizer.

Gross irregularities

Yesterday the minister revealed shocking details of how the officials allegedly swindled hundreds of millions of shillings in false loan disbursement including double allocation and allocation of loans to non-existing students. It was revealed, for instance, that some Tanzanian students pursuing studies in Algeria continue to receive loans three years after their loan contract had expired.

A special audit carried out by government chief internal auditor in 2013 has also exposed massive weaknesses in management of fund set for student loans.

The audit revealed that some 343 students who were not registered in any institution were paid Sh342.4 million.

The review also discovered that a total of Sh136.2 million was dished out to 55 students who had dropped out of university while some 54,299 students were allocated loans which they never applied for. Prof Ndalichako also revealed that Sh207 million which were never collected by students from six higher learning institutions were never returned to the Board.

A total of 77 students were allocated loans worth Sh123 million and Sh467.6 million as local and foreign students respectively.

The HESLB official allegedly allocated Sh1.3 billion to 169 students who used two different institutions to secure loans for consecutive two academic years.

The suspended officials allegedly paid. Sh173.6 million in loans to unregistered students. She further said that some 19,343 students received cash before their application for loans were approved by the loan committee, contrary to the Loan Regulations Act Number 8.

“Despite these massive shortcomings, the board gave no answers to the queries to the government’s chief internal auditor until January when it was ordered by the ministry to do so,” said the minister.

HESLB has maintained in its reply to the queries that the audit report by the government chief internal auditor did not meet standards, arguing that the auditor delved too much into operational audit, “work that was supposed to be done by the board’s internal auditor.”

Said Prof Ndalichako: “Loans to students have always been delayed without any justification to the extent that learners have created an impression that they cannot receive the cash they are entitled to unless they stage a protest march to the ministry.

“Therefore, the problem is not lack of funds but negligence of HESLB officials in allocating loans to students on time.”

The rot in the HESLB as exposed by the minister yesterday explains why there have been endless riots and clashes between students pressing for loans and the police every time loans release time comes.

There have also been calls for dissolution of the HESLB over delays in the release of loans, poor record-keeping and scandalous loan recovery process and general incompetence manifested by the management.

In 2012, an accountant with the HESLB, Esther Budili, was charged with nine counts including that of forgery and stealing Sh 90.7 million from her office.

Ms Budili allegedly included fictitious names of students into a loan disbursement schedule for the University of Dar es Salaam, Mzumbe, Bugando, Tumaini, KCMC, Institute of Social Works and Dar es Salaam University College of Education (Duce).