Nzimande demands NSFAS action amid tender scandal
The higher education minister sets a tight deadline for the NSFAS board to detail their plan to fix allowance payment issues
Higher education minister Blade Nzimande has given the board of the National Student Financial Aid Scheme (NSFAS) until August 30 to tell him how they plan “to correct all the challenges” around the direct payment system of allowances to beneficiaries.
Nzimande’s statement follows the board’s decision to give CEO Andile Nongogo leave of absence after allegations made against him while he was at the helm of the Services Sector Education and Training Authority (Seta).
The NSFAS board said on Wednesday that over the past few weeks, several allegations had been levelled against Nongogo.
“The allegations relate to his work with the Seta and how this may relate to unacceptable conduct in the awarding of bids at NSFAS. While the board recognises that, in the main, the allegations stem from activities in another organisation, it views them in a serious light.”
Nzimande’s spokesperson, Ishmael Mnisi, said in a statement on Wednesday night that the minister had noted the board’s decision to place Nongogo on leave of absence “while investigating allegations surrounding the appointment of service providers to manage the direct payment solution on behalf of NSFAS”.
“Notwithstanding the current challenges, the minister is of the view that the direct payment solution is a necessary measure to reduce instances of unauthorised access to beneficiaries’ allowances, payment of ghost students, inconsistencies and delayed payments of allowances.
“The minister emphasised that the direct payment solution is in line with the student-centred model, which NSFAS adopted.”
Controversial contract under scrutiny
The Sunday Times reported at the weekend that a director of Coinvest Africa, Tshegofatso Ntumba, landed a R29m deal with Seta in 2018 to supply promotional items at grossly inflated prices.
Nongogo was the CEO of Seta at the time, while Ntumba was involved as director of the company Star Sign and Print.
Coinvest Africa is one of four companies awarded contracts by NSFAS to make direct payment of allowances into students’ bank accounts.
This system has been roundly condemned by students, who recently marched to the Union Buildings in Pretoria to voice their dissatisfaction.
[T]he minister is of the view that the direct payment solution is a necessary measure to reduce instances of unauthorised access to beneficiaries’ allowances, payment of ghost students, inconsistencies and delayed payments of allowances.Ishmael Mnisi, spokesperson forBlade Nzimande
On Wednesday, students from Stellenbosch University and the University of the Western Cape (UWC) marched to parliament in Cape Town demanding the system be scrapped.
The R29m deal was first exposed by the Organisation Undoing Tax Abuse (Outa), which released an update of its October investigation into NSFAS’ direct payment system recently.
Among the goods Star Sign and Print provided were 20,000 exam pads at a unit cost of R214, which, according to Outa, retail for about R21.
In its updated report, Outa made several findings, which included that the four companies are not registered financial service providers (FSPs) and are relatively new firms with “very little proof of experience as fintech companies”.
It also found that after negotiations with the service providers, NSFAS agreed to a monthly fee of R102.35 on students’ bank accounts, but decreased the monthly fee to R29 and eventually R12.
While NSFAS refused to divulge how much the contracts awarded to the four service providers are worth, each company is expected to make about R330m over five years, according to calculations by the Sunday Times.
Meanwhile, according to the NSFAS statement, the scheme said it ran an almost R50bn budget, “which services young people from poor and working-class backgrounds”.
“This is no small task, as it has an impact on skills development and consequently the economic development of our nation. The board believes in executing this responsibility, public trust is of paramount importance.”
It said that “in the interest of the image of NSFAS, the board has resolved to investigate the allegations with a particular focus on the direct payment project”.
CFO Masile Ramorwesi will act as CEO until further notice.
NSFAS said the investigation “is no pronouncement of guilt against the CEO, but an objective effort to determine the veracity of the allegations”.
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