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The National Student Financial Aid System (NSFAS) has launched an investigation into the legitimacy of payments made to thousands of individuals who have failed to provide proof that they are students at Technical and Vocational Education Training (TVET) Colleges.
NSFAS is the government’s key agency for providing financial support to eligible students to study at tertiary education institutions and has been dogged by controversy for years. It was placed under administration between 2018 and 2020, and more recently rocked by corruption allegations levelled against former CEO Andile Nongogo and former chairperson Ernest Khosa.
Former higher education, science and technology minister Blade Nzimande placed NSFAS under administration again in April, after it failed to implement the recommendations of law firm Werksmans and terminate its contracts with four fintech companies that had been awarded tenders to make direct payments to students.
NSFAS recently asked TVET college students who were approved beneficiaries to provide their banking details, in preparation for paying their allowances to them directly instead of via intermediaries, administrator Freeman Nomvalo said on Tuesday.
But it received no response from 6%, or 11,000, of the people it sought to contact and faced no complaints when payments ceased, raising the possibility that these people were not students, he said. NSFAS had gone to great lengths to try to get students to provide their banking details, including sending text messages, asking TVET college financial aid officials to help track them down and enlisting the assistance of student organisations, he said.
Direct payments from NSFAS to TVET college students’ bank accounts cost just R1 per transaction, compared to R22 per transaction when fintech companies had been involved, Nomvalo said.
The four fintech companies — Coinvest, eZaga, Noracco and Tenet Technology — were awarded direct payments contracts valued at R47m over a five-year period. They successfully challenged NSFAS’s recent move to terminate their contracts in the Western Cape High Court, but that decision has been suspended pending the outcome of NSFAS’s application for leave to appeal.
NSFAS had also started a review of the contracts awarded for the provision of student accommodation, Nomvalo said.
“I have serious reservations that stem mainly from the fact that the value derived from (the) service is at best is questionable. This is aggravated by the alleged flaunting of the procurement process, the envisaged profit-sharing model and security risk,” he said.
In a separate development, the African Transformation Movement (ATM) announced that the public protector had referred its complaint of alleged embezzlement against Nzimande and Khosa to the Special Investigating Unit (SIU).
The party referred to correspondence sent to it by the executive director of investigations at the public protector, Ponatshego Mogaladi, a week ago.
The office of the public protector also wrote to AfriForum last week, informing the civil liberties group that it also had referred its complaint of alleged corruption levelled against Nzimande and Khosa to the SIU.
Nzimande is now minister of science & technology.
The ATM welcomed the public protector’s decision, saying it affirmed its commitment to fighting corruption and holding people entrusted with public funds accountable.
“The ATM has long called for transparency and integrity within NSFAS, and this referral represents an important step towards uncovering the truth and securing justice for the students and families affected by the mismanagement of funds,” it said in a statement.
“It is important that the SIU act with the utmost urgency ... The future of our nation’s students depends on the integrity of institutions like NSFAS, and it is essential that those responsible for any wrongdoing are brought to book swiftly.”
The SIU is already investigating alleged corruption, maladministration and mismanagement of funds at NSFAS. It announced on July 18 that it had signed acknowledgment of debt agreements with 421 students who did not qualify for support from NSFAS but had collectively received more than R112m.
It has also been clawing back money from universities and technical and vocational education colleges that received over-payments.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
NSFAS to probe payments to ghost students
The National Student Financial Aid System (NSFAS) has launched an investigation into the legitimacy of payments made to thousands of individuals who have failed to provide proof that they are students at Technical and Vocational Education Training (TVET) Colleges.
NSFAS is the government’s key agency for providing financial support to eligible students to study at tertiary education institutions and has been dogged by controversy for years. It was placed under administration between 2018 and 2020, and more recently rocked by corruption allegations levelled against former CEO Andile Nongogo and former chairperson Ernest Khosa.
Former higher education, science and technology minister Blade Nzimande placed NSFAS under administration again in April, after it failed to implement the recommendations of law firm Werksmans and terminate its contracts with four fintech companies that had been awarded tenders to make direct payments to students.
NSFAS recently asked TVET college students who were approved beneficiaries to provide their banking details, in preparation for paying their allowances to them directly instead of via intermediaries, administrator Freeman Nomvalo said on Tuesday.
But it received no response from 6%, or 11,000, of the people it sought to contact and faced no complaints when payments ceased, raising the possibility that these people were not students, he said. NSFAS had gone to great lengths to try to get students to provide their banking details, including sending text messages, asking TVET college financial aid officials to help track them down and enlisting the assistance of student organisations, he said.
Direct payments from NSFAS to TVET college students’ bank accounts cost just R1 per transaction, compared to R22 per transaction when fintech companies had been involved, Nomvalo said.
The four fintech companies — Coinvest, eZaga, Noracco and Tenet Technology — were awarded direct payments contracts valued at R47m over a five-year period. They successfully challenged NSFAS’s recent move to terminate their contracts in the Western Cape High Court, but that decision has been suspended pending the outcome of NSFAS’s application for leave to appeal.
NSFAS had also started a review of the contracts awarded for the provision of student accommodation, Nomvalo said.
“I have serious reservations that stem mainly from the fact that the value derived from (the) service is at best is questionable. This is aggravated by the alleged flaunting of the procurement process, the envisaged profit-sharing model and security risk,” he said.
In a separate development, the African Transformation Movement (ATM) announced that the public protector had referred its complaint of alleged embezzlement against Nzimande and Khosa to the Special Investigating Unit (SIU).
The party referred to correspondence sent to it by the executive director of investigations at the public protector, Ponatshego Mogaladi, a week ago.
The office of the public protector also wrote to AfriForum last week, informing the civil liberties group that it also had referred its complaint of alleged corruption levelled against Nzimande and Khosa to the SIU.
Nzimande is now minister of science & technology.
The ATM welcomed the public protector’s decision, saying it affirmed its commitment to fighting corruption and holding people entrusted with public funds accountable.
“The ATM has long called for transparency and integrity within NSFAS, and this referral represents an important step towards uncovering the truth and securing justice for the students and families affected by the mismanagement of funds,” it said in a statement.
“It is important that the SIU act with the utmost urgency ... The future of our nation’s students depends on the integrity of institutions like NSFAS, and it is essential that those responsible for any wrongdoing are brought to book swiftly.”
The SIU is already investigating alleged corruption, maladministration and mismanagement of funds at NSFAS. It announced on July 18 that it had signed acknowledgment of debt agreements with 421 students who did not qualify for support from NSFAS but had collectively received more than R112m.
It has also been clawing back money from universities and technical and vocational education colleges that received over-payments.
kahnt@businesslive.co.za
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