NSFAS committed to terminating direct payment service provider contracts to streamline the student funding process and enhance service delivery.
Newly-appointed Higher Education Minister, Dr Nobuhle Nkabane says the failure of the previous National Student Financial Aid Scheme (NSFAS) board to terminate irregular contracts directly led to their termination.
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NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and TVET colleges. This includes money for tuition and registration fees as well as several allowances for food, accommodation and learning materials.
NSFAS Irregular Contracts
In 2023, NSFAS hired four service providers to manage student allowance payments. An investigation by Werksmans Attorneys revealed potential irregularities in the bidding process, raising concerns about possible ties between former NSFAS CEO Andile Nongogo and fintech companies involved in distributing the funds.
The report also highlighted the CEO’s role in evaluating bids, suggesting a conflict of interest.
Werksmans recommended terminating the contracts, a decision initially adopted by the NSFAS board but not acted upon, leading to the board’s dissolution by former Higher Education Minister Blade Nzimande. Afterwards, NSFAS began terminating the contracts.
Minister Response
Nakabane says they will work to ensure the implantation of the Werkmans report.
The first one is the inability of the NSFAS to fully implement the recommendations of the Werksmans report, including the termination of the contract of the direct payments that it provides to those who had been appointed irregularly.
In June, the Western Cape High Court allowed NSFAS to proceed with the Werksmans report recommendations, dismissing a challenge from eZaga Holdings. However, a recent court ruling restored eZaga’s contract.
NSFAS argues this ruling only pertains to actions taken post-report and is appealing the decision while pursuing the case at the Special Tribunal to void the contracts over procurement irregularities.
“I am committed to addressing Werkmans in the report, and as such employees who are implicated in wrongdoing will face consequences within our processes, including criminal charges.”
NSFAS and the SIU have applied to the Special Tribunal to declare the contracts invalid.
The termination of a service provider’s contract is a matter before our legal system, and it is best to leave it to the courts for education.
NSFAS Administrator
NSFAS administrator Freeman Nomvalo says the scheme will continue its efforts to terminate the service provider contracts.
We have responded in response to the challenge, that, interdicted, which we had lost in July, and we are appealing we are appealing that process and the process is underway.
They added that employees implicated in wrongdoing will face appropriate disciplinary action.
“As it relates to the disciplinary process of the employee, the CEO is not with us and the CFO. The other employees even reported was, the level of capability of the rest of the employees was not as severe as part of the CFO as well as the CEO.”