Irregularities found in appointment of NSFAS service providers

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The report by Werkmans Attorneys into allegations about the appointment by NSFAS of direct payment service providers confirmed that there were irregularities in the process. The Board of the National Student Financial Aid Scheme requested the legal firm to investigate allegations made against NSFAS CEO Andile Nongogo and about the handling of the payments bidding process.

NSFAS students we left stranded earlier this year. After disruptions of direct payments and allowances to students whose funding had been confirmed through the new direct payment system. This led to student protests at several tertiary institutions.

“We now at the stage where we have a budget of R46.6 billion in 2023 and serving a student population of 1.1 million,” says Ernest Khosa, NSFAS chairperson.

A massive sum of money has been spent every year to give poor and missing middle students a chance to access higher education. But the persistent problems in the handling of the payments led to serious questions being raised. A report by a legal firm on the selection process of the service providers shows some irregularities and that a feasibility study to justify appointing four payment service providers was not done.

“The report reveals that this seems to have been a conflict of interest in the appointment of these two service providers and it also states that the CEO appointed Dr Chero to assist in the bid process as a technical adviser this appointment was inherently incorrect as the policy does not provide for the appointment of an expert to the bid evaluation policy,” Khosa added.

The report also fingered the CEO for being in violation of the public procurement processes of NSFAS by participating in the presentations made to the bid evaluation committee by service providers.

“I want to use the word possible relationship between the CEO and the service providers, another concern from the report is the inability to conduct due diligence in appointing service providers. This clearly indicates that there was a clear relationship between the directors of the company and others and that is in short, the unfortunate findings made by the investigators,” Khosa elaborates.

The report has been submitted to the Minister of Higher Education, but NSFAS says it is seeking punitive steps following the recommendations from the investigators.

In the interim, the CEO has been asked to justify why his contract should not be ended. And the four identified service providers’ contracts have been terminated while the supply chain management policy will be reviewed.

Video: NSFAS Board briefs media on investigation outcome into service providers