Home Education NSFAS Terminates Contracts for Payment Service Providers

NSFAS Terminates Contracts for Payment Service Providers

by Central News Reporter
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NSFAS Board Chairperson Ernest Khosa

NSFAS

The National Student Financial Aid Scheme (NSFAS) board has made the decision to terminate the contracts of all four direct payment service providers responsible for disbursing allowances to NSFAS students.

NSFAS

NSFAS

This decision follows the adoption of recommendations from a report that investigated allegations of irregularities in the appointment of these service providers.

The NSFAS board says it is committed to ensuring that this termination does not negatively impact students.

According to Board chairperson Ernest Khosa, the board will take into account both the law and the implications for service delivery in its next steps.

ActionSA Takes Legal Action Against NSFAS for Dubious Awarding of Direct Payment Contract

To conduct the investigation into the allegations, the board enlisted the services of Werksmans Attorneys and Advocate Tembeka Ngcukaitobi.

The investigation focused on Bid NO. SCMN022/2021 and looked into allegations of conflict of interest concerning the appointment of service providers, specifically targeting NSFAS CEO Andile Nongogo.

After considering the findings and recommendations presented by the investigators, the board has adopted their recommendations and plans to implement them.  Khosa further stated that the board met with Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, to brief him on the investigation’s outcome.

The investigation relied on both documentary evidence and interviews to establish its findings.

The letter containing the report was given to Nongogo, and the board also met with the representatives of the four direct payment service providers to discuss the report’s content and implications.

Even though there have been challenges, the board reaffirmed its commitment to implementing the direct payment solution. This solution aims to reduce unauthorized access to beneficiaries’ allowances, eliminate ghost students, and address inconsistencies and delayed payments.

The direct payment solution aligns with the Student-Centered Model adopted by NSFAS.

It was noted that there was no feasibility study conducted before implementing the current direct payment system. Failure to conduct such a study means there was no evaluation of the proposed solution’s viability and chances of success.

Khosa underlined the importance of conducting feasibility studies for informed decision-making.

The report revealed that Nongogo participated in the presentation of proposals to the Bid Evaluation Committee (BEC), which constituted a material violation of NSFAS’s public procurement processes.

Furthermore, there appeared to be a conflict of interest in the appointment of the four fin-tech service providers.

The report also highlighted Nongogo’s appointment of Dr. Chirwa as a technical advisor to the BEC, which was not in line with the 2021 Supply Chain Management (SCM) Policy. Although the 2023 SCM Policy allowed for such appointments, it was seen as a means to rectify the incorrect appointment.

Dr. Chirwa’s association with certain companies appointed as service providers raised concerns. These companies include eZAGA Holdings (with eZAGA Remit as a subsidiary), Africawide Consulting (Pty) Ltd, and Africawide Foundation. The report suggested a possible relationship between Nongogo and Coinvest and eZaga Holdings.

As a result of these findings, the NSFAS board has decided the following actions:

1. The board will write to CEO Andile Nongogo, giving him an opportunity to provide reasons why his contract should not be terminated.

2. Staff members implicated in the report will be subjected to a disciplinary inquiry.

3. The contracts of the four direct payment service providers will be terminated. The board will ensure that this termination does not negatively impact students.

4. The SCM Policy will be reviewed in accordance with National Treasury Regulations and Policies, including the PFMA.

Khosa affirmed that all decisions made by the board will be implemented progressively, starting from October 18, 2023.

 

NSFAS CEO Andile Nongogo Suspended Amid Allegations of Involvement in Selecting Direct Payment Partners

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