NSFAS report is an important win for accountability

OUTA welcomes the NSFAS board’s decision to accept and implement the findings and recommendations of the Werksmans report on the NSFAS direct payment scheme. The report not only recommends that NSFAS CEO Andile Nongogo should be fired, but also that the services of the four companies allegedly handpicked by him should be terminated. 

The new payment scheme was introduced in June 2023. Coinvest Africa (registered in 2019), Tenet Technology (registered in 2013 but dormant until 2021*), Norraco Corporation (registered in 2019) and eZaga Holdings were appointed to pay allowances to NSFAS students. 

As pressure mounted from OUTA as well as students not receiving their allowances, the NSFAS board appointed Werksmans Attorneys and Advocate Tembeka Ngcukaitobi to investigate the allegations of irregularities with the tender process.

Advocate Stefanie Fick, director of OUTA’s accountability division, says OUTA is delighted that the NSFAS board is finally taking action. “Transparency is key in a democratic society. We look forward to reading the full report,” says Fick.

Fick says the report not only vindicates students who complained about the scheme not functioning properly, but also confirms OUTA’s findings of corruption and mismanagement at NSFAS. “When OUTA first exposed corruption with the awarding of tenders for the direct payment of students’ allowances, NSFAS denied the allegations and threatened legal action. This report therefore also signifies an important win for accountability and transparency. It proves yet again how important the voices of civil society are, and also explains the blatant attacks on NGOs in an attempt to silence us,” she says.

The Werksmans report not only found that there was an existing relationship between Nongogo and two of the service providers (eZaga and Coinvest Africa), but also that Nongogo participated in the procurement process, and that tender requirements were changed to allow these specific fintech companies to submit their bids.

Changing specifications resulted in “drastic changes in the mandatory requirements of the original tender”.  Changing bid specifications and cancelling a previous tender would have “required deeper analysis to be conducted”, something which was not done. The report also notes that no thorough due diligence was undertaken before appointing the service providers.

Nongogo’s action is described as “a material violation of public procurement processes of NSFAS which he was employed to safeguard and uphold”.

In addition to all of this, Nongogo also appointed Dr George Chirwa to assist the Bid Evaluation Committee as a technical advisor. “This appointment was inherently incorrect, as the 2021 SCM Policy does not provide for the appointment of an expert to the Bid Evaluation Committee (BEC),” the report states. Specific mention was made of Chirwa’s association with certain companies that were appointed as service providers, both at the Services Sector Education and Training Authority (SSETA), where Nongogo served as CEO until July 2018, and at NSFAS.

The chairperson of the NSFAS Board says the recommendations of the report will be implemented with immediate effect. Nongogo must give reasons why his services should not be terminated, while all staff members involved with wrongdoing will face disciplinary action. The contracts of the four service providers will be terminated, and NSFAS will review its Supply Chain Management Policy, in line with the National Treasury regulations and policies, and the Public Finance Management Act.

According to Rudie Heyneke, head of investigations at OUTA, the organisation had previously warned that Nongogo should not be allowed near the public purse. “Earlier this year, we also uncovered massive irregularities that took place on Andile Nongogo’s watch at the Services SETA. He is a seasoned public official and a chartered accountant who should have known better than to blatantly ignore legal prescripts,” says Heyneke.

OUTA uncovered an extremely overpriced rebranding campaign that cost taxpayers R37 million at the Services SETA. The invoices were signed off by Nongogo, who was the Services SETA CEO at the time. In June, OUTA laid criminal complaints against Nongogo and others and lodged a formal complaint against Nongogo with the South African Institute for Chartered Accountants (SAICA).

“Students suffered the most because of the irregularities that took place, yet their pleas to NSFAS fell on deaf ears, as did OUTA’s requests for access to all the relevant information. We repeatedly warned that this scheme would negatively impact on students who can least afford it, while costing the country millions if allowed to continue. Yet all attempts to share what our investigations uncovered with NSFAS or Minister Blade Nzimande were ignored,” says Heyneke.

According to Heyneke, the Werksmans report is not the solution to all of NSFAS’ current problems. “There are huge concerns regarding student accommodation and if NSFAS will be ready for the 2024 academic year,” he says.

In addition, the Special Investigating Unit is still busy with its investigation into NSFAS which could expose more irregularities. 

Fick says it is time for Nzimande to resign. “We need ethical leadership to protect the interests of our country’s youth. From what we have uncovered so far in Higher Education, it is clear that Minister Nzimande is not the right man for the job,” says Fick. 

OUTA hopes that the investigation report will also provide answers to the questions posed by the Portfolio Committee on Higher Education, Science and Innovation that were never answered by NSFAS and/or the service providers.

More information

A soundclip with comment by Rudie Heyneke, OUTA Investigations Manager, is here.

More on OUTA's work on NSFAS is here and on the Services SETA is here.

More on the criminal charges against Andile Nongogo is here.

* Note that NSFAS contractor Tenet Technology is not the same company as Tenet (Tertiary Education and Research Network of South Africa). See the court order obtained in August 2023 in the Western Cape High Court by Tenet against Tenet Technology over use of the name here.