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24/10/2023 13:01:01
The end of the road for NSFAS CEO Andile Nongogo
OUTA is delighted with the NSFAS board’s decision to terminate the employment of Andile Nongogo as CEO. This follows the recommendations made in a report by Werksmans Attorneys and Advocate Tembeka Ngcukaitobi, who were commissioned by the Board to investigate the allegations of irregularities with the tender process.
In August this year, OUTA warned that Nongogo should not be allowed near the public purse after our investigation into his term as CEO at the Services SETA (SSETA). Our investigation showed that Nongogo signed off on payments for goods and services delivered to SSETA as part of an extremely overpriced rebranding campaign that cost taxpayers R37 million. OUTA also reported Nongogo’s conduct to the South African Institute of Chartered Accountants (SAICA) and laid a criminal complaint with the SAPS against him relating to a tender at the Services SETA. See here.
Werksmans investigation followed on our investigation and subsequent warnings about the way in which the NSFAS direct payment scheme was implemented under Nongogo’s leadership as CEO. OUTA started exposing the irregularities as early as September 2022, and warned that the scheme is bound to not only fail, but that it will cost taxpayers millions with underprivileged students becoming the ultimate victims of an ill-conceived, corrupt system. We continued our investigation, and issued a report in February this year. See here.
Unfortunately, OUTA’s warnings were initially ignored by NSFAS as well as the Minister of Higher Education, Dr. Blade Nzimande. Instead, NSFAS threatened OUTA with legal action and refused us access to documentation regarding the tender process. The payment scheme was implemented on 30 June 2023, resulting in thousands of students not being paid their allowances.
OUTA’s findings were vindicated by the Werksmans report, which recommended that Nongogo should be fired, the contracts with the four fintech companies terminated with immediate effect and disciplinary actions started against all those involved with pushing through the direct payment system.
Nongogo’s actions at NSFAS extends beyond the implementation of the direct payment system. Under his leadership, NSFAS also appointed Futgenx Technologies (a company that previously manufactured PPE) as an Information and Communication Technology (ICT) specialist tasked with developing a student calculation tool at a cost of over R4 million. The company is closely related to Coinvest, one of the direct payment partners. The contract with Futgenx was terminated because they could not produce the goods and services required by NSFAS, yet they were still paid over R3 million.
Furthermore, Nongogo signed a lease agreement for the NSFAS head office in the Foreshore in Cape Town. According to the tender, it was supposed to be a two-year lease with an option to renew for another three years. Nongogo signed a five-year lease. The offices total 8 479 square metres and the cost over the rental period is R166.906 million, including VAT and escalations. Based on 451 employees, NSFAS will be paying an average of R74 000 per employee per year to lease this building.
It should be noted that NSFAS has cut its subsidies for student accommodation to R45 000 per student per year, leaving many students unable to afford accommodation. This while NSFAS works in lavish surroundings.
Under Nongogo’s leadership at NSFAS, a new accommodation accreditation tender also went out, and 39 companies were appointed to inspect student accommodation to make sure that it complies with DHET minimum standards. To date, only about 25 000 units have been accredited, with a need for more than 400 000 units in 2024. Some of the service providers who were appointed are closely associated with Nongogo’s tenure at SSETA. One of the companies that was awarded a tender is headed up by a senior provincial government official. OUTA’s investigation into this matter also shows that some companies who are accommodation providers, will at the same time be accommodation accreditors – a clear conflict of interest. (The OUTA report on this matter will be issued soon.)
All of the above are just some of the many reasons OUTA found that justifies Nongogo’s termination of employment, says Rudie Heyneke, OUTA’s head of investigations. “The SIU findings presented to SCOPA earlier today also confirmed the failures of NSFAS since 2017. Nongogo was appointed in December 2020 and did nothing to turn the situation around. As a matter of fact, NSFAS now finds itself in a worse position than before. He is a seasoned public official who should have protected the assets of the state, but he chose to do otherwise.”
It is OUTA’s view that Nongogo’s actions and irregular decisions caused major damage to NSFAS, as well as major upheaval for thousands of students. “The damage cannot be measured in rands and cents when it comes to students who went without allowances for weeks, were kicked out of their accommodation, went hungry and could not complete their studies,” Heyneke says.
More information
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.
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