NSFAS: Report confirms irregularities in appointment of service providers

Following a scathing report into the alleged involvement in the appointment of service providers for the direct payment system, the National Students Financial Aid (NSFAS) Board has given its CEO Andile Nongogo seven days to explain why he should not be fired.

Board chairperson, Ernest Khosa, revealed this during a media briefing on Wednesday to publicly release the outcome of the investigations into allegations on the appointment of the direct payment service providers.

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OUTA INVESTIGATION EXPOSES NSFAS CEO

As previously reported by The South African, an investigation by the Organisation Undoing Tax Abuse (OUTA) on the NSFAS direct payment tender and relationship between NSFAS CEO Andile Nongogo and Coinvest revealed that well-established banks applied three times to handle the direct payment system into students’ own bank accounts but were not considered.

The report further revealed that the four companies awarded with the tender to handle the direct payment system for NSFAS were not registered as financial services providers. Ezaga Holdings – held an affiliated banking licence with Access Bank. A banking licence or affiliation with a bank with a banking licence was a compulsory bid requirement. Two of the successful bidders, Norraco Corporation and Tenet Technology, were also not registered as VAT vendors when they submitted their tenders.

Following the new payment system, students across the country were up in arms as many could not access their funds and many complained about the exorbitant charges for transactions.

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Werksmans Attorneys and Advocate Tembeka Ngcukaitobi were then appointed to conduct an investigation into the allegations of irregularities relating to Bid NO. SCMN022/2021. 

REPORT FINDS CEO VIOLATED PUBLIC PROCUREMENT PROCESSES

During the briefing, NSFAS Board chairperson Khosa revealed that the report established that Nongogo actively participated in the presentation to the Bid Evaluation Committee (BEC) of proposals by service providers.

Khosa said that this is a material violation of the public procurement processes of NSFAS, which he was employed to safeguard and uphold.
Furthermore, the report revealed that there was a conflict of interest in the appointment of these four fin-tech service providers.

“The report also states that the CEO appointed Dr Chirwa to assist the BEC as a technical advisor. This appointment was inherently incorrect, as the 2021 SCM [Supply Chain Management] Policy does not provide for the appointment of an expert to the Bid Evaluation Committee (BEC).

“The report noted that the SCM as mentioned above policy and position was altered in the 2023 SCM Policy to cure the defect of appointing Dr. Chirwa in the BEC when the 2021 SCM Policy did not provide for such.”

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Khosa added that what is more noteworthy is Dr Chirwa’s association with certain companies appointed as service providers, both at the Service SETA (SSETA) and NSFAS.

The companies in reference are eZAGA Holdings, where eZAGA Remit is a subsidiary, Africawide Consulting (Pty) Ltd and Africawide Foundation.
“According to the report, there is a possible relationship between Mr Nongogo and Coinvest and eZaga Holdings,” he said.