Chairperson of NSFAS. Ernest Khosa. Image: Screenshot from Youtube/ GovernmentZA
The CEO of the National Student Financial Aid Scheme (NSFAS), Andile Nongogo, is under scrutiny as the Board of NSFAS has called for an explanation on why his contract should not be terminated.
This decision comes in the wake of the release of the results of an investigation conducted by Werksmans Attorneys and Advocate Tembeka Ngcukaitobi, which revealed damning findings related to alleged corrupt activities at NSFAS.
The investigation was initiated to address allegations against Nongogo that had previously been reported in the media and from other sources.
According to the Chairperson of NSFAS, Ernest Khosa, who addressed the media on the investigation’s findings, these allegations primarily revolved around a conflict of interest in the appointment of service providers.
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He explained that the scope of the investigation covered a range of key areas, including the method of direct payments, allegations against the CEO, conflict of interest in the appointment of service providers, a review of NSFAS supply chain policies and procedures, and the legal compliance of the procurement system.
He emphasised that one of the key findings of the investigation was related to the method of direct payments, where it was noted that there was no feasibility study conducted before the implementation of the direct payment system, particularly regarding the appointment of four service providers.
“The investigators also found no justification for the absence of a feasibility study, which is a crucial component of project preparation,” Khosa said.
Furthermore, the investigation revealed amendments to bid specifications that included the inclusion of fin-tech companies.
“These changes had a significant impact on the mandatory requirements of the original bid and required deeper analysis, particularly concerning the need to appoint four fin-tech companies and their value-added services,” Khosa stated.
The report highlighted Nongogo’s active involvement in the presentation of proposals by service providers to the Bid Evaluation Committee (BEC). “This was a material violation of public procurement processes that he was responsible for safeguarding and upholding as the CEO,” Khosa said.
The investigation also uncovered a possible conflict of interest in the appointment of the four fin-tech service providers. Notably, Khosa said that Nongogo appointed Dr Chirwa to assist the BEC as a technical advisor, which was against the 2021 Supply Chain Management (SCM) Policy. Subsequently, the 2023 SCM policy was altered to address this issue.
The report raised concerns about Dr Chirwa’s associations with companies appointed as service providers at both the Service SETA (SSETA) and NSFAS, including eZAGA Holdings and Africawide Consulting. There were indications of a potential relationship between Nongogo, Coinvest, and eZaga Holdings.
Another significant issue was the lack of thorough due diligence by the service providers. “For instance, Tenet Technologies mentioned subcontracting to Coralite (Pty) Ltd., and a CIPC search revealed common directors between Tenet Technologies and Coralite,” Khosa said.
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In light of these findings, Khosa said that the NSFAS Board has made the decision to write a letter to CEO Nongogo, granting him an opportunity to explain why his contract should not be terminated.
“All staff members associated with wrongdoing, as outlined in the report, will also be subject to a disciplinary inquiry,” Khosa said.
The four direct payment service providers would also be informed that their contracts would be terminated, with a commitment to minimise negative effects on students.
He said that the Board also decided that the Supply Chain Management (SCM) Policy would be reviewed in accordance with National Treasury Regulations and Policies, as well as the PFMA.
“All of these decisions will be progressively implemented from today, 18 October 2023,” he concluded.
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