Cape Town - Higher Education, Science and Technology Minister Blade Nzimande has given the National Student Financial Aid Scheme (NSFAS) Board until August 30, to say how it will deal with the challenges related to the newly introduced direct payment solution.
The board announced on Wednesday, that it would be investigating its CEO, Andile Nongogo, on charges of misconduct regarding work with the Services Sector Education and Training Authority (Services Seta) and the awarding of bids at NSFAS. The investigation would have a particular focus on the direct payment project.
While the investigation is ongoing, Nongogo will be on a leave of absence and chief financial officer Masile Ramorwesi will be the acting CEO until further notice.
Hundreds of students from Stellenbosch University, the Cape Peninsula University of Technology, the University of the Western Cape (UWC) and the University of Cape Town protested against the “disastrous” implementation of the direct payment system through the third-party companies - Coinvest Africa, eZaga Holdings, Noracco Corporation, and Tenet Technology.
In September last year, the Organisation Undoing Tax Abuse (Outa) began an investigation into the mismanagement of student funds and tender corruption at NSFAS.
NSFAS hired businesses without banking licences or VAT registrations to handle direct payment of student allowances. Those appointed were awarded a tender without being financial service providers. It also found that they charged students much higher fees than major banks.
“Outa calculated this tender could be worth R1.5 billion over five years. This is the estimated cost just to provide students with access to a NSFAS bank card, which students will have to pay out of their allowances, as the costs are deducted from their bank accounts.”
Even after Outa shared its concerns to NSFAS and SIU, NSFAS followed through with the implementation of the system with the four new service providers by the end of June this year.
The minister’s statement read: “The minister is of the view that the direct payment solution is a necessary measure to reduce unauthorised access to beneficiaries’ allowances, payment of ghost students, inconsistencies and delayed payments of allowances.
“The minister further directed the board that, in the interest of transparency and clarifying claims surrounding the ‘defunding’ of students, NSFAS should publicly release the details and information of all those who have been defrauding the scheme.”
The DA has called on Nzimande to suspend NSFAS contracts pending the outcomes of the investigations by the Special Investigating Unit (SIU) and the Public Protector.
In a statement released on Monday, DA higher education spokesperson Chantel King said well-established banks had applied three times for the tender, and it would have made sense to have awarded the contract to them.
Communications officer at Economic Freedom Fighters Student Command (EFFSC) at UWC, Asanda Mchunu said students who had been provisionally funded were not receiving their allowances.
“We don’t even know them (service provides). They don't even have history of working before as service providers for students. So now we are angry, students are hungry.
”And you know very well what happens when students are hungry, we can't study and be expected to get straight A’s and at the same time be hungry,” said Mchunu.