The National Student Financial Aid Scheme (NSFAS) has confirmed that it has appealed a judgement that ruled in favour of a service provider whose contract the bursary scheme had attempted to terminate.
NSFAS provides comprehensive bursaries and student loans to deserving learners enrolled in approved courses at universities and Technical and Vocational Education and Training (TVET) colleges. This includes money for tuition and registration fees as well as several allowances for food, accommodation and learning materials.
In 2022, the (NSFAS) announced that allowance payments would be paid directly to students. The system was facilitated by four service providers, namely, eZaga, Coinvest, Norocco and Tenetech.
The implementation of the direct payment system was fraught with challenges according to students. The serious nature of these challenges recently led student leaders in the Western Cape to march on parliament and deliver a memorandum of demands to the Department of Higher Education, Science and Innovation.
A subsequent investigation, carried out by Werksmans Attorneys focused on irregularities related to Bid NO. SCMN022/2021, which involved the appointment of these service providers uncovered possible corruption.
The investigation found possible relationships between key individuals including former NSFAS CEO Andile Nongogo and the Fintech companies appointed to pay allowances directly to students.
It was also revealed that there was active involvement of the CEO in the presentation to the Bid Evaluation Committee and potential conflicts of interest in the appointment of service providers.
The report recommended that the contracts of service providers. However, the termination of these contracts have not been straight and has been delayed by the courts.
While NSFAS was initially given the green light to implement the recommendations of the Werksmans report and terminate the contracts, legal challenges have prevented this.
An interim judgement in favour of eZaga was granted on the basis that NSFAS failed to exercise the available options to set aside the tender, but instead resorted to actions that saw eZaga not obtaining payment instructions whilst the contract was still intact.
The judgement compels NSFAS to adhere to the contractual terms of paying allowances through the Direct Payment Partners until such time that the contract is set aside by a court of competent jurisdiction or the Special Tribunal.
NSFAS on the other hand argues that the court did not take into account the governance structure at NSFAS or the laborious nature of its mandate to achieve a harmonious academic year for the Post-school Education and Training Sector.
The government bursary scheme has submitted an appeal for the court's consideration as to why it should not revert to the operation of the contract.
An appeal has been filed and it is premised on why NSFAS cannot revert to the operation of the contract because of (a) the impact that would have on the PSET sector and (b) the irregularity in arriving at the award of the contract.
Implicated NSFAS Staff
The fintech service providers did not hand themselves the contract to paying NSFAS allowances. The Werksmans report implicated 6 employees who sat on the NSFAS Bid Committee for their appointment.
NSFAS informed the portfolio committee on Education and Training that charges filed against the implicated employee range between negligence, gross negligence, dereliction, gross dereliction as well as contravention of the Supply Chain Management Policy and Fiduciary duties.
They indicated that the individuals were informed of charges in March and preliminary hearings were held to provide the implicated employees an opportunity to raise issues in mitigation, before the main Disciplinary.
An external Chairperson was subsequently appointed, and formal charges were issued in June 2024.
As a result, the Chief Financial Officer entered into a negotiation for a separation agreement. The Mutual Separation was subsequently granted by the NSFAS Administrator.
Two employees who were implicated in the report have since resigned as of July 2024.
Two of the three remaining employees are represented by NEHAWU. The Union has lodged a CCMA case for the purpose of obtaining information. Formal hearings for these employees are still to take place.
