NSFAS Accused Of Rigging Requirements For Awarding Tenders To Fintechs

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Allowances from NSFAS ensure that poor students can purchase food and stationery and pay rent while they pursue their education qualifications. Concerns have been raised around whether the companies tasked with distributing these allowances directly to students was fair and appropriate. 

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The National Student Financial Aid Scheme (NSFAS) is awaiting the findings of a report regarding allegations of tender rigging. These allegations concern the awarding of tenders to four fintech companies responsible for making direct payments of student allowances. 

NSFAS expects to receive the report within the next 10 working days. Upon receipt of the report, they will take appropriate action. 

The NSFAS Board recently briefed Parliament's oversight committee on various issues, including the direct payment system, student accommodation, and the backlog of NSFAS application appeals. NSFAS has been working to address these issues and improve its systems.

One notable development in this process occurred in August when NSFAS CEO Andile Nongogo was placed on special leave in August. This decision stemmed from allegations of maladministration from his previous employer. 

Claims against Nongogo also raise concerns that service providers from his previous job have also become involved with NSFAS. 

The investigation aims to determine whether these service providers are registered financial entities and whether there is a historical business and tender relationship between the CEO and the director of these companies. 

It was previously reported that Nongogo was not only present but also participated in, the process of selecting and awarding these contracts to the four Financial Service Providers, namely Coinvest, eZaga, Noracco and Tenet Technology.

The arrangement was that Nongogo could be present (as he was invited to the meeting), but only attend as an observer. However, recently leaked audio recordings of the meeting in progress, reveal that Nongogo participated in the discussion, despite NSFAS insisting to the Sunday Times that the selection process was independent, with the CEO having no part in deciding who was evaluated and having "no part" in awarding the contracts. 

Additionally, the report will also assess whether the awarded companies met all the requirements stated in the bid advertisements.

Furthermore, there are concerns about whether these companies applied only after the tender requirements were lowered, as none of the four initially applied when the tender was advertised. 

Coinvest Africa, one of the implicated companies, has denied any wrongdoing and emphasised that their contract resulted from a legitimate tender process.

NSFAS Efforts To Resolve Challenges 

It was revealed that NSFAS is considering laying criminal complaints against individuals involved in fraud once investigations are completed. This includes the recovery of R38 million from a college in the Free State

Criminal and legal action may be taken against students and others who have defrauded the NSFAS system.

Another challenge NSFAS is addressing is the backlog of student accommodation applications. Currently, only just over 30.8% of students who applied for accommodation have received it. 

The slow accreditation process for NSFAS student accommodation is partly due to the initial manual system, which has now been replaced with a new accreditation tool to improve the process. Accreditors will be able to accredit accommodations online and in real-time from 9 October 2023.

NSFAS also plans to tackle the backlog of NSFAS appeals by the end of October. 

Suggested Article:

nsfas card used to pay nsfas allowances

More than a million students rely on NSFAS allowances from the National Student Financial Aid Scheme to purchase food, stationery and pay rent while they pursue their tertiary education goals. Challenges with accessing these NSFAS allowances have become a serious concern for the higher education department. 

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