The National Student Financial Aid Scheme (NSFAS) has confirmed that Board Chairperson, Ernest Khosa has voluntarily tabled a notice of thirty days leave of absence which will enable the Board to investigate corruption allegations levelled against him.
Khosa’s notice comes less than two weeks after the Organisation Undoing Tax Abuse (OUTA) released audio recordings suggesting he, along with Higher Education Minister Blade Nzimande and the South African Communist Party (SACP) received kickbacks related to a lucrative tender contract, suggestions that he denies.
In exchange for these payments, the service providers would be awarded lucrative tenders to facilitate NSFAS Allowance payments using the Direct Payment System.
Earlier this week, the board revealed that Khosa denied with contempt insinuations that he has received money for himself, Minister Nzimande or the SCAP
NSFAS Board Welcomes Decision
The Board expressed gratitude towards Khosa, describing his decision as an honourable and responsible step toward promoting corporate governance, transparency, and accountability.
However, the board explicitly stated that this decision should not be viewed as an admission of guilt on the part of the Chairperson.
In response to the allegations, the Board took a decisive stance by resolving to appoint an independent legal firm to investigate the veracity of the claims against the Chairperson. The Board will soon announce the selected legal firm, with a mandate for them to submit their findings within 30 days of their appointment.
The Board also emphasised its commitment to handling the situation with due diligence and integrity. It wants to reassure South Africans that it will continue to collaborate with stakeholders in the post-school education and training sector to ensure a seamless start to the 2024 academic year.
OUTA Welcomes Announcement
OUTA have welcomed the Khosa’s decision and expressed their expectation of a truly independent investigation.
We Khosa's decision and look forward to a truly independent investigation by a law firm the NSFAS board will soon announce. We repeat our call for Blade Nzimande to do the same or call for President Cyril Ramaphosa to remove him as minister.
Earlier this week, Nzimade said he has no intention of resigning as he denied all allegations levelled against him by OUTA. He questioned OUTA’s motives for releasing their investigation report and suggested that it may have been done in an attempt to disrupt the start of the 2024 academic year.
The minister said he is considering legal action against OUTA, something the organisation welcomes.
The Contract
An investigation, carried out by Werksmans Attorneys, focused on irregularities related to Bid NO. SCMN022/2021, which involved the appointment of service providers for the NSFAS direct payment system. This is the same tender that ultimately led to the board’s decision to terminate former NSFAS CEO Andile Nongogo from his position, a decision that was recently ratified in court.
The investigation found that there may have been possible relationships between key individuals including 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.
At the time, it was Khosa who presented some of the findings contained in the Werksmans Report.
The recordings, accompanied by OUTA's latest investigative report, represent the latest revelations exposing possible corruption and mismanagement within NSFAS. When releasing their latest investigative report, OUTA called for Khosa, along with Minister Nzimande to hand in their resignations.
