NSFAS Defends Itself From "Attacks" Of Fraud & Corruption


The National Student Financial Aid Scheme is no stranger to controversy and allegations of fraud, corruption and maladministration. Now, the CEO of the bursary scheme may be soon placed under investigation after criminal complaints were laid against him.



The Organization Undoing Tax Abuse (OUTA) has fired claims at the National Student Financial Aid Scheme (NSFAS), specifically aiming at the scheme's CEO and others. 

OUTA has called for Andile Nongogo, NSFAS CEO, Duduzile Mwelase, senior manager at SSETA and Anania Baloyi and Ngwenya Baloyi, both from Five Stars Communications to be placed under investigation for alleged fraud and corruption.

Nongogo was the former CEO of SSETA during the time of this alleged fraud and corruption.

OUTA has called for an investigation into the four individuals for their involvement, and Nongogo and Mwalase are also to be investigated for contravening the Public Finance Management Act (PFMA).

Nsfas is no stranger to controversy, particular in relation to funds mismanagement. 

This time, it is the bursary scheme's CEO that may be facing criminal charges relating to the over-inflation of a tender box provided by Five Star back in 2016.

Allegedly, Five Stars over-inflated their bid for the branding of a tender box by 8000%, which is roughly R292 000. The total cost of the quote came to a staggering figure of R302,010.

Rudie Heineken, Portfolio Manager at OUTA, says that the organization was made aware of the case in 2017 when they received information from whistleblowers regarding irregularities.

One investigation led to another and we discovered a whole network of service providers and public officials signing-off on these kind of deals.

Heineken added that there is enough evidence to back the corruption charges, including 'heavily overpriced' invoices, simultaneously revealing that Five Star supplied numerous branded items and other services to SSETA and received R36,962 million for their services.

Nsfas has since responded, stating that the scheme is "disappointed that an attempt was being made to link such incidents to NSFAS", and called these allegations "consistent and coordinated" against the scheme and its CEO. 

Earlier this year, it was discovered that NSFAS mistakenly paid student allowances to at least 40 000 beneficiaries who did not qualify for funding, to the tune of R5 million.

In a statement, Nsfas says: 

We also note that the alleged transgressions have got nothing to do with Nongogo’s current responsibilities and mandate at NSFAS. We are, however, disappointed that an attempt was being made to link such incidents to NSFAS. For example, a few months ago, charges were allegedly laid against employees at Nongogo’s erstwhile employer, and his name never featured!

We have made observations that since the adoption of policies related to the direct payment of student allowances and NSFAS’s involvement in student accommodation, there has been a consistent and coordinated set of attacks on the NSFAS CEO and the institution. The attacks included intimidation of the CEO by faceless individuals through short messaging services. These are being addressed through appropriate security structures.

Heyneke believes that the four individuals who were involved in approving the quotes and payments were complicit in the misappropriation of these public funds.

Companies who charged these exorbitant prices and public officials who approved payment of inflated tenders, should all be held to account for the abuse of taxpayers’ money.

Additionally, OUTA calls for suppliers to be listed on National Treasury’s restricted suppliers’ database so that they will be prevented from conducting business with any state entities.

OUTA previously revealed its findings uncovered during an investigation into the National Student Financial Aid Scheme. 

According to OUTA, its investigation first began last year with an initial enquiry into irregularities within the Services SETA, when the organization found links to contracts in the two entities (the Services SETA and NSFAS). Both entities fall under the Department of Higher Education and Training (DHET). 

In its report, OUTA said:

The failure by crucial institutions such as the Services SETA and NSFAS to manage their funds responsibly fails the unemployed youth and our country as a whole.

OUTA's report highlighted how the organization discovered that NSFAS hired "service providers without them having the required banking licenses [or VAT registrations] to pay out student allowances at excessive rates relative to the market." 

As per OUTA, NSFAS also hired a business which provided "cloth masks to National Treasury in 2020 to work on an ICT contract and has rented an expensive head office space while slashing the subsidies for student accommodation." 

NSFAS concludes its statement, saying it will not "succumb to character assassination attempts disguising as concern for the rule of law." 


Suggested Article:

NSFAS corruption.

The investigation into NSFAS continues, now with the South African Union of Students joining the conversation. Around 40,000 students are suspected of receiving NSFAS funds they do not qualify for.




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