Cape Town - The National Student Financial Aid Scheme (NSFAS) is still operating without a CEO, chief financial officer and chief audit executive (CAE), with a new NSFAS board expected to be announced in October.
The position of chief information officer has also been vacant for 11 months.
Higher Education and Training Minister Nobuhle Nkabane and NSFAS appeared before the standing committee on appropriations over governance deficiencies which have resulted in the dissolution of the NSFAS board and the scheme being placed under administration.
On April 14, Nkabane’s predecessor, Blade Nzimande, dissolved the NSFAS board and placed it under administration over a number of issues.
These included the scheme’s inability to perform its most basic functions and its failure to fully implement the recommendations from the Werksmans Attorneys report, notably terminating the contracts of four direct payment service providers found to have been irregularly appointed.
The report implicated six employees who sat on the NSFAS bid committee in the irregular appointments.
“It is clear, it is not desirable that NSFAS is currently under the second administration intervention within the five years of conclusion of the previous intervention.
“The underlying causes of this intervention are maladministration and mismanagement, which have combined to produce corruption in the NSFAS grant payment system,” Nkabane said.
At the time, Nzimande also announced the appointment of Sithembiso Freeman Nomvalo as the new NSFAS administrator.
Nomvalo said that the cancellation of the service provider contracts was under way.
One of the service providers, Ezaga, had initiated a court challenge and the NSFAS counter-application was unsuccessful in July, with NSFAS thereafter appealing it.
“As it relates to the disciplinary process of the employees, the CEO is no longer with us and the CFO.
“The other employees in the report, the level of culpability of the rest of the employees, was not as severe as that of the CFO as well as the CEO.
“So the processes have been under way in relation to that and are about to be concluded.”
Two employees implicated in the report resigned as of July 2024 and formal hearings for the remaining employees were yet to take place.
President Cyril Ramaphosa issued a proclamation for NSFAS to be investigated by the Special Investigating Unit (SIU), with NSFAS requesting R186.908 million to fund the expenses of the investigation.
“The Werksmans report makes no finding of criminality, I’m not suggesting there isn’t any. The work we are doing with the SIU might put us in that space,” Nomvalo said.
With the majority of tertiary institutions in Gauteng or near Gauteng, and the NSFAS head office based in Cape Town, there was a need to decentralise its offices so as to establish a presence in Gauteng, KwaZulu-Natal and the Eastern Cape, as well as some form of presence on campuses.
Nkabane said that the rental at the Cape Town office, located on the Foreshore, was “too much”, at about R2.5m a month.
At the end of the 2022/2023 financial year, NSFAS had a revised budget of R54.221 billion from R47.607bn, an increase of R6.613bn.
Nomvalo said that the ICT infrastructure was an area where spending could have been more efficient, as NSFAS was still experiencing problems on this front.
This year, the NSFAS had incorrectly funded 1 926 TVET college students and 9 112 university students due to a system error.
Cape Argus