New corruption scandal rocks NSFAS

National Student Financial Aid Scheme (NSFAS) has been rocked by fresh allegations of corruption.

A report released by the Organisation Undoing Tax Abuse (Outa) last week found that NSFAS flouted policies in its appointment of service providers for student accommodation.

The report stated that not only was the axed CEO Andile Nongogo present when the bidding companies were making their presentations before the bid evaluation committee, he also commented on them.


The report further found that some of the firms owned by directors of Coinvest – which is one of the four fin-tech companies linked to the controversial and now-cancelled tenders to provide direct payment of living allowance to NSFAS students – were also awarded accommodation tenders.

Directors in two of the companies that were awarded tenders to provide an online student accommodation portal, said the report, were also appointed in the panel to accredit student accommodation providers and also own student housing.

The directors are Kwasi Asare-Baah and Ebenezer Kwamena Smith, of Profecia IT.

“One of the directors of Profecia IT, Ebenezer Kwamena Smith, is also a director of two other companies, Adam Fae and Fort Brook. The other director, Kwasi Asare-Baah, is also a director of Fort Brook.

Adam Fae was also appointed as a NSFAS accommodation accreditation agent and Fort Brook an accredited NSFAS accommodation provider,” said Outa in its report.

“In this instance, the same persons who were appointed to develop an online student accommodation platform, where accommodation providers list their properties, were also appointed as student accommodation accreditation agents. The student accommodation accreditation agents who inspect properties listed on the online platform have a property which is accredited and is advertised on the online platform they developed themselves,” said the report.


The report said NSFAS definitely favoured this service and accommodation provider.

NSFAS took over the function of accreditation and accommodation from higher education institutions to ensure student accommodation met the minimum standards.

“The student accommodation portal was developed to allow accommodation providers to upload accommodation information and pictures, which include accommodation at tertiary institutions and accommodation provided by the private sector.

“When accommodation providers upload the information, they must pay a once-off fee to NSFAS. The fee is determined by the number of beds that are registered on the portal,” the report said.

There are are questions in the report around who is benefiting from the fees which amount to R40-million for accreditation on the portal and R600-million from accommodation provided.

Outa said it would submit its report to the Special Investigations Unit to investigate all matters related to student accommodation under an earlier proclamation.

It said it would also submit its report to NSFAS and the department of higher education, science and innovation, the auditor-general and the national assembly’s portfolio committee on higher education.

NSFAS spokesperson Ishmael Mnini confirmed the board of NSFAS received the report from Outa on December 7.

“We are studying the report and view it as serious. Upon completion of studying the report, NSFAS will respond to its findings.

“At this point in time, we are not aware of the intention by Outa to refer the report to any state organ,” he said.

The SIU did not respond to questions sent to it by Sunday World at the time of going to print.

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