The National Student Financial Aid Scheme (NSFAS) has placed its CEO Andile Nongogo on precautionary suspension for his links to a fintech company that has scored a lucrative contract with the funding scheme.
In a statement on Wednesday, the NSFAS said Nongogo’s suspension emanates from allegations that relate to his previous work with the Services Sector Education and Training Authority (Services Seta) and how this may relate to unacceptable conduct in the awarding of bids at NSFAS.
Media reports at the weekend said one of the companies contracted to pay student allowances, Coinvest, is led by a director who awarded a R29-million tender at the Services Seta when Nogongo was CEO.
“While the board recognises that, in the main, the allegations stem from activities in another organisation, it views them in a very serious light,” the funding scheme said.
“NSFAS runs close to a R50-billion budget which services young people from poor and working-class backgrounds.
“This is no small task as it has an impact on skill development and consequently the economic development of our nation.
“The board believes that in executing this responsibility, public trust is of paramount importance.
“In the interest of the image of NSFAS, the board has resolved to investigate the allegations with a particular focus on the direct payment project. During the course of the investigation, the CEO will be on leave of absence.”
The scheme said the chief financial officer, Mr Masile Ramorwesi, will be acting as CEO until further notice.
“The board wishes to reiterate that this investigation is no pronouncement of guilt against the CEO, but an objective effort to determine the veracity of the allegations,” said the funding scheme.
The NSFAS direct payment method which was implemented at universities this year has been widely criticised by students for being ineffective.
This month, students from different universities including University of Free State, Tshwane University of Technology, and North West University embarked on protests some of which turned violent to complain about the late payment of allowances and exorbitant charges which are above those charged by big banks
Four fintech companies – Coinvest, eZaga, Tenet Technologies and Norraco – were awarded tenders to distribute allowances to students at the country’s 26 public universities.
The direct payment system by the four companies was first piloted at 50 public technical and vocational education and training colleges in 2022.
In the statement, NSFAS board chair Ernest Khosa said the scheme is committed to good governance.
“The board commits itself to transformation and clean governance at NSFAS and will ensure that any activities that defeat the purpose of serving students from poor and working-class backgrounds are addressed decisively”.
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