The Organisation Undoing Tax Abuse (Outa) has taken legal action against the CEO of the National Student Financial Aid Scheme (NSFAS), Andile Nongogo, along with four other individuals for their alleged involvement in misconduct and fraudulent activities.
Among the accused are Duduzile Mwelase, a senior manager at the Services Sector Education and Training Authority (SSETA), and Anania Baloyi and Ngwenya Baloyi, both affiliated with Five Star, a service provider for SSETA.
According to Outa, the criminal complaints revolve around a tender granted to Five Star on August 22 2016.
At the time, Anania was the sole member of Five Star and Ngwenya served as the company’s managing director. It is alleged that Five Star substantially over-inflated its bid.
Rudie Heyneke, portfolio manager at Outa, said the organisation discovered the irregular tender while investigating other questionable tenders involving SSETA.
“Our investigations revealed irregularities with the Five Star tender, which was awarded for a period of 19 months until March 31 2018 for the design, development, and supply of branded promotional items as required by SSETA,” Heyneke said.
He said Outa’s findings indicated that Five Star provided numerous branded items and related services to SSETA, receiving a total payment of R36.962-million.
He said the service level agreement between SSETA and Five Star stipulated that the tender was authorized by Nongogo, who was the CEO at SSETA at the time.
Specifically, on January 27 2018, Five Star submitted a quote amounting to R302 010 for the branding of an existing tender box, a wooden cabinet with the SSETA logo.
Outa said Nongogo’s signature appeared on the invoice, suggesting his awareness of the quoted price.
On February 12 2018, Mwelase received the branded box. Nongogo subsequently authorized payment of the invoice, and on March 1 2023, Five Star received R302 010 as stated in the invoice.
Heyneke said during the investigation Outa sought clarification from SSETA on several issues including proof that the tender box was recorded in the SSETA asset register. SSETA confirmed that the tender box was indeed recorded at a value of R9 690.
He said Outa investigators visited the SSETA offices on June 8 2023 and physically inspected the tender box in the building’s reception area. The package was reportedly covered with white vinyl imprinted with the SSETA logos.
In pursuit of additional quotes, Heyneke noted that Outa contacted a reputable print and branding company in Gauteng, which quoted R3 731.75 for branding a cabinet similar to SSETA’s tender box.
Based on these findings, Heyneke asserted that Five Star had overcharged SSETA, inflating the price by at least R298 000 or 8 000% in this particular instance.
He also holds the view that the SSETA CEO and employees involved in approving the quotes and payments were complicit in the misappropriation of public funds.
“We are still busy with investigations into this and other tenders at SSETA which were awarded to entities closely associated with Ngwenya Baloyi. The inflated prices charged by service providers are unacceptable.
“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.
“Furthermore, Outa wants all such suppliers to be listed on National Treasury’s restricted suppliers’ database so that they will not be able to conduct business with any state entities,” he said.
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