Hardworking EFF MP Sihle Lonzi has scored victory in his spirited resolve to expose alleged corruption within the private student accommodation space.
After Lonzi last week wrote to the National Students Financial Aid Scheme (NSFAS) asking for the naming and shaming of four companies that were procured to be intermediaries of funds between NSFAS and student accommodation providers, NSFAS has complied.
Not only has the NSFAS named and shamed the four companies that scored R145-million, but it also revealed that these intermediaries themselves procured another intermediary to do what they contracted to do.
Four companies named and shamed
The four companies have been named to be Training Young Minds (Pty) Ltd, Profecia IT (Pty) Ltd, Xiquel Group (Pty) Ltd, and New Dawn Technologies (Pty) Ltd.
“NSFAS concluded service level agreements with the 4 successful bidders on 27 February 2023. This was… for a period of 5 years commencing from the go-live date of the online solution,” wrote NSFAS Waseem Carrim to Lonzi.
“The service providers subcontracted Netcash (Pty) Ltd, a third-party payment services provider, to process payments to accommodation providers, being the accommodation portion of funding allocated to a student lessee funded by NSFAS. NSFAS understands that Netcash is a financial services provider registered under FSP Number 44751.
“NSFAS is in the process of investigating the procurement process. It is probing the agreements concluded, and payments to service providers made in terms thereof. The investigation is extremely voluminous and complex,” Carrim went on.
Investigations to be finalised
“NSFAS is making every effort to finalise this investigation. It will… take any necessary remedial steps, as soon as possible. Which includes a review of the student accommodation function in respect of students funded by NSFAS.”
The response comes after Lonzi raised the red flag over the four companies last week.
Lonzi had told Carrim that the wasted R145-million could be better used for the benefit of the students. A submission that Carrim has agreed with.
“Given that NSFAS spends over R14-billion on student accommodation, a figure that will undoubtedly grow, it is outrageous that hundreds of millions, if not billions of rands, could be diverted to a handful of companies without ethical and transparent processes or regulatory oversight,” Lonzi had complained.
Lonzi continued that the situation was compounded by the fact that there was a crisis of defunded students. This included unresolved appeals, and widespread delays in disbursements to the most financially vulnerable young people in our country.
Students compromised
“Every rand paid to an unaccountable service provider is a rand taken away from a struggling student,” said Lonzi.
Carrim agreed.
“NSFAS acknowledges that there are failures in the current system. This is including overcrowding, fraudulent claims for ghost students. Also delays in payments and non-compliance with the minimum norms and standards for student accommodation.”
