Employees at the National Student Financial Aid Scheme have requested the Special Investigating Unit to probe chief executive officer Andile Nongogo and his board for corruption, malpractice and nepotism.
EMPLOYEES at the National Student Financial Aid Scheme (NSFAS) have requested the Special Investigating Unit (SIU) to probe chief executive officer Andile Nongogo and his board for corruption, malpractice and nepotism.
The employees allege that corruption was rampant under Nongogo and his board.
Nongogo, who took over from administrator Dr Randall Carolissen, was appointed in November 2020.
In a seven-page letter to the SIU, the employees said the rot at the entity continued under Nongogo and his board. The employees asked the investigating unit to probe all tenders processes, including failed IT systems and failed laptop tenders. The employees claimed Nongogo has also taken over the supply chain management (SCM) to give tenders to his close associates.
They said the SIU should look into Nongogo’s cellphone records and contacts.
“Sometimes they (service providers) go meet him in the meetings and there are instances where the service providers would look for the CEO. It is clear that the CEO has taken (over) the process of end-users,” reads the letter.
The letter further reads: “The student calculator tender – (This Is) NSFAS system that was procured in 2010/11 (Codis and Phoenix) for the sum of R100 million. NSFAS procured a system to disburse funds to eligible students. But the CEO believes that the system is not fit for purpose and advertised the tender to replace the disbursement system. However, the student calculator was never used and it is not working and the service provider was already paid. The service provider was paid R15 million for the system that is not working. This is fruitless expenditure.”
Nongogo has also been accused of extending a contract of Lunika Incorporated for a closeout project which is alleged to have not yielded results.
“The closeout process was never closed and it does not make sense why the service provider’s contract has been extended for two years. It should be noted that the closeout projects did not yield any fruits or results… NSFAS received a disclaimed audit contributed by this project which has never been closed, (the backlog 2016 to 2021). The project is still not finalised,” it read.
Lunika senior administrator Sikho Yekela confirmed that his company is doing business with NSFAS, but denied that the project did not yield results.
“The reconciliation work was undertaken in the form of virtual and physical engagements with institutions. To date, NSFAS and institutions have agreed on numbers/figures, and have clarified the funding status of students and amounts disbursed to institutions and allocations to students. To date, NSFAS has recouped about R179 million from 13 institutions and is still expecting to recoup more funds from other institutions. Project files requested by the SIU have been provided to assist with the ongoing investigation, Lunika team has held two engagements with SIU officials,” said Yekela.
Nongogo was also accused of moving NSFAS from its offices in Wynberg to the CBD where they would be allegedly paying rent of R1.8 million a month. They said the reason was that Nongogo wanted to sell the building in Wynberg.
“NSFAS has procured new furniture and the people procuring are the very same people who won the tender for the building (in the CBD),” reads the letter.
The employees also asked the SIU to investigate the new employees, saying there have been irregular appointments. They said this was happening because Nongogo has taken over the human resources department.
“The structure is no longer in line with a structure of Public entities eg Sassa. The CEO removed the general manager from the structure and demoted some senior managers’ titles to managers and yet salaries are those of senior managers.”
The employees also want the SIU to investigate the appointment of a senior manager in finance and budget, Luhle Tshangela, saying she was earning more than senior managers that have been at NSFAS for a long time. They said the interview was conducted by Nongogo and HR general manager Thapelo Letswalo.
Nongogo was also accused of purging and intimidating senior managers who refused to implement questionable instructions.
In August, the SIU announced in a statement that it would probe corruption and maladministration at the NSFAS. It said it would also investigate any unlawful or improper conduct by employees of officials of the entity, service providers and their employees, or any other person or entity.
On Tuesday, SIU spokesperson Kaizer Kganyago said they would also investigate the allegations levelled against Nongogo and the board.
NSFAS spokesperson Masile Ramorwesi said this week that the questions sent were intended to tarnish the good name of the scheme, its board, and in particular Nongogo. Ramorwesi said NSFAS rights are reserved in this regard. He said Nongogo was not aware of a specific request to investigate him.
Ramorwesi added that it was defamatory and factually incorrect that Nongogo has taken over SCM.
“NSFAS is a schedule 3A public entity, governed by the Public Finance Management Act (Act No. 1 of 1999) and the regulations and instructions issued by the National Treasury in accordance with the act. Accordingly, NSFAS procurement processes and approved SCM policy has been developed in accordance with the above legislative prescripts. All procurement activities are aligned to these prescripts, policies, and processes,” said Ramorwesi.
He denied that a service provider was paid R15 million for a system that was not working. He said NSFAS pays all service providers based on a deliverables-based model, which simply put: NSFAS pays for work done.
“The CEO does not have any relationship with Lunika. Lunika is a duly appointed service provider of NSFAS. NSFAS was leasing at Wynberg and the lease ended. In terms of the PFMA when a contract/lease ends a public entity is required to follow a proper procurement process. That is exactly what NSFAS did. NSFAS went on an open tender in compliance with SCM policy and legislative prescripts. The tender was concluded and awarded to the successful bidder in compliance with its SCM policy,” added Ramorwesi.
He said the PFMA was very clear on how an entity should dispose of a major asset. In the context of NSFAS, the said building was not a major asset.
“NSFAS has followed all the necessary processes in its decision to dispose of the building that was no longer in use and in line with the operational requirements of the organisation. Your question implies that the CEO is personally selling the building. The statement is false. The sale of the building is an organisational decision that was approved by the board considering all the legislative prescripts,” he said.
