Expedite Nongogo’s Investigation

The investigation by the NSFAS board into Nongogo’s involvement in the payment scheme tenders at NSFAS needs to be expedited and urgent action taken to address those contracts, as students and the fiscus cannot afford the current chaos says OUTA.

The Organisation Undoing Tax Abuse (OUTA) welcomes the announcement by the NSFAS board to place the organisation’s CEO, Andile Nongogo, on leave of absence while allegations of unacceptable conduct in the awarding of bids at NSFAS are investigated. OUTA urges the board to take corrective action to address the contracts with service providers.

OUTA started exposing the irregularities as early as September 2022. In October 2022 our request for further information from NSFAS via an application in terms of the Promotion of Access to Information Act (PAIA) was turned down by NSFAS. Our investigation continued and we published our report in February 2023, which showed that the four companies who won the tenders to implement the new direct payment system were ill-equipped for the task and were not registered as financial service providers. Two of the service providers were not registered as VAT vendors. One service provider had links with dubious tenders awarded by the Services SETA during Nongogo’s tenure as CEO there, which OUTA had previously exposed.

Despite our concerns, which were communicated to NSFAS, NSFAS implemented the new direct payment system on 30 June 2023. This decision negatively affected the payments of NSFAS allowances to thousands of students. Despite students’ pleas, backed up by OUTA’s investigations and new revelations linking Nongogo to irregular tenders at SSETA, NSFAS and the Minister of Higher Education Blade Nzimande chose to ignore the situation.

“The allegations are extremely serious. OUTA believes a thorough independent investigation needs to take place,” says Rudie Heyneke, OUTA’s head of investigations. “Furthermore, we believe that after a swift assessment of OUTA’s reports and other available information, disciplinary hearings should be conducted.”

NSFAS is currently being investigated by the Special Investigating Unit (SIU) and OUTA shared its investigation reports with the unit. The office of the Public Protector launched an investigation into the direct payment system, following a complaint laid by William Sezoe, vice-chairperson of the Stellenbosch University SRC.

OUTA also reported Nongogo’s conduct to the South African Institute of Chartered Accountants (SAICA) and laid a criminal complaint with the SAPS against him relating to a tender at the Services SETA. See here.

“It is a shame that scarce public resources continue to be wasted like this, while legitimate concerns by civil society and people who are directly affected by poor government decisions – in this case students who rely on financial aid – are ignored by those in power. The actions of executives at higher education institutions have a huge impact on the youth and the future of our country and should always be above suspicion,” says Heyneke.

OUTA wants the investigation into Nongogo to be expedited. “What we don’t want to see is a long drawn-out process and the retention of Nongogo’s services at full pay of R350 000 a month, as we believe our records and a disciplinary hearing could provide sufficient proof for action against Andile Nongogo, and possibly even to bring a delinquent director civil case against him,” says Heyneke.

Wayne Duvenage, OUTA’s CEO, says there is an urgent need for more robust oversight regarding procurement processes. “Officials with Andile Nongogo’s qualifications and experience should be well acquainted with the Public Finance Management Act. Gross negligence of fiduciary duties and waste of public money should be dealt with harshly.”

Duvenage urges the Minister of Higher Education and the board of NSFAS to work with OUTA. “We have gathered a lot of information on Nongogo’s past actions at the Services SETA and would like to assist Minister Nzimande in tackling corruption in the higher education sector.”