Termination of direct-payment contracts before the courts - NSFAS

An investigation by Werksmans Attorneys and advocate Tembeka Ngcukaitobi into allegations surrounding their appointment to facilitate the direct payment of allowances to NSFAS students uncovered “conflict of interest”. 

Previously, NSFAS paid student allowances through the financial divisions of universities.    

However, students were unhappy with the new payment system, claiming that their allowances were delayed or not paid at all.     

The outcry by students led to protests on some campuses.

In October, NSFAS CEO Andile Nongogo was shown the door after the investigation into alleged irregularities at the entity, which pointed to a conflict of interest and irregular appointments in the awarding of contracts for the direct payment system.

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The new NSFAS Administrator, Sithembiso Nomvalo, briefed the media on Monday on the disbursement of student allowances.

Nomvalo said the process of cancelling the contracts is now before the courts.

“The four service providers that were appointed as direct payment providers, we have initiated the process to sever ties. We filed papers this past Friday and we are collaborating with the Special Investigating Unit in dealing with those issues.

“The intention of that arrangement is to make sure that there are no disturbances in the disbursement of allowances to students because that has the potential of disrupting the normal process of learning and teaching. 

“We are in conversation with universities to ensure the process continues smoothly, and to the extent possible, we want to avoid further challenges during the 2024 financial year.

“As it is now the end of May, I am pleased to announce that the payments that are currently being made are directly to student bank accounts. We have requested all TVET college students who do not have bank accounts to open bank accounts with the banks of their own choice so that they can avoid any delays in the payment of their allowances,” added Nomvalo.