The board of the National Student Financial Aid Scheme (NSFAS) has confirmed that CEO Andile Nongogo is taking a leave of absence over allegations made against him while he was at the helm of the Services Sector Education and Training Authority (Sseta).

TimesLIVE reports NSFAS yesterday said over the past few weeks several allegations were levelled against Nongogo.

‘The allegations relate to his work with the Sseta and how this may relate to unacceptable conduct in the awarding of bids at NSFAS. While the board recognises that, in the main, the allegations stem from activities in another organisation, it views them in a serious light.’

The Sunday Times reported at the weekend that a director of Coinvest Africa, Tshegofatso Ntumba, landed a R29m deal with Sseta in 2018 to supply promotional items at grossly inflated prices.

Nongogo was the CEO of Sseta at the time, while Ntumba was involved as director of the company Star Sign and Print.

Coinvest Africa is one of four companies awarded contracts by NSFAS to make direct payment of allowances into students’ bank accounts.

This system has been roundly condemned by students who are demanding that it be scrapped. The R29m deal was first exposed by the Organisation Undoing Tax Abuse (Outa) which released an update of its October investigation into NSFAS’ direct payment system recently.

In its updated report, Outa made several findings which included that the four companies are not registered financial service providers and are relatively new firms with ‘very little proof of experience as fintech companies’.

It also found that after negotiations with the service providers, NSFAS agreed to a monthly fee of R102.35 on students’ bank accounts, but decreased the monthly fee to R29 and eventually R12.

While NSFAS refused to divulge how much the contracts awarded to the four service providers are worth, according to calculations by the Sunday Times, each company is expected to make about R330m over five years.

Business Day report adds CFO Masile Ramorwesi will act as CEO of the scheme until further notice.

NSFAS said the investigation ‘is no pronouncement of guilt against the CEO, but an objective effort to determine the veracity of the allegations’.

Full TimesLIVE report

Full Business Day report