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NSFAS Accused Of Irregular Spending

NSFAS Accused Of Irregular Spending

NSFAS is gearing up to fund all qualifying students for the current academic year, but the bursary scheme has come under scrutiny for how funds are spent.An investigation into the bursary scheme’s recent tender allocations has led the Organisation Undoing Tax Abuse (OUTA) to accuse NSFAS of irregular spending. 

NSFAS Accused Of Irregular Spending

The organization issued a statement last Thursday claiming that the bursary scheme hired an irregular service provider to provide bank cards to beneficiaries. OUTA determined that this was primarily due to the fact that the tender winner lacked a banking licence. 

We believe these tender awards are irregular. We question whether awards such as these are unnecessarily draining NSFAS resources and contributing to its cuts to student subsidies. 

Additionally, the organization accused the bursary scheme of renting out expensive office space and reducing student housing subsidies. OUTA investigated the three tenders listed below.

  • SCMN022/2021

NSFAS allowances will be paid directly to students through a five-year contract worth at least R1.5 billion, according to OUTA;

  • SCMN004/2021

A three-month contract to supply a digital tool for calculating student allowances;

  • SCMN015/2021

 Two-year lease, renewable for a further three years, for the NSFAS head office.

In light of the NSFAS’s reduction in student housing subsidies, OUTA’s portfolio manager Rudie Heyneke questioned the value of these contracts.

These contracts may drain NSFAS’s resources and contribute to its cuts to student subsidies unnecessarily.

 In South Africa, most commercial banks offer student accounts with low banking fees and costs and significantly more value-added services than approved service providers, according to Heyneke’s research.

In addition to offering these incentives, NSFAS acknowledges that in order to provide value for students with their NSFAS bank cards, they need to engage with businesses.

Bantu Holomisa, the leader of the United Democratic Movement UDM, also accused the scheme of spending R2 million a month on office rent even though the premises were not occupied between December 2021 and November 2022, amounting to R20 million in total. It is reported that NSFAS used to pay R500 000 in rent before this.

The bursary scheme has responded by stating that the allegations are unfounded and that the relocation of its offices was necessary to accommodate its growing capacity. In addition, NSFAS spokesperson Slumezi Skosana stated that NSAFS began paying rent for the building when it was occupied.

As a service-oriented organization, we had to move from Wyberg to the city center because we needed to be closer to our stakeholders and be more accessible to them. Skosana explained the main reason behind that.

The Special Investigating Unit (SIU) has investigated NSFAS and OUTA since August 2022, and believes that their findings regarding the above-mentioned tenders should be considered part of the investigation.

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