By Edwin Naidu
The wheels of justice may turn slowly in South Africa, but the signs appear promising, to borrow a cliché, that the axe may eventually fall on those who misbehaved using state resources.
Ahead of the 2025 academic year, on Valentine’s Day, there was no love shown by the Special Investigating Unit in a presentation to the Portfolio Committee on Higher Education and Training.
On Friday, SIU head Advocate Andy Mothibi revealed various alleged wrongdoings involving the National Student Financial Aid Scheme (NSFAS) and several tertiary institutions. He said that corrupt activities since 2017 were being probed, and some investigations were close to bearing results. That’s the good news.
Detailing several post-school education and training investigations, Mothibi said information was received from a whistleblower alleging that NSFAS irregularly entered into a contract that provided for the rental a building at R30 million per annum for 10 years.
The investigation found that the lease agreement was awarded irregularly. Further actions may be taken to address the implications of the contravention. The service provider also allegedly fronted.
It does not stop there. Mothibi added that the findings were being considered for appropriate legal action, and attorneys would be briefed soon.
Furthermore, there was alleged irregular procurement of financial service providers and the Fintech sector to assist NSFAS for five years (renewable), in the direct disbursement of allowances into the bank accounts of NSFAS-funded students/beneficiaries enrolled for a course at public universities and TVET colleges. They are Coinvest Africa, Tenet Technology (Pty) Ltd, Ezaga Holdings (Pty) Ltd and Norraco Corporation (Pty) Ltd).
The investigation into supply chain management has been successfully completed. This resulted in the matter being registered with the SIU Special Tribunal. The financial analysis is still in progress, and the team is working to complete the analysis to provide a comprehensive overview of the financial aspects involved.
Mothibi said the SIU and NSFAS issued a review application in the Special Tribunal on 24 May 2024, and the matter was set for hearing next month.
The hearing will focus on Part A (interdict), which seeks to prevent the enforcement of the contracts concluded by NSFAS with the four service providers pending the determination of Part B (review application).
While NSFAS continues to disappoint the nation leaving students at the hands of unscrupulous landlords, the SIU is going for those who were part of the misconduct in the past. The SIU also successfully applied and joined as the Sixth Respondent in an interdict application brought by Ezaga in the Western Cape High Court.
The court granted an interdict in favour of Ezaga, halting the NSFAS from implementing its decision to terminate Ezaga’s contract. This judgment is subject to an appeal filed by both the SIU and NSFAS.
Finally, there seems to be movement in addressing corruption in the scheme and tertiary sector.
Mothibi told Parliament that NSFAS has failed to design and implement controls to ensure an annual reconciliation between the funds disbursed to institutions and the allocation of those funds to students.
This control weakness has led to overpayments and underpayments of funds to the different institutions since 2017.
NSFAS recently appointed a service provider to assist it in performing this reconciliation via a “close-out reporting” process. The investigation and/or verification the close-out reports and/or supporting documentation received from the NSFAS has commenced.
This exercise comprises reconciling the funds disbursed by the scheme to institutions with the amounts that were due, with a view to calculating and recovering potential over-disbursements and/or amounts due to NSFAS or indicating the amounts still owing to the institutions.
However, the reconciliation process has not yet been finalised and is ongoing.
The portfolio committee welcomed the SIU briefing, which chair Tebogo Letsie said highlighted systemic challenges in addressing fraud within NSFAS and the delays in inter-institutional collaboration.
“When acting on proclamations, the SIU often faces protracted response times from the National Prosecuting Authority and the Department of Justice. These delays undermine accountability; officials under investigation may resign, retire, or leave their posts, making it difficult to recover misappropriated funds or hold individuals responsible,” Letsie said.
He also condemned unethical practices within and outside NSFAS, saying: “There are students who fraudulently access funding, depriving deserving candidates of opportunities. Even more alarming, some NSFAS employees knowingly approve of ineligible applicants, perpetuating this injustice.”
The committee was also concerned about the turnaround time for SIU investigations, as some have been going on for years. However, it commended the unit for recovering funds for NSFAS and urged it to finalise its close-out reports.
Unpacking corruption is no overnight process. One hope is that the SIU restores faith in the system by ensuring that its findings encourage the NSFAS to put in place stronger controls to prevent a repeat.
The best signal of success against corruption, however, is ensuring that criminals are punished. Getting back monies paid erroneously is another feather in the cap of the SIU. But it’s meaningless until the law enforcers give the crooks their orange outfits.
Edwin Naidu is the Editor of Inside Education.
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