By Charmaine Ndlela
The National Student Financial Aid Scheme (NSFAS) and the Special Investigating Unit (SIU) have welcomed a Western Cape High Court ruling declaring the student allowance payment tender involving four service providers unlawful, invalid and unconstitutional.
In a joint statement, the entities said the judgment marked a significant step towards strengthening governance, transparency and accountability in the administration of student financial aid funds.
The court on June 12 ruled that the procurement process which led to service-level agreements between NSFAS and eZaga Holdings, Coinvest Africa, Noracco Corporation and Tenet Technology was unconstitutional, unlawful and invalid.
The ruling follows years of controversy over the appointment of fintech companies to distribute NSFAS allowances to students.
In 2023, the NSFAS board moved to terminate its relationship with the service providers after a report by Werkmans Attorneys uncovered irregularities in the awarding of the contracts.
The investigation also highlighted an alleged relationship between former NSFAS chief executive officer Andile Nongogo and two service providers, Coinvest Africa and eZaga Holdings, raising concerns about whether adequate due diligence had been conducted before the contracts were awarded.
According to the judgment, the procurement process was tainted by several irregularities, including improper tender cancellations, irregular drafting and approval of bid documents, non-compliance with mandatory requirements and the absence of key internal controls.
NSFAS and the SIU said the ruling vindicated their efforts to identify and address governance failures within the student funding scheme.
“The judgment not only vindicates our efforts in identifying and addressing significant governance failures but also reinforces our resolve to root out maladministration and safeguard the integrity of public procurement processes,” the statement said.
The court, however, found no evidence that the service providers were complicit in corruption, maladministration or other wrongdoing.
As a result, the companies may submit claims for reasonable expenses and profits incurred while fulfilling their obligations under the now-invalid contracts. Any claims will be independently verified before compensation is paid.
NSFAS said it would engage constructively with the affected companies to implement the compensation process in line with the court order.
The scheme also reassured students, parents and the public that it remains committed to restoring confidence in the administration of student financial aid and ensuring public funds are managed with integrity and accountability.
INSIDE EDUCATION
