By Thapelo Molefe
The National Student Financial Aid Scheme (NSFAS) has confirmed that it is actively working with the Special Investigating Unit (SIU) to terminate its current head office lease agreement, which costs R2.5 million per month.
This decision comes after Parliament’s Portfolio Committee on Higher Education scrutinised NSFAS’ choice to spend such a substantial amount on rent.
In a statement, NSFAS said it supported the SIU’s legal action to cancel the lease and would abide by any court ruling.
It said the move formed part of its broader effort to overhaul its operations amid mounting scrutiny over governance and expenditure.
“The scheme supports the SIU’s approach to cancel the lease and will comply with any court decision on the matter,” the statement read.
Although an application to set aside the lease was due by 30 April, the submission was delayed due to “judicial availability”, according to NSFAS. However, it was working closely with the SIU to expedite the process.
The lease, which includes R18.6 million in parking bay costs over five years, was signed before the appointment of the current board.
NSFAS said that the current leadership was committed to a zero-tolerance policy towards wastage, fraud and corruption, and that it was implementing a turnaround strategy centered on transparency and fiscal discipline.
It was also preparing for a possible immediate exit from its current offices, with contingency plans being developed to minimise disruptions.
The relocation is part of NSFAS’s regionalisation strategy aimed at boosting operational efficiency and improving service delivery.
The lease agreement for NSFAS’s Cape Town head office came under scrutiny when reports emerged that it was paying nearly R2 million per month for office space, a significant increase from the R603,000 monthly rent at its previous premises in Wynberg.
Concerns were raised about the procurement process and the necessity of such an expensive lease, especially given that many offices in the new building reportedly remained unused.
In response to these concerns, Higher Education and Training Minister Nobuhle Nkabane agreed that the scheme could not spend that much on rent.
“The plan is to decentralise. We are going to establish regional offices in three provinces, which are the Eastern Cape, Gauteng and KwaZulu-Natal. We will see how best we can come up with satellite offices in other provinces,” Nkabane said at the time.
The SIU’s involvement stems from a broader investigation into NSFAS’s financial management.
The investigations have revealed systemic issues within the scheme, including inadequate financial controls and a lack of proper reconciliation processes leading to overpayments and underpayments to institutions and students.
Despite the controversy, it reiterated its commitment to good governance and responsible management.
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