THE END OF THE ROAD FOR NSFAS CEO ANDILE NONGOGO
OUTA is delighted with the NSFAS board’s decision to terminate the employment of Andile Nongogo as CEO after an in-depth investigation conducted by Werksmans Attorneys and Advocate Tembeka Ngcukaitobi. You will recall that we have exposed irregularities at NSFAS in September 2022 already. But why is Nongogo’s firing so significant?
In a country where corrupt cadres get suspended and deployed to a new position the minute the spotlight is highlighting other wrongdoing, it was refreshing to see the NSFAS board terminate Andile Nongogo’s employment. OUTA warned in August this year that Nongogo should not be allowed near the public purse after our investigation into his term as CEO at the Services SETA (SSETA) which showed that Nongogo signed off on irregular payments for goods and services delivered to SSETA. This cost taxpayers a whopping R37 million. OUTA went further than just exposing this – we also reported Nongogo’s conduct to the South African Institute of Chartered Accountants (SAICA) and laid a criminal complaint with the SAPS against him relating to a tender at the Services SETA. See here.
Werksmans' investigation came after OUTA’s exposé of NSFAS corruption. We first uncovered this in September 2022, forewarning that the scheme was not only destined to fail but that it will cost taxpayers millions with underprivileged students becoming the ultimate victims of an ill-conceived, corrupt system. NSFAS and the Minister of Higher Education, Dr. Blade Nzimande, ignored our warnings as well as our official request for more information regarding the tender process. Instead, NSFAS threatened us with legal action. But we continued our investigation and issued a more comprehensive report in February this year. See here.
The payment scheme was implemented on 30 June 2023, and thousands of students did not receive their allowances. Just as we predicted, students paid the price for corruption. As students became more and more vocal, OUTA kept up the pressure and added to it with our findings about Nongogo’s actions at Services SETA. The NSFAS board eventually had no choice but to order the Werksmans investigation.
The Werksmans report vindicated our findings and recommended that Nongogo's services should be terminated, contracts with the four fintech companies cancelled immediately, and disciplinary actions instituted against all parties complicit in pushing through the direct payment system.
Nongogo’s actions at NSFAS extends beyond the implementation of the direct payment system. Under his leadership, NSFAS also appointed Futgenx Technologies (a company that previously manufactured PPE) as an Information and Communication Technology (ICT) specialist tasked with developing a student calculation tool at a cost of over R4 million. The company is closely related to Coinvest, one of the direct payment partners. The contract with Futgenx was terminated because they could not produce the goods and services required by NSFAS, yet they were still paid over R3 million.
Furthermore, Nongogo signed a lease agreement for the NSFAS head office in the Foreshore in Cape Town. According to the tender, it was supposed to be a two-year lease with an option to renew for another three years. Nongogo signed a five-year lease. The offices total 8 479 square metres and the cost over the rental period is R166.906 million, including VAT and escalations. Based on 451 employees, NSFAS will be paying an average of R74 000 per employee per year to lease this building. (While this was happening, NSFAS has cut its subsidies for student accommodation to R45 000 per student per year, leaving many students unable to afford accommodation. This while NSFAS works in lavish surroundings.)
Under Nongogo’s leadership at NSFAS, a new accommodation accreditation tender also went out, and 39 companies were appointed to inspect student accommodation to make sure that it complies with DHET minimum standards. To date, only about 25 000 units have been accredited, with a need for more than 400 000 units in 2024. Some of the service providers who were appointed are closely associated with Nongogo’s tenure at SSETA. One of the companies that was awarded a tender is headed up by a senior provincial government official. OUTA’s investigation into this matter also shows that some companies who are accommodation providers, will at the same time be accommodation accreditors – a clear conflict of interest. (The OUTA report on this matter will be released soon.)
It is OUTA’s view that Nongogo’s actions and irregular decisions caused major damage to NSFAS, as well as major upheaval for thousands of students, something that can’t be measured in monetary value. Students who went without allowances for weeks (some are writing their final exams with food aid from the universities and donors since they haven’t received any allowances since September), many were kicked out of accommodation and others couldn’t complete their studies.
But removing Andile Nongogo as CEO won’t result in a magical turnaround at NSFAS. OUTA has reason to believe that the corruption at this institution is deeply entrenched, and that the next step to fix it would be for a complete, independent audit of the institution. The board as well as minister Nzimande needs to be fired to make way for competent, uncaptured leadership who has the best interest of our country’s poor youth at heart. Not only via NSFAS, but at the many other institutions that were established to ensure the sustainable upliftment of young people.
More on the criminal charges against Andile Nongogo is here.