NSFAS Direct Payments Debacle: ActionSA Vindicated as Werkmans Investigation Confirms Fraudulent Procurement Process

19 October 2023

ActionSA welcomes the announcement made yesterday regarding the outcomes of the investigation by Werkmans Attorneys, which conclusively determined that the awarding of the NSFAS Direct Payment of Allowances contract was indeed irregular and in gross violation of procurement practices.

This welcomed announcement vindicates the intensive efforts made by ActionSA, OUTA and other stakeholders to protect the best interests of the taxpayer and students by fighting to prevent NSFAS from becoming a feeding trough for unscrupulous tenderpreneurs whose greed undermines the well-being of students.

ActionSA first announced our intention to challenge the dubious nature of the contract, grounded in the irrefutable evidence contained in OUTA’s investigative report. OUTA’s investigation left no room for doubt, revealing that the four service providers appointed by NSFAS for the Direct Payments of Allowances were not only unqualified but, following the system's rollout, demonstrated a complete lack of competence in administering the student beneficiary accounts.

Since the rollout of the Direct Payments system, flagged issues have included excessive and questionable deductions, late or non-existent disbursement of allowances and frequent transaction failures. The impact on students has been, and continues to be, severe, needlessly compromising their well-being and education.

In light of the damning outcomes of the investigation, our legal team will be writing to NSFAS to seek clarity on their intentions regarding the immediate termination of the contracts. Should NSFAS fail to take such immediate action, ActionSA will proceed with our separate review application in the High Court to have these fraudulent contracts set aside.

Issued by Matthew George, ActionSA Western Cape Students Forum Chairperson, 19 October 2023