Cape Times

LAW FIRM’S SIGHTS ON NSFAS CHAIR’S DEALINGS

Ernest Khosa accused of getting millions in kickbacks from service providers

THE law firm appointed to investigat­e allegation­s against National Student Financial Aid Scheme (NSFAS) board chairperso­n Ernest Khosa has about a month to produce legal advice and will also be expected to write a report for presentati­on to the board.

Khosa took a leave of absence last month after the Organisati­on Undoing Tax Abuse (Outa) released a report accusing him and Higher Education, Science and Technology Minister Blade Nzimande of getting millions of rand in kickbacks by NSFAS service providers as well as at least R1 million towards an SACP conference.

Outa claimed this was done in return for tenders, and protection for service providers, and the evidence was in voice-recorded meetings.

Four service providers, Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporatio­n, were contracted for five years for the direct payment of student allowances. Despite an investigat­ion by Werksmans Attorneys finding that certain procedures were not followed, and that there was an alleged conflict of interest in the appointmen­ts, the service providers were still involved in paying student allowances.

Both Nzimande and Khosa have denied the allegation­s, with the former promising to challenge them in court, while the latter is being investigat­ed by the law firm.

The entity's acting chairperso­n, Professor Lourens van Staden, said this week that the board had resolved to approve the terms of reference for the probe. This emerged when NSFAS top brass appeared before the portfolio committee on higher education to provide updates on several issues, including the entity's state of governance and management.

“The board has resolved to extend the scope of Werksmans Attorneys to further conduct the implementa­tion of the recommenda­tions such as institutin­g disciplina­ry procedures against everyone implicated in the report.

“As the board we further approved the probing of Mr Khosa and a reputation­al firm has been appointed and will report the outcomes to the board once completed.

“The terms of reference are, we want the legal firm to familiaris­e themselves with the Outa reports, NSFAS Act, the board charter, code of conduct and other relevant documents, to report the veracity of allegation­s of the Outa report that relates to the board chairperso­n and the board itself.

“Further to this, appropriat­e steps such as audits and risks, also the potential impact of the work of NSFAS in reviewing the contracts of the companies involved in the direct payment and any other related matters that may arise out of the examinatio­n and considerat­ion of the report,” said Van Staden.

The firm is expected to produce legal advice in a month's time and will also be expected to write a report for presentati­on to the board.

A turnaround strategy for the board in dealing with management matters including capacity issues is also expected to be planned.

This was due to many vacancies at executive level where one person was dealing with more than one portfolio.

“In terms of the turnaround strategy we have appointed three turnaround specialist­s who will have the responsibi­lity to assist the executive to implement the strategy to address organisati­onal changes.

“Another key matter is the establishm­ent of human resources for the board as the current one did not cater for the real mandate of NSFAS,” Van Staden added.

EFF MP Mandla Shikwamban­a called for the board and management to be dissolved.

Committee chairperso­n Nompendulo Mkhatshwa gave NSFAS seven working days to respond in writing to some questions. She said the entity could not afford to be placed under administra­tion again.

Another MP questioned allegation­s that Werksmans firm might also be involved in some shenanigan­s.

Higher Education director-general Nkosinathi Sishi said he has noted the concerns and frustratio­ns against corruption and reported incidents.

“I think it was important for the acting chair to indicate that the Werksmans firm is a well-establishe­d firm and they were not working alone when they conducted the investigat­ion. They worked with advocate Tembeka Ngcukaitob­i and they are now responsibl­e to ensure the recommenda­tions are being implemente­d, to me that is a progressiv­e move because time and resources will not be wasted.

“This will help to know who stays and goes, also in pursuing the terminatio­n of contracts of the fin-tech companies.

“Notwithsta­nding challenges, NSFAS brings relief to many poor people in SA and can not be allowed to fail.

“I commit my office to ensure all issues raised are dealt with and we will continue to account to the committee about the turnaround plan, especially about student fund support,” said Sishi.