The board of the embattled National Student Financial Aid Scheme (Nsfas) has decided to “get external assistance” to come up with a turnaround strategy.
The announcement was made by board chair Ernest Khoza during a briefing to parliament's portfolio committee on higher education on Wednesday.
Nsfas delivered an update on, among other issues, funding disbursement, the rollout of the direct payment system and CEO Andile Nongogo’s leave of absence.
Nongogo was placed on a leave of absence recently after allegations were levelled against him while he was the head of the Services Sector Education and Training Authority (Sseta).
Adv Tembeka Ngcukaitobi and attorney Sandile July, from law firm Werksmans, who are probing the allegations, have also been contracted to review the financial aid scheme’s procurement systems and processes.
Khoza told the parliamentary committee they will have the same chorus year after year “unless we confront the question of the capacity of the organisation and have a strategy that responds to internal challenges faced by management”.
“Turnaround strategies, when implemented, have got major consequences and they can create instability and resentment in the organisation.”
He said he had an opportunity to address labour unions in the institution on the turnaround strategy.
“We went to them and said we are not going to stop effecting a turnaround strategy.
“The implications are that this will have an impact on the current profile of the human capital we have in the organisation. I was pleased at the end of the conversations we were almost at one with the majority union.”
He said they will also be announcing a new communications team for Nsfas within the next five working days.
“As a board, we have decided we are going to be more hands-on in the manner in which we deal with the organisation.
“We have also decided even in the management of stakeholders we will play a much more physical role and this will include our relationship with the auditor-general.”
Khoza said they have set up two teams that will physically go to universities and liaise with financial aid officers to address challenges experienced by higher education institutions, including the impact of the direct payment system.
“They [the teams] are available for queries from students for at least a minimum of a day. We gave the team 10 days to report to us so we can quantify the problem.”
He said Rhodes University and the University of the Witwatersrand will be the first two to be visited.
Khoza also made reference to the “constant press articles claiming to release some exposes on how our entity is run and on irregularities, in particular, related to direct payments”.
“Are the wheels off at Nsfas? Have we collapsed? Hell no, we haven’t,” he said,
Khoza said Nsfas’ budget was just under R50bn annually which was about five times the revenue of Capitec.
Commenting on the media articles, he said “we should separate sensation from substance”.
“The first reaction was to appoint a reputable firm and reputable lawyers to investigate all the allegations that we saw in the press, mainly in the Sunday Times by a particular journalist.”
He said their expectations from the investigating firm was that they will be given a preliminary report within a month and a final report.
“The preliminary report gives you the basis upon which you can take action, the basis upon which you can speak in more committal terms on what is it we are going to do.”
“The CEO in our books has not been found guilty of anything,” Khoza said.
“We looked at the nature and profile of the allegations and what it means for an institution our size and went to him and said ‘as we investigate this matter we believe the credibility of the investigation will be enhanced if you are not in the building’.
“I want to emphasise that point so that we don’t go on a demonising competition against the CEO.”
Khoza and senior Nsfas officials came under heavy criticism from members of the portfolio committee, including its chair, Nompendulo Mkhatshwa.
She began the meeting by indicating that students were not happy and that they and their parents were anxious.
“What is going on? There are young people who have been defunded. Explain that clearly to us.”
“We have been sending questions [to Nsfas] that have not been responded to and when they are at times responded to, they are shoddy responses,” Mkhatshwa said.
“Unfortunately, there is a trust deficit between ourselves as a committee and yourselves as Nsfas because you don’t even have the decency of responding to our questions.
“So I can only imagine the trust deficit between yourselves and students. There is a trust deficit between university management and Nsfas.”
An MP said “it almost seems as if they (Nsfas) are not bothered”.
“That’s why I would be in favour of saying you can’t be earning a salary for something you are not doing.
“You can’t be useless and then be rewarded with that pay cheque while students are hungry or homeless, hopeless and confused across institutions of higher learning.”
She said “it does not make sense for you to brag about how you have a revenue base that is five times more than that of Capitec but your management of it is bad”.
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