The Portfolio Committee on Higher Education, Science, and Technology met virtually to discuss various aspects of the National Student Financial Aid Scheme (NSFAS) direct payment system. This was a follow-up meeting after NSFAS did not turn up for a prior Committee meeting, leaving Members aggrieved. The meeting revolved around NSFAS's operations, accountability, communication issues, and challenges service providers face in disbursing student allowances. Members highlighted the need for transparency and a comprehensive approach to addressing these issues.
The Committee received presentations from four service providers -- Tenet Technology, eZaga Holdings, the Noracco Corporation and Coinvest Africa -- who assisted NSFAS in administering its financial support to students. The Members sought clarity on the challenges they faced, the selection processes for on-site visits to universities and technical and vocational education and training (TVET) colleges, the Know Your Customer (KYC) verifications, and the communication issues they experienced with NSFAS.
The Committee's key concerns included the need for NSFAS to respond to questions effectively, address appeals backlogs, and handle matters involving allowances, accommodation quotations, and discrepancies in the disbursement of allowances to students.
During the meeting, there were interruptions from EFF Members, who repeatedly requested releasing a report into investigations into NSFAS. This disrupted the flow of the meeting and led to some Members expressing concerns about the meeting's conduct, and the ultimate removal of the EFF Members from the meeting.
Members generally expressed dissatisfaction with the presentations, particularly the one from NSFAS, which they found repetitive and lacking specificity. They emphasised the importance of accountability and the need for a comprehensive database to ensure that NSFAS's claims of allowance disbursements were aligned with students' reports of non-receipt.
Throughout the meeting, Members stressed the importance of transparency, and expressed interest in the funding model for the 2024 academic year. They also raised concerns about potential fraud cases and legal action related to irregular contract awards. They also sought clarification on the cost of legal services provided by a legal company into allegations against the NSFAS chief executive officer.
The Chairperson explained the reason for the meeting, highlighting three key issues that had arisen from their previous meeting with the National Student Financial Aid Scheme (NSFAS):
- The Committee needed more time for NSFAS to respond substantially to the questions posed to them.
- The Committee had requested a clear and comprehensive way forward regarding addressing the backlog of appeals, queries, allowances, and accommodation quotations.
- The Committee wanted to address discrepancies regarding the dispersal of allowances to students, and cross-reference information provided by NSFAS and the students themselves.
She also mentioned ongoing investigations related to the capacity of service providers and the appointment processes, urging caution in their questioning to avoid legal conflicts with ongoing investigations.
EFF proposal to release investigation report
Mr M Shikwambana (EFF) began by greeting all the attendees and guests present, and described the Portfolio Committee as the "most disrespected" in Parliament.
He emphasised that the problems within NSFAS had been long-standing, and mentioned the investigations initiated by Minister Blade Nzimande in 2021. He highlighted that Professor Yunus Ballim, a civil engineering professor at Wits University, had been appointed to make recommendations for a future model for administering student financial aid and to investigate corruption issues, particularly those related to the release of allowances to students.
During his statement, there was an interruption from another Member, who was heard mumbling in the background. The Chairperson intervened to ask the Member to mute their microphone, allowing Mr Shikwambana to proceed with his remarks.
Mr Shikwambana continued discussing the appointment of Professor Yunus Ballim by Minister Blade Nzimande to investigate corruption issues and delays in the release of allowances to students. He indicated that the report from this investigation should guide the discussions during the meeting.
The Chairperson then requested that Mr Shikwambana allow the Committee to package his concerns for discussion, and clarified that the primary focus of the meeting was the programme rather than the report mentioned. Mr Shikwambana continued to emphasise the importance of the report and the need for the Minister to address it.
The meeting became disruptive, with several Members rising on points of order due to the back-and-forth discussion between the Chairperson and Mr Shikwambana.
Mr Shikwambana continued to ask for the aforementioned report to be released.
The Chairperson asked Mr Shikwambana to mute his microphone, and ensure it stayed muted. She said that Mr Shikwambana’s points were not procedural and did not affect the agenda presented for this meeting.
Mr Shikwambana continued to state that the Chairperson was incorrect to say that, as the report did affect the agenda. The matters had started a long time ago, and they needed to be addressed.
The Chairperson asked for Mr Shikwambana to reserve his questions until the discussion section of the meeting.
Mr Shikwambana said that was not fair. He further stated that the report needed to be presented first so the Committee could discuss strategies, led by the report.
Ms J Mananiso (ANC) raised a point of order regarding the meeting's procedure. She said meetings typically followed the agenda as provided in the invitation and programme. She suggested that Mr Shikwambana should wait until the discussion point was reached to present his thoughts.
Mr B Pillay (ANC) expressed support for the Chairperson's authority to enforce order in the meeting. He recommended that appropriate action should be taken if a Member continued to disrupt the meeting.
Mr Shikwambana interjected and defended his comments, stating he was being misquoted. He emphasised that he was not trying to disrupt the meeting, but rather wanted to address a crucial issue regarding a report related to the meeting's agenda.
The Chairperson warned Mr Shikwambana that he would be removed if he continued to interject and disrupt the meeting. She urged him not to interrupt, and said she needed to maintain order in the meeting.
Ms N Chirwa (EFF) clarified Mr Shikwambana's intention. She explained that he wanted to ensure that the report he mentioned could be discussed during the meeting and would not affect the meeting's agenda. She requested the Minister to release the report for discussion during the meeting.
Mr T Letsie (ANC) raised two primary concerns. Firstly, he expressed his reservations about the messages on a chat platform on Zoom, which showed individuals who were recording the meeting using Otter. These individuals could not be identified as those who were supposed to be part of the meeting, but were within the meeting. He sought clarification on the proper procedure for such actions, suggesting that there might be some issues regarding their appropriateness.
Secondly, he addressed the ongoing discussion related to the report. He emphasised the importance of not making assumptions about what the Minister would or would not cover. Instead, he suggested that a more appropriate approach would be to request that the report be made public. He pointed out that it was the Minister's prerogative to decide whether to release the report based on his agreement with its contents.
Lastly, he expressed concerns about the continuous interjections and interruptions from Mr Shikwambana. He stated that such behaviour disrupted the meeting's decorum and suggested that the Member be given a final warning. He also recommended taking further action if the Member’s interruptions persisted, indicating that it would be considered disrespectful to the meeting.
The Committee Secretariat removed the attendees who were recording the meeting.
Mr B Yabo (ANC) raised concerns about Mr Shikwambana's actions, citing Rule 90 of the joint rules. He argued that Mr Shikwambana was anticipating matters on the agenda without providing clear guidelines for such anticipation. He expressed the view that Mr Shikwambana should not have the right to pre-emptively discuss items on the agenda and assume whether certain details would or would not be provided during the meeting.
The Chairperson responded by advising Members, including Mr Shikwambana, that they should communicate any matters they wished to add to the agenda with the Committee Secretary in future. She also cautioned against making premature assumptions about agenda items and highlighted that interjecting during discussions violated the rules.
Mr Shikwambana briefly commented on his intention, expressing his desire for the Minister to share a report from 2021 that he believed could be relevant to the meeting's discussions. However, he was interrupted before completing his statement.
The Chairperson warned Mr Shikwambana that further interjections would result in his removal from the meeting, as his repeated statements were not adding anything new. She repeated that if Members wished to introduce a matter to the Committee's agenda in the future, they should communicate with the Secretary. She also pointed out that the rules governing conduct in chambers also applied to Committee meetings.
She encouraged Members to engage in the discussions of the meeting, raise concerns, and provide guidance as needed. She assured them their issues were noted, and that the Committee would follow the established agenda. If any concerns were not addressed during the discussions, Members were encouraged to raise them at the appropriate time. She also offered to work with Members who wanted to shape the agenda, suggesting they communicate with the secretariat or herself.
The Chairperson handed over the floor to the Minister. The Chairperson directed her comments to the Minister, indicating that he would lead the delegation from both the Department and NSFAS. She expressed the Committee's desire to obtain responses arising from their prior engagement with NSFAS, with an expectation that NSFAS had all the necessary responses. She said she had come across an email requesting these responses to be sent to the Secretariat, and hoped it was an error because the meeting's purpose was to receive responses.
She highlighted the need for a clear plan to address various issues, including the backlog of allowances, queries, appeals, the sluggish pace of accommodation accreditation, and the lack of displacement analysis. The Committee was seeking a path forward, and assessing the readiness for 2024.
She also highlighted the need for clarity regarding the accuracy of information concerning allowance disbursements. Despite assurances from NSFAS and service providers that all students had received their allowances, there were claims from students who had reported not receiving their allowances, such as those at Wits University who had not received allowances for August and September. Addressing this issue and finding a proper resolution was crucial. She concluded by handing over the floor to the Minister.
EFF Members removed from meeting
Mr Shikwambana wished to say something, but the Chairperson did not note his hand and the Chairperson asked for him to be removed, as he was interjecting.
Before he was removed, he said that the Minister did mention that he would be leaving the meeting and that the Minister would, therefore, not be able to answer the questions during the discussion.
Mr Yabo reiterated his point of order.
The Chairperson said that she had acknowledged Mr Yabo’s point of order the first time.
Ms Chirwa rose on a point of order and expressed her concern at Mr Shikwambana being removed from the meeting, emphasising its significance as it pertained to accessing information held by the state, a right enshrined in the Constitution. She believed that Mr Shikwambana's request was entirely within the scope of the meeting's purpose and would not cause any delays or disruptions. In her view, he was simply asking for the report to enable his participation as a public representative, and it was not an unreasonable request.
Ms Chirwa further argued that the Minister had a constitutional obligation to share the report, and withholding it for personal reasons was inappropriate. She highlighted that such a request from a Member in a full Committee should be granted, as it was a legitimate and necessary part of their representation.
Mr Pillay raised a point of order, pointing out that the agenda did not include a report.
Ms Chirwa interjected to clarify that they were not trying to include the report on the agenda.
The Chairperson responded by explaining that there were established procedures for adding items to the agenda, and Members should follow those procedures.
Ms Chirwa asserted that the request was not related to the agenda.
The Chairperson expressed her reluctance to engage in a dialogue with Ms Chirwa on this matter.
In response, Ms Chirwa commented that the Chairperson conducted dialogues only with men, and anticipated being removed from the meeting without hesitation.
The Chairperson then requested that Ms Chirwa be removed from the meeting.
The Chairperson highlighted that there was a well-established process for raising matters within the Committee and that no matter brought forth by a Member had been ignored in the past.
She pointed out that there was a specific order and approach to discussions and engagements, and it had never been the practice to start discussions before receiving presentations. The Chairperson reiterated the importance of following the established procedures of the Portfolio Committee.
She said that the Committee was committed to ensuring that young people in the country had access to quality education and that the executive was held accountable. However, this must be done in a respectful and organised manner.
She expressed dissatisfaction with the 33 minutes spent on frivolous points of order when the Committee could have used that time more productively to receive the Minister's presentation and engage in meaningful discussions. She urged Members to adhere to the proper procedures and respect the agenda.
Finally, she handed over the floor to the Minister, the Director-General (DG), and officials from NSFAS to proceed with the meeting.
Minister on role of NSFAS
Dr Blade Nzimande, Minister of Higher Education and Training, began by expresingd his hope that there would be no background noise causing disturbances -- he was currently en route to catch his flight. He requested permission to turn off his video to ensure a stable network connection.
The Minister proceeded to provide a brief overview of the purpose of the meeting, emphasising that it aimed to account for NSFAS's actions in addressing the concerns raised. A significant portion of the meeting would be dedicated to hearing from service providers and NSFAS itself.
He outlined the mission of NSFAS, which consisted of three distinct but interconnected elements:
- NSFAS primarily provides financial assistance to eligible students at technical and vocational education and training (TVET) colleges and public universities, following government policy under the DHET.
- It identifies eligible students based on national policy, and manages student loan repayments from those in the old system, ensuring that resources are available for future generations.
- NSFAS supports access to, and success in, higher education and training for students from low-income and working-class families who would otherwise struggle to afford their education.
The Minister highlighted that NSFAS aimed not only for access, but also for student success, and he expected NSFAS to ensure both access and success for qualifying students.
He continued by highlighting NSFAS's role, emphasising that it was led by a broader management team responsible for executing its mandate on a daily basis. He expressed his high expectations for the organisation and its leadership.
He stressed that NSFAS represented one of the most progressive interventions by the ANC government. It aimed to systematically break the cycle of intergenerational poverty by ensuring that no student or dependent was denied access to higher education due to poverty. This was especially vital in a country like South Africa.
He recognised the significant contribution NSFAS had made in this regard, and expressed the Department's expectation that NSFAS would continue to do so. To support this effort, NSFAS was allocating R48 billion for the fiscal year 2023/24 to assist students from working-class and low-income backgrounds. This was a substantial increase compared to its predecessor, Tester.
He said NSFAS was providing funding to nearly 160 000 students who were beneficiaries of the South African Social Security Agency (SASSA). This commitment was a crucial aspect of government's efforts to alleviate the financial burden on low-income individuals seeking access to post-school education and training, provided they met the necessary criteria.
Minister Nzimande said NSFAS played a crucial role in defending the gains made in addressing poverty and inequality in the country. It was not merely helping people to escape poverty, but was actively breaking the cycle of generational poverty. It did so by producing professionals, managers, artisans, and other individuals who contribute significantly to the nation's economy while improving their own lives and those of their families.
The uniqueness of NSFAS was that there was no scheme like it in the world. He was unaware of any similar programme in either developing and developed countries, except for Cuba, a socialist country that operated within a different context. This distinction underscored the significant nature of NSFAS.
He acknowledged the challenges NSFAS faced, but he highlighted that it was incorrect to portray the organisation by detractors as if it were failing. Hundreds of thousands of NSFAS beneficiaries were currently studying, preparing for exams, and making the most of the educational opportunities provided by the government. He attributed these successes to the scale of the programme.
Minister Nzimande then described how he had proactively addressed issues related to direct payment allowances. In August, he met with the full board of NSFAS. He instructed them to explain various issues, including charges related to student payments, onboarding of students, eligibility concerns, and the appeals process. He expressed confidence in the board's ability to address these challenges, and said that NSFAS had responded to his instructions. He welcomed the possibility of appearing before the Committee at a later stage to discuss his satisfaction or concerns with NSFAS's actions, clarifying that he was not avoiding accountability.
He expressed his wishes for the success of the Portfolio Committee meeting, stressing the importance of the Committee's efforts in examining the actions of service providers, which would enable them to make informed judgments based on all the available reports and information. He reiterated that he was not running away from accountability, and cited a scheduling conflict as the reason for his early departure from the meeting.
Minister Nzimande concluded his remarks by stating that he could not recall any report that he had not made public, including the report requested by Mr Shikwambana regarding NSFAS. He expressed his willingness to release any report that may not have been publicly shared, and stressed that there would be no hesitation in doing so.
He highlighted his commitment to transparency and openness, citing the ANC's role in establishing a political dispensation characterised by these principles since 1994. He assured the Committee that he was ready to provide any information or reports requested, reaffirming that he was not hiding anything.
He indicated his intention to rejoin the meeting upon landing. He noted the presence of the Deputy Minister, Mr Buti Manamela, the Director-General of the Department , the chairperson of NSFAS, and the service providers in the meeting. He concluded by wishing the Portfolio Committee a successful meeting, and thanked them for their time and consideration.
Status of Ballim Report
The Chairperson asked Dr Nkosinathi Sishi, Director-General, DHET, to confirm if the Ballim Report had been shared.
The Chairperson proposed the idea of having previous reports on NSFAS consolidated into a format that would enable a comprehensive review of recommendations and determine the best way forward. While emphasising the Committee's openness to items that could benefit the sector, the Chairperson also stressed the importance of adhering to established procedures for bringing agenda items before the Committee.
Dr Sishi clarified that the Ballim Report was in the public domain, and would be made available to anyone who requested it, including the Portfolio Committee. It had already been made available to the Public Protector.
He provided an overview of recent engagements and progress made in addressing issues related to NSFAS. He referred to the ongoing engagement with the NSFAS board and service providers, and affirmed the Department's commitment to meeting Parliamentary oversight requirements.
He handed over to the NSFAS board chairperson for remarks before the presentations commenced.
NSFAS plan to resolve problem issues
Dr Ernest Khoza, Chairperson, NSFAS board, said the purpose of NSFAS's presence was to address the concerns outlined in the letter of invitation, which encompassed several key areas. These areas included:
- The development of a turnaround plan to resolve issues linked to the new direct payment system;
- Improvements in handling student appeals and accreditation of student accommodation;
- Plans for enhancing the information communication technology (ICT) system;
- Strategies for achieving the resolution of outstanding appeals and query-related matters.
In preparation for this meeting, NSFAS had put together a comprehensive presentation that delved into these specific areas. In addition to the presentation, NSFAS was eager to respond to any questions posed by the Committee Members. The questions raised in previous engagements covered a wide spectrum of topics, including the external audit report and the appointment of auditors to investigate various allegations. NSFAS was ready to address these inquiries as well.
Mr Masile Ramorwesi, Acting Chief Executive Officer (CEO), NFAS, led the Committee through the presentation.
Plan to resolve direct payment challenges
He said NSFAS disbursed allowances to university students via direct payments, which encompassed living allowances, book allowances, meal allowances and travel allowances. Similarly, TVET college students received their allowances through direct payments, covering living allowances, private accommodation support, personal care allowances and transport allowances.
NSFAS initiated the takeover of direct payments at TVET colleges in November 2022, followed by the universities in June 2023. While TVET colleges had generally shown support for this transition, certain student formations within universities had expressed resistance. Despite this resistance, NSFAS had made noteworthy progress in onboarding students, ensuring that they received their monthly allowances as intended. Acknowledging the persistent challenges both students and institutions raised concerning direct payments, NSFAS had taken proactive steps by establishing a comprehensive seven-step process designed to address and rectify these issues systematically.
The seven-step process to address direct payment challenges, including steps that had been completed and those pending, was as follows:
- Formation of two teams to report directly to the Acting CEO regarding student challenges (Completed).
- The teams had conducted visits to at least ten universities and 20 TVET colleges over a span of ten days, from Monday 11 September, to Friday 22 September, to observe on-ground challenges (Completed).
- The teams were expected to report back to the Acting CEO in a written report (Pending).
- Following the report's review, the Acting CEO would develop a response strategy (Pending).
- The Acting CEO was scheduled to report to the NSFAS board during the week commencing 9 October (Pending).
- Subsequently, after the board's deliberations and potential amendments, it would create its own report for submission to the Minister (Pending).
- The publication of outcomes from these steps was dependent on stakeholders' thoughts and considerations (Pending).
The pending steps were yet to be completed as part of the process aimed at resolving the challenges associated with direct payments.
The teams assembled to investigate the direct payment challenges consisted of members from various domains, including senior management in operations, individuals responsible for appeals, servicing administrators specialising in specific institutions, data analysts, communication experts, and direct payment partners. Notably, the completion statistics for "Know Your Customer" (KYC) verification for universities were generally strong, with most institutions achieving rates exceeding 90%. However, a few, including the University of Fort Hare, North West University, and the University of South Africa, fell short of this mark.
In contrast, KYC completion statistics for TVET colleges averaged 79% overall. The complexity arose from TVET colleges operating on multiple academic terms within a single academic year, with each term involving new student intakes, contributing to the ongoing need for students to fulfil KYC requirements at various points throughout their academic journeys.
As part of the plan to address direct payment challenges, a substantial number of universities and TVET colleges had been visited for assessments. The ten universities visited were Nelson Mandela University, Rhodes University, Mangosuthu University of Technology, Durban University of Technology, University of Venda, Wits University, Central University of Technology, North West University, Sefako Makgatho University, and the University of Pretoria.
Furthermore, 29 TVET colleges were included in the assessments -- Capricorn, King Hintsa, Umfolozi, Motheo, Sekhukhune, Coastal, Central Johannesburg, Taletso, Tshwane North, Buffalo City, False Bay, Nkangala, eThekwini, Majuba, Letaba, Mopani, Goldfields, Ikhala, King Sabata Dalindyebo, Elangeni, South West Gauteng, Ekurhuleni West, Vuselela, Gert Sibande, Vhembe, Maluti, Mthashana, Northlink, and the College of Cape Town.
While the detailed report was intended for the CEO, some predominant observations had been made during the visits. The NSFAS teams engaging with these institutions had held discussions with financial aid management, bursary officers and Student Representative Councils (SRCs), enabling the identification of the usual challenges experienced by students across these institutions. These challenges encompassed issues such as the slow distribution of bank cards, cybersecurity threats that posed risks to student accounts and system integrity, non-responsiveness/delays in query handling, limitations in partner capacity and resources on the ground, impacts resulting from NSFAS data remediation, a delay in developing a Finance Intelligence Centre Act (FICA)-compliant process for the KYC of underage students, and concerns about excessive bank charges.
(See attached document for proposed solutions)
Development of fees' model
Initially, the programme introduced an R89-00 fee bundle, offering more than 30 free transactions. Subsequently, in October 2022, a revised R29-00 fee bundle, with 12 free transactions, had been implemented. Importantly, student leadership had been actively consulted throughout this process to ensure that the chosen fees model aligned with the needs and preferences of NSFAS beneficiaries. In June 2023, a further refinement occurred, with adopting a R12-00 fee account and a 'pay as you transact' fees model.
Partners and NSFAS had jointly initiated a programme aimed at educating beneficiaries on the effective and efficient utilisation of their bank accounts. The primary goal of this initiative was to empower beneficiaries with the knowledge needed to reduce their exposure to potential fraud and avoid incurring unnecessary bank charges. NSFAS was actively engaged in ongoing consultations to explore measures aimed at decreasing fees.
(See attached presentation)
Due to their nature, Mr Ramorwesi said that some of the questions may be responded to via a written report.
NSFAS's 'intervention strategy'
Dr Khoza said they had taken the Committee into their confidence on some developments at NSFAS, which were aligned with the concerns raised by the Committee at the last meeting with the entity. He said he would provide some context in that regard.
He then went on to discuss NSFAS’ intention to turn the situation around and to share some developments in the NSFAS 'intervention strategy.' The Committee would notice the wording that NSFAS was using, as opposed to 'turnaround strategy,' and that NSFAS was reacting to the challenges identified. These challenges included ICT weaknesses, human capital capacity issues, difficulties in managing stakeholders, inefficiencies in product delivery systems, and the need for leadership improvement within the NSFAS organisation.
NSFAS had taken note of the various concerns raised, including those indicated in the media, the Minister's directives, inputs from the Portfolio Committee, their own observations as the board, and the findings of the Auditor-General of South Africa (AGSA). He also mentioned that they had received three sets of directives from the Minister in the past 45 working days.
The first set of directives had come from the NSFAS meeting with the Minister in Zimbali, to discuss concerns about direct payment. The second had come from the Minister shortly after the Portfolio Committee meeting. NSFAS had received a further set of directives from the Minister quite recently. Dr Khoza highlighted that these directives provided context to the steps they took to make NSFAS a more efficient and effective organisation to address students' needs.
He then listed the recent directives, including the implementation of the IT system, a review of processes and operations, a review of governance and management design, and the implementation of a new performance management and accountability framework. They were also working on improving NSFAS's stakeholder, media and communication relations, implementing a 24-hour call centre, and initiating criminal and legal action against individuals defrauding the NSFAS system.
They consulted with the CEO, management, and key stakeholders to conceptualise this intervention strategy. They had also convened a board lekgotla to put key stakeholders under one roof to discuss how best to deal with the situation facing NSFAS. The lekgotla had already taken place, and various stakeholders had been invited to engage in vibrant discussions. Out of these discussions, the board had come up with eight resolutions:
- A focus on ICT challenges;
- Capacitating the communications department ;
- Strengthening the CEO's office;
- Addressing concerns related to direct payments;
- Improving the implementation of NSFAS's accommodation policy,
- Reviewing the N+ (years' funding) rules and other guidelines;
- Addressing the AG's findings urgently; and
- Strengthening management and leadership within NSFAS.
Dr Khoza said they had taken steps related to human capital, such as appointing new executives and strengthening various Departments. They were also actively engaged with law enforcement agencies to address fraudulent activities within the scheme.
Regarding the Werkmans Attorneys investigation, he explained that they expected the report to be ready in the next ten working days. Werkmans Attorneys were conducting the investigation with two leading investigators, and the estimated cost of the investigation was around R2 million.
They collaborated closely with the AGSA to address the challenges identified in their findings. These challenges were being taken very seriously, and they were committed to resolving them.
The Chairperson asked Dr Khoza to summarise his points.
Dr Khoza reported that the board had taken unprecedented measures to support management in making NSFAS more efficient and effective in delivering services to students. They met weekly to monitor progress, reflecting the Minister's directives, their observations, and those of the Auditor General.
The Chairperson requested NSFAS to send the responses that had been covered during the closing remarks in writing, as it would assist the Committee.
She spoke about service providers, and highlighted the importance of focusing on essential matters rather than potentially contradicting the ongoing investigations. The primary concern was understanding why some students had not received their allowances, and identifying any issues involving resource distribution.
She said that NSFAS had shared the findings from their investigations, including problems such as the slow distribution of bank cards, cyberattacks, and a lack of responsiveness in handling queries. She acknowledged that while NSFAS bore some responsibility, service providers also played a role in addressing delays and providing necessary information for communication with students.
The Chairperson then introduced the representatives from Tenet Technology, requesting that they clarify their roles and responsibilities before making their presentations. She said that they had approximately 15 minutes to make their presentations.
Tenet Technology on the NSFAS direct payment programme
Mr Ryan Passmore, Project Executive, Tenet Technology, began the presentation by introducing himself and acknowledging the presence of Mr Bonginkosi Mthethwa, another representative from Tenet Technology.
Mr Passmore initiated the discussion by providing an overview of Tenet Technology's background and profile. He highlighted their extensive experience in delivering payment services and banking solutions since 2013, underlining their licensing as a financial service provider, and their affiliation with the Payment Association of South Africa. Additionally, Tenet Technology held a sponsored banking licence.
He shifted the focus to the NSFAS contract, stressing that the contract primarily centred on the provision of direct payment allowances to NSFAS beneficiaries. Notably, Tenet Technology had secured a five-year contract starting in July 2022, entailing the disbursement of allowances to an allocation of 225 000 NSFAS beneficiaries annually. This initiative aimed to enable students to engage in financially inclusive transactions with immediate access to retailers both nationally and internationally.
Mr Passmore provided significant statistics regarding the disbursement of allowances to students. To date, over R1.4 billion has been disbursed to students through Tenet Technology, with 57 615 NSFAS (Mastercard) physical bank cards distributed. Moreover, 181 054 students had been successfully onboarded onto the Tenet Technology banking platform, of which 144 396 had received allowances. Impressively, 91% of these students had authenticated themselves through the 'Know Your Customer' (KYC) security process, ensuring secure transactions.
The presentation delved into the fee's journey, outlining its evolution over time. Initially, the programme introduced an R89-00 fees bundle offering over 30 free transactions. Subsequently, in October 2022, a R29-00 fees bundle was introduced, providing 12 free transactions. These decisions were made in collaboration with sector stakeholders to ensure the best-suited fees model for NSFAS beneficiaries.
In June 2023, the programme adopted the implementation of the R12-00 account and a 'pay as you transact' fees model, with all fees out of the bundle being transparent and agreed upon.
Mr Passmore referred to the challenges faced by Tenet Technology in executing this programme, which included issues related to the contract scope, IT troubles, and delays in onboarding and payment file submissions. He particularly highlighted the critical importance of achieving a 48-hour turnaround time for processing payment files, highlighting how delays in this process impacted students' behaviour and transaction costs. Additionally, challenges stemming from political interference and media coverage were acknowledged, as they adversely affected Tenet Technology's operations on campuses.
He said potential solutions included exploring transactional fees, offering value-added services, providing cash-back rewards, and addressing ICT issues through collaborative efforts. The presentation concluded by mentioning their proposal for a loan management system, indicating Tenet Technology's commitment to finding the best fee model for students and their dedication to creating value-added services for NSFAS beneficiaries.
(See attached presentation for details)
eZaga Holdings' financial services platform
Mr Saud Ally, Group CEO, eZaga Holdings, said the organisation was a distributor and alliance partner of Access Bank and various other South African banking institutions. It focused on providing financial services tailored to specific environments, particularly targeting the emerging and lower-income market.
He highlighted eZaga Holdings’ crucial role in offering a financial services platform for programmes like NSFAS, providing frameworks to meet specific requirements while ensuring compliance with regulations and maintaining alliance relationships with various banks.
He discussed eZaga Holdings’ involvement in the NSFAS Masters Western programme, where they facilitate KYC processes, physical card issuance, and financial services for students. He also provided details about the universities and campuses allocated to them as part of their engagement.
He elaborated on the KYC registration process, which involved sending student notifications, enabling virtual KYC processes, and validating student information. He acknowledged challenges related to incomplete KYC data, mainly due to incorrect or missing cell phone numbers.
Regarding card distribution, he explained that some students preferred alternative methods like transferring funds or cardless transactions, instead of collecting physical cards. eZaga Holdings was actively working to encourage students to make more use of their cards.
He highlighted his organisation's efforts to prevent fraud and enhance student security, including notifications, one-time pin (OTP) security, and on-ground agent support. These included the presence of a 24/7 call centre and various communication channels like WhatsApp and email for student support.
Mr Ally stressed the importance of accurate cell phone numbers and the continuous availability of a 24/7 call centre to improve program efficiency. He also shared insights into students' preferred communication methods, such as WhatsApp and Facebook Direct Messages.
The presentation addressed challenges related to student behaviour, particularly their initial reluctance to engage with the programme, which had caused delays. However, as students gained a better understanding, the programme's efficiency improved.
Regarding transactional fees, Mr Ally highlighted the need to educate students on efficient bank account usage to avoid unnecessary fees, and described upcoming value-added services planned for students.
He concluded the presentation by highlighting eZaga Holdings’ collaboration with universities and campuses to provide training and development programmes, to help students better understand the programme, and to maximise their accounts.
(See attached document for details)
Noracco Corporation on NSFAS direct payments
Mr Neal MacIntyre, Member: Noracco Corporation, led the Committee through the presentation. The focus was on the company's profile, the NSFAS project, KYC pricing, value-added services, fraud prevention, and support for students. The company's founding members had brought a wealth of experience, having held senior executive positions in banks, retail banking, and national switching. Established in 2018, the company offered various solutions, including biometric payment inquiries for large infrastructures, processing around R500 million monthly through biometric payment platforms, and providing cloud infrastructure services.
Their services also extended to mobile money platforms, interbank transfers for central African banks, card acquiring with associations like Visa and Mastercard, contactless mobile payments, interoperable payments, and exploration of blockchain and cryptocurrencies. The company operated in South Africa and several other African countries, including Nigeria, Cameroon, and the Democratic Republic of Congo (DRC), holding licences for interbank transfers, and introducing electronic IT in Mozambique. In Botswana, they managed payment card systems, and in South Africa, they focused on new banking services, particularly biometric payments for the public sector.
The company collaborated with three TVET colleges within the education sector, serving 28 156 students, of which 2 023 had active accounts. Additionally, they work with seven universities, totalling 102 144 students, with 98 104 undergoing KYC (Know Your Customer) verification. Their client base included 61 204 individuals, and transactions amounting to R1.3 billion.
Services were provided through the Payments Association of South Africa (PASA) and affiliated banking licences, ensuring customers have access to suitable bank accounts and financial services. In South Africa, Access Bank was one of their partners.
KYC was a central aspect of their operations. They prioritise institutions based on KYC statistics, intensifying efforts where rates are low, and employing various communication channels to engage students. Most students could independently use online platforms for registration. Regarding pricing, they emphasise cost-effective transactions, offering monthly fees as low as R3.50 for withdrawing all funds. Measures were in place to prevent extra fees due to late payments, including promoting financial literacy, standardising pricing with partners, and offering cash-back loyalty programmes.
They continually expand services for students, collaborating with service providers for value-added offerings. To address suspected fraud, they educate students about password security and emphasise the importance of not sharing one-time passwords, while also encouraging care of bank cards and PINs. Awareness campaigns include posters on campuses and pop-up messages on their platform. Students must accept these messages before proceeding with transactions. Students could also take control by blocking accounts, cards and transactions through their app, or by contacting the support centre.
For university students, token-based passwords through Google Authenticator enhance security. Transaction limits are managed to prevent overexposure, and a strict protocol is followed for suspected fraud cases. Support services were available round-the-clock through a toll-free number and email support. In-person support sessions with institutions were conducted at strategic times.
(See attached presentation for details)
Coinvest Africa on NSFAS direct payments
Mr Thami Mazibuko, Project Manager, Coinvest Africa, introduced the company's background and its role in the NSFAS direct payment programme. Coinvest Africa was a technology group with a mission to enhance lives and empower society through technology. They offered state-of-the-art mobile and desktop technologies for secure financial transactions, and held partnerships with financial institutions like Nedbank and Mastercard.
However, the NSFAS direct payment programme has faced various challenges. These challenges included difficulties in onboarding students, delays in allowance disbursements, communication issues with their call centre, and resistance from certain university management and SRC bodies. Additionally, concerns had been raised about higher account fees.
To tackle these challenges, Coinvest Africa implemented a multi-pronged approach. They were intensifying engagement with institutional management and SRC bodies to ensure cooperation. They were also streamlining query logging and automating responses to improve user experience. Ongoing collaboration with NSFAS aimed to resolve on-the-ground issues, and there was an increase in call centre capacity. Furthermore, they were working on making fees more affordable for students and launching value-added services tailored to students' educational journeys. A visible on-ground presence would facilitate onboarding and issue resolution.
In conclusion, Coinvest Africa was committed to overcoming challenges in the NSFAS direct payment programme, and strived to empower students while promoting financial accessibility through technology. They continued to refine their processes to better serve their partners and the student community.
(See attached presentation)
The Chairperson opened the discussion by referring to a prior Committee meeting held in February 2022. During this meeting, the Committee delved into various reports presented by the Ministerial team, which encompassed topics such as black academics and 4th Industrial Revolution (4IR) entities. One of the key highlights of that meeting was the presentation of the Ballim Report, which focused primarily on scrutinising business processes, systems, and the overall capacity of NSFAS.
She went on to provide a list of Members who had attended the presentation of the Ballim Report, pointing out that the two EFF Members who had been excluded from the meeting, were absent since they were not Committee Members at the time.
She asked the Committee Secretariat to share the meeting minutes and presentation materials from that meeting. She highlighted the Committee's persistent efforts to obtain the complete Ballim Report, expressing disappointment at not having received it to date. With a courteous tone, she urged the Director-General to furnish the Committee with the full report.
The Chairperson also voiced her disappointment at NSFAS for not delivering the anticipated responses. She stressed the utmost importance of receiving thorough written responses, and ensuring these responses were provided within the coming week.
In emphasising the Committee's pivotal role as one of the highest decision-making bodies in the National Assembly, she underlined the need for top officials of service providers, including CEOs, to be present during interactions with the Committee. This presence was deemed essential to instil confidence in their leadership.
Acknowledging the presence of eZaga Holdings' Group CEO, the Chairperson sought clarity regarding Mr MacIntyre's position at Noracco Corporation. She strongly emphasised the significance of having high-ranking officials in attendance during Committee meetings, stressing the need to respect the platform's importance and the profound responsibility it held in representing the interests of millions of South Africans.
The Chairperson sought clarification from NSFAS on the term "registration template errors," and expressed her understanding of Members' concerns regarding the slow distribution of bank cards due to issues related to KYC and incorrect data.
Regarding the point in NSFAS's presentation about students being unable to differentiate between NSFAS and service providers, she stressed that students should not have to differentiate between the two entities, pointing out that service providers acted on behalf of NSFAS, and any glitches or issues with the service providers reflected on NSFAS as well. Concerns raised by service providers about students reporting unrelated issues highlighted weaknesses in NSFAS's query resolution system because of a call centre that was always non-functioning.
The Chairperson also raised questions about the process of finalising the position of a new CEO while investigations into matters affecting the office of the CEO were ongoing. She expressed concern that the decision to appoint a new CEO appeared to be based on preliminary reports, and sought clarity on this matter.
She questioned why NSFAS had not informed the Committee about the decision to appoint a new CEO before concluding investigations.
The Chairperson directed her questions to Tenet Technology regarding the disbursement of funds to university and TVET college students. She noted that 181 054 students were being served by Tenet Technology, out of which 156 949 had completed KYC registration. However, only 144 396 students had received payments, and she sought an explanation for this discrepancy.
She also inquired about the delay in receiving payment files from NSFAS. She requested further details on what was meant by "political interference" that had hindered student registration on Tenet Technology's platform.
She asked for an explanation regarding the issues at Wits University, where some students had not received their allowances, adding that there were reports of payment discrepancies for August and September.
She pointed out the discrepancy between the terms "FET colleges" used by service providers and "TVET colleges," and asked for clarification from the Department on this terminology.
She requested more detailed information from Tenet Technology about the payments made to students, specifically wanting to know how much was paid to each institution and for each month.
She emphasised the need for a more comprehensive database to close the gap between NSFAS claiming to disperse allowances, and students reporting non-receipt of their allowances.
The Chairperson expressed concerns about the Noracco Corporation presentation, and noted that it did not provide much relief or address the Committee's current concerns.
She said she would return to ask questions on the points raised by eZaga Holdings once she had a chance to review her notes.
Committee Member's comments and concerns
Ms K Khakhau (DA) said that a whole month had been allocated for NSFAS and its partners to regain the Committee's confidence. However, from the start of the meeting until that moment, she had had an ongoing struggle to identify the source of this expected confidence.
She commented that during the meeting, NSFAS had presented their case in a manner she described as vague, lacking specific details about how they intended to address the system's issues. In contrast, the partners were expected to have provided extensive information about their mandates but fell short when it came to elucidating the core problems confronting the system. She asked what had caused the hold-up that had led many students’ livelihoods being disrupted as a result of the delay.
The central issue appeared to be a lack of accountability. NSFAS contended that they had correctly disbursed funds, while service providers pointed fingers at NSFAS for delaying fund transfers. This lack of accountability was a source of concern, as she believed it might render the meeting futile due to the inability to make meaningful recommendations.
She raised several unanswered questions, including inquiries about the reasons behind students being deregistered, the fate of funds already paid to students who did not qualify for this academic year, variations in banking fees between partner distributors and major banks, and the proposed enhancements in communication capacity. She underlined the importance of specificity in these proposals.
Ms Khakhau also sought clarification on the student accreditation process, highlighting discrepancies in figures presented at the meeting compared to those provided to the Committee on 6 September. She highlighted the need to understand the reasons behind these discrepancies and the importance of ensuring proper quality accreditation of student accommodation.
She also expressed the need for orientation for students regarding the KYC processes, especially those from rural areas who might face challenges with card variations.
She expressed curiosity about how NSFAS decided which service provider would distribute funds to each institution. She noted that having these details would be beneficial moving forward.
Ms C King (DA) also expressed her dissatisfaction with the presentations, particularly the NSFAS presentation, saying it felt like a recap of previous information presented in a different format. She specifically referred to slide 13, where she noted discrepancies in the percentage of institutions onboarded.
She questioned the accuracy of the numbers, stating that the previous calculations had been incorrect. She referred to variations in percentages, such as a decrease from 93% to 90% in the KYC execution. She also raised questions about the upcoming report from the teams sent out to engage TVET colleges and institutions, emphasising the need for specific dates for the report's finalisation and stakeholder engagement.
She commented on the remarks made by NSFAS regarding the announcement of a new CEO and the Werkmans Attorneys' incorporated report. She inquired about the status of Andile Nongogo, and the allegations of changing tender requirements. She urged the organisation to provide clarity on this matter, as NSFAS was indicated as having received the report which might have found the previous CEO guilty of favouritism when it came to awarding tender contracts to service providers such as Coinvest Africa and others. What was going to happen to these contracts? There was a looming court case of fraud.
Moving on to the ICT system, Ms King expressed her desire for an update on the WhatsApp system's progress, which NSFAS intended to incorporate for a more seamless process. She also revisited her previous unanswered questions regarding ICT spending, which amounted to R65 million in the first budget. NSFAS had also received an additional R54 million in Budget 2 for the ICT system. She stressed the importance of clearly communicated payment dates to ease students' anxiety.
Ms King addressed the issue of accommodation accreditation, raising concerns regarding the disparity between paid beds and accredited beds. Initially, NSFAS had faced a shortage of beds, but the latest report indicated a significant increase in accredited beds. She inquired about the completion of the vetting process and whether all payments made for student accommodations had been directed towards accredited service providers. If the vetting process was not done, she suggested it might result in irregular expenditure in the upcoming fiscal year. If the vetting process remained incomplete, there was a risk of NSFAS employees applying for, and obtaining, accreditation to provide housing for students. She criticised NSFAS for lacking an ICT system for accreditation, and questioned various aspects of the accreditation process, including the vetting procedures and the associated costs per bed.
Regarding direct payment service providers, Ms King sought clarification on whether students needed to verify themselves monthly to access allowances, and questioned the cost structure for service providers. She also inquired about the status of Access Bank, and whether NSFAS was still considering them as a partner.
She stressed the importance of transparency in the process, particularly regarding the involvement of small and medium-term enterprises (SMEs) in service provider contracts.
She expressed her interest in the comprehensive funding model, the eligibility criteria for the 2024 academic year, and the investment report. She anticipated potential fraud cases and legal action arising from irregular contract awards.
She also raised concerns about the financial implications of hiring auditing firms, especially considering NSFAS's limited budget for administrative costs. She questioned the estimated cost of R2 million for Werkmans Attorneys' services, and why the invoice had not been issued.
Mr T Letsie (ANC) said the Committee supported direct payments, as evidenced by numerous meetings held before the decision was taken. The decision resulted from universities taking an excessive amount of time to disburse student allowances. The Committee did not support the current situation, where 93% of students were onboarded, as mentioned by the service providers, leaving 7% of students without their allowances. He questioned the service providers about the reasons for these delays, emphasising that the Minister had mentioned the allocation of R48 billion for 2023 to ensure access and success for the poor in post-schooling. However, the Committee had heard about challenges related to allowances.
He referred to a question by a Member about accreditation and the excessive amount of money paid for accreditation, where the funds disbursed did not match the number of accredited beds. He clarified that there were accredited beds managed by universities. The NSFAS-accredited beds process was relatively new and did not imply that funds were being paid to unaccredited service providers.
He welcomed the sentiments expressed by an NSFAS representative regarding a team formed to address the accreditation of student accommodation. He stressed the importance of accreditation in placing students in suitable living conditions. Some accredited student accommodation had faced corrupt demands for bribes from university systems when seeking accreditation. Some of these businesses had had to borrow money for renovations, and were now at risk of repossession by banks due to loan repayment challenges. These small businesses, which were gaining accreditation, contributed to job creation and South Africa's economy. He highlighted the urgency of the team's efforts to resolve accommodation issues, starting from the week of 9 October. Service providers should be informed timeously of their accreditation status for the year 2024.
Mr Letsie highlighted a persistent problem, saying it was unclear whether the issues experienced in July 2023, during the improper disbursement of allowances, had been resolved. Some students still had not received their allowances, and who to blame was uncertain. He posed a hypothetical scenario about deceased students, and questioned how the service providers could determine this status. He inquired whether there was any relationship between the service providers and the Department of Home Affairs to identify deceased students.
Addressing Tenet Technology, he sought clarification on the reasons preventing the distribution of funds to approximately 80 000 students under their care who had not received allowances. The issue of disbursing funds was crucial, as some students lacked alternative financial support and may resort to sex work, a situation that had been reported in various media outlets during the COVID-19 pandemic.
He questioned eZaga Holdings regarding the 2 183 students who could not be located despite numerous communication attempts. He found it difficult to believe that students in need of financial aid could not be located, suggesting that he could personally visit a university and identify students facing disbursement problems. He sought information on the mechanisms eZaga Holdings was using to locate these students, and whether they had personnel interacting with the students. Similarly, he noted that 2 274 students could not be found in TVET colleges, and described the situation as "horrible."
Regarding Noracco Corporation, he asked why approximately 100 000 students were under their purview, with 3 443 not KYCd. He inquired about how these students were receiving their allowances, if at all, and whether they used virtual cards.
Turning to Coinvest Africa, he raised concerns about the 30 344 students who were not KYCd, questioning how they were expected to manage without allowances. He also highlighted the nearly 48 000 students, many from the University of South Africa (UNISA), who were not KYCd and lacked virtual cards, emphasising the importance of ensuring the timely disbursement of allowances.
Mr Letsie asked whether Coinvest Africa was registered as a financial service provider (FSP), seeking further details about this registration.
He also posed a general question to all service providers regarding their staffing levels under the NSFAS project, considering the possibility that they might be understaffed.
Regarding the funds allocated to students who had not received allowances, he asked whether these funds were in the service providers' accounts, potentially generating interest. He questioned the certainty that service providers were not creating the crisis to generate income or interest.
Lastly, he referred to slide 14, which presented a table of companies' fees provided by NSFAS. He pointed out that the fee structure suggested that the current service providers might not be the most cost-efficient. He compared the fees of various banks, and emphasised that Members should avoid using the Committee to serve political agendas, mentioning Capitec Bank's alleged funding of the DA, and questioning its cost-effectiveness based on NSFAS's fee structure, as alluded to by Ms King.
Mr B Pillay (ANC) began by acknowledging a couple of disadvantages. First, the late hour -- 9:00 pm after starting the meeting at 5:00 pm -- and second, following Mr Letsie, who had already covered much ground. Despite this, he wanted to underscore a crucial point raised earlier, which was also one of his initial questions. He inquired whether these service providers received the full allocated amount for all beneficiaries. If they indeed received the full sum for all beneficiaries, it implied that when they failed to disburse payments to around 80 604 beneficiaries, that money remained in their bank accounts. This unutilised money would persist until students completed their 'Know Your Customer' verification process or received their due allowances.
Further, concerning the presentation delivered by Tenet Technology, he noted that they had presented an updated version for the current meeting. However, when reviewing the presentation shared on 19 September, it had been presented in a narrative format and had focused primarily on a table depicting charges imposed by various banks.
This raised questions about the decision to contract these four service providers. Information provided by these service providers indicated that traditional banking institutions offered significantly lower charges compared to the service providers. This decision left him puzzled.
He also sought clarification on whether these service providers had received a template to prepare their presentations. Notably, there seemed to be a common pattern among the presentations, prompting him to question whether they had access to a standard template or guideline.
Moving on to each service provider, he expressed interest in understanding Tenet Technology's background and client profile, noting that it claimed to have had clients since 2013. He wished to know who some of these clients were, and the specific services it provided to them. It had also mentioned receiving a banking licence from a commercial bank, and he inquired about the identity of this commercial bank. There was a significant discrepancy regarding the figures they had presented, as they stated there were 225 000 beneficiaries, but only 57 615 cards had been distributed. This raised concerns about the remaining 80 604 students who had not received their allowances or authentications.
He inquired about eZaga Holdings' clients and prior work experience. Despite having a better KYC record, with 113 318 out of 115 466 students KYC verified, only 82 064 students had cards. He also wanted insights into their fee structure and the financial implications for students. If students were charged for each R100 withdrawn, the students were left with nearly nothing.
He expressed curiosity about Noracco Corporation's background, previous clients, and the nature of its previous work. Although their KYC record appeared reasonable, with only 3 443 students not KYC verified, it was unclear how many students they had actually paid. Their fee structure was another area of interest, as it impacted students financially.
He also sought information about Coinvest Africa's background, prior clients, the nature of their previous work, and their fee structure.
Ms D Sibiya (ANC) immediately directed her questions to Tenet Technology, raising concerns about the excessive costs associated with card delivery and replacement fees for students, particularly in cases where students' cards were stolen. She inquired if there were more cost-effective alternatives available, and sought insights into the expected transactional behaviour of students under the current fees model.
Turning to Noracco Corporation, she asked about the process in place to reimburse students who may fall victim to scams, and queried the specific challenges Noracco Corporation was addressing, as per NSFAS's communication.
She sought clarification regarding eZaga Holdings' calculation of Know Your Customer verifications, asking whether they pertained to 2022 or 2023 and the reasons behind the backlog of pending KYCs.
Mr S Ngcobo (DA) focused on NSFAS and its operational approach. He raised questions regarding the criteria employed to select the ten universities and 20 TVET institutions for on-site visits, particularly considering other institutions were facing similar challenges. He also inquired about the timeline for the board to submit its report to the Minister.
He sought answers from Tenet Technology about onboarding students and the disparities in the number of students onboarded compared to the total student population under its care. He asked about the challenges encountered and the mitigation measures in place, including communication with NSFAS. He also inquired about the response from NSFAS regarding these challenges and the associated ICT issues.
Regarding eZaga Holdings, he highlighted the issue of missing student contact information in the onboarding process. He questioned the steps being taken to obtain this information to enhance communication with students.
Ms Mananiso commended the direct engagement between the Committee and the service providers, emphasising its significance.
She echoed the sentiment expressed by other Members regarding the need for a written presentation from NSFAS, outlining a seven-step process in a tabulated format to enable effective oversight. She stressed the importance of aligning these steps with SMART (specific, measurable, achievable, relevant and time-bound) principles. She called for the provision of a detailed programme of action, including resolutions. She also urged the use of a consultant to implement turnaround strategies, emphasising the significance of human capital with specific authority in stabilising NSFAS.
She requested a detailed report on the utilisation of funds within each department , focusing on whether they delivered value for money.
She also inquired about the specifics of consequence management at NSFAS, mindful of issues that may be sub judice, and requested information on actions taken in this regard.
Concerning the allocation of universities and TVET colleges to service providers, she sought clarification on the process employed.
Regarding Coinvest, she noted the challenges highlighted in slide six, and questioned the accessibility of their call centre, noting her own difficulty in attempts to contact them.
Ms Mananiso called for comprehensive reports from all service providers on universities that were uncooperative, including SRCs and university management teams These reports should provide insight into any disparities between the report and on-ground realities. She highlighted the need for separate reports for each university and TVET college, detailing how service providers had been unable to provide assistance.
She stressed the need for a detailed report on fraudulent cases per institution, seeking an understanding of the current situation.
Ms Mananiso highlighted the unstable relationship between NSFAS and the service providers, underscoring the lack of communication and cooperation, which she deemed counterproductive to the shared goal of providing access to higher education for disadvantaged students.
She requested a summary report from Tenet Technology on the media and political influence, and for suggestions on how service providers could address misinformation. What actions could service providers take to dispel misconceptions and provide accurate information?
On top of that, the Committee had to acknowledge that the service providers had had different campaigns to ensure that the students were aware of their services. Could the service providers indicate in writing what was causing delays in terms of KYCs, and what was needed to deal with the backlog?
Mr Yabo said he wanted to add depth to the discussions already covered during the presentation by NSFAS. He began by emphasising the need to understand the process that had led NSFAS to select the service providers for direct payments. He also highlighted the importance of conducting interoperability tests to ensure that the systems effectively worked together on both the NSFAS and the service providers' sides.
He raised concerns about data transfer delays between NSFAS and the service providers, emphasising the direct impact on the timing of disbursements to students. He questioned whether a dry run or testing phase occurred before the official commencement of contractual obligations, to identify and address any potential challenges. He stressed the importance of considering the human aspect of the process, as every student affected by these issues represented a real individual facing financial difficulties.
He expressed dissatisfaction with the perceived lack of detail in the presentations, especially regarding the human resource capacity deployed by these companies and the specific challenges they encountered. He mentioned the issue of the allocated 225 000 students, and questioned whether the service providers had the necessary capacity to handle this project effectively.
He sought clarity on the interoperability of systems, particularly the call centres, between NSFAS and the service providers. He raised questions about the processes in place for addressing problems, especially when issues arose from the NSFAS side.
He expressed scepticism about the rush to implement the project, and stressed the need for thorough testing and problem-solving before the full-scale rollout. He emphasised the importance of addressing the vulnerabilities of students who relied on these services.
Mr Yabo called for solutions to address the interoperability challenges between NSFAS and the service providers, and suggested that NSFAS may lack the capacity to fully integrate with these companies.
He questioned the service level agreements (SLAs) between the service providers and NSFAS concerning fees. He asked for clarification on the agreements, and whether there was any agreement on new fee structures.
He said some service providers had mentioned political interference and resistance from university management and SRCs regarding direct payments. He questioned whether a stakeholder management plan had been implemented to address these issues and ensure smooth cooperation.
He concluded by expressing the Committee's frustration with the ongoing problems and delays in resolving issues. He demanded accountability, suggesting that heads should roll if the agreed-upon resolutions were not implemented promptly. He highlighted that these problems were affecting students and needed urgent resolution. Finally, he inquired about the apparent disparity between the university and TVET sectors in terms of the system's effectiveness.
Chairperson's closing comments
The Chairperson expressed appreciation for the participation of all Members, and outlined the approach for the closing remarks. Each service provider would have two minutes for their closing remarks, followed by ten minutes for the chairperson and CEO of NSFAS. Finally, the Minister would be given an opportunity to speak.
She highlighted the importance of the investigation report into NSFAS and its service providers. This report was expected to address numerous concerns raised during the meeting, particularly regarding the capacity of the service providers, the selection process, and the timeframes involved.
She also mentioned the need for clarity on the appointment of the CEO of NSFAS, given ongoing investigations. The report from the investigation would guide decisions related to the CEO's position.
She requested detailed breakdowns from the service providers, including the number of students they were supposed to fund, the number they had successfully assisted, the number with active cards, and the number paid each month. This information would provide a clearer picture of their performance.
The Chairperson called for a financial literacy plan and consolidated oversight, to ensure that all students were KYC compliant and understood financial matters. Collaboration between NSFAS and the service providers during visits to the institutions was also encouraged.
In conclusion, she emphasised the need for swift action and written submission from the service providers within the next seven working days, particularly regarding student-related data, to facilitate the timely disbursements of allowances.
Service providers' responses
Mr Mazibuko expressed gratitude to the Committee for the opportunity to present, and committed to addressing all the questions raised within the next seven days.
The Chairperson requested a written apology from the top-tier leadership of the institution for their absence from the meeting, along with the responses to the Committee's questions.
Mr MacIntyre acknowledged the concerns raised, and expressed the corporation's commitment to improving services for students. He mentioned the presence of executive officials in the meeting, including the Chief Operating Officer (COO) and the Chief Information Officer (CIO).
When the Chairperson inquired about the CEO, Mr MacIntyre responded that the CEO was travelling at the moment. The Chairperson then requested a written apology and responses from the Corporation.
Mr Ally expressed the need for a few days to consult with his teams to provide detailed responses to the questions related to line items and operational matters. He highlighted the commitment to ensuring the project moved in the right direction.
The Chairperson acknowledged his request.
Mr Passmore thanked the Chair for the opportunity to present, and assured the Committee that they had taken note of all the questions and operational challenges. He confirmed their intention to provide a response within the stipulated seven working days.
The Chairperson sought clarification on Mr Passmore's position as CEO, as it was not indicated in the programme.
She expressed the need for substantial information when sending responses, to address student concerns effectively.
The Chairperson thanked the service providers for their responses, and handed over to the chairperson and CEO of NSFAS for their responses.
Mr Khoza said that he would like to address some of the matters raised on behalf of his colleagues from the board and management. In response to comments about whether the report would address the substance of the matters raised by Members of the Committee during the evening's meeting, his opinion was in the affirmative. He said the terms of reference covered the areas that had been raised, and as a result, he would refrain from delving into any of the comments made by the service providers. Instead, he assured the Committee that the report would provide conclusive responses with a measure of good authority.
Mr Khoza corrected a misunderstanding that had arisen twice during the meeting. There had been a reference to Mr Nongogo, who was still the CEO of NSFAS, as not being part of the staff anymore. He clarified that Mr Nongogo remained the CEO according to his employment contract, and should be treated with the respect that his position warranted. Additionally, he clarified that the reference to the COO position, which differed from the CEO position, may have caused the misunderstanding.
He also responded to a misunderstanding concerning NSFAS's relationship with accommodation providers. He explained that NSFAS had not made direct payments to accommodation providers yet. Concerns had been raised about students staying in sub-standard accommodation, such as squatter camps, which NSFAS took seriously. He highlighted that their accommodation policies aimed to rectify such situations, and ensure quality accommodation for students. He highlighted the significance of this project, with R13 billion paid in 2023 alone. He projected that by 2043, this amount would reach just under half a trillion rands due to the increasing number of students enrolling each year.
Mr Khoza also addressed a question about when NSFAS would submit a report to the Minister. He said he was unsure which report was being referred to. They had received directives from the Minister on various issues, and had submitted reports accordingly. He affirmed their commitment to responding to the Minister's directives as they arose.
He would hand over to the Acting CEO, Mr Ramorwesi, to address other related areas, and they would provide further written responses to the Committee on the remaining issues.
Mr Ramorwesi began by addressing the matter of student accommodation accreditation. He said the total number of beds applied for in the portal had increased from 93 424, as reported in the previous meeting on 6 September, to 247 835. Additionally, the number of beds paid for by the accommodation provider to prepare for accreditation had risen to 69 519 from the previous figure of 58 444. He emphasised that this increase was due to the accommodation providers' efforts. The total number of activated beds was around 5 803, and this figure had previously been reported as 21 903. A pilot project on student accommodation had commenced, and the accredited beds would be used in this pilot to place students in identified institutions.
Addressing the issue of banking fees, he explained that NSFAS had been working closely with service providers from the beginning to negotiate costs. Initially, they had reached a benchmark cost of R89, which was later reduced to R29 after consultations with students. Furthermore, they had agreed on a bank account cost of R12, which covered pay-as-you-go fees and transactional items. He assured the Committee that they were still in the process of negotiating and finding ways to reduce these costs where possible.
The Chairperson inquired about the timeline for the reports from the ongoing investigations related to service providers.
Mr Khoza responded that the reports would be ready within ten days. However, he requested to come back to the Committee with a specific presentation date.
The Chairperson agreed, emphasising that the reports should be completed within the ten-day timeframe.
The Chairperson thanked the chairperson of NSFAS, the acting CEO and other participants, and handed over to the Minister and the Deputy Minister.
Minister's closing remarks
Minister Nzimande began by acknowledging the Committee's efforts in addressing the issues raised. He clarified that the press conference he held a few weeks ago had been based on responses and immediate interventions by NSFAS in response to his queries. These interventions included sending teams to institutions to identify students who had not been paid.
He highlighted the importance of addressing fraud and corruption ruthlessly, even if it involved students and their parents. He urged the Committee not to go soft on such matters, and to support the government in fighting corruption.
He also touched on the issue of the Ballim Report, mentioning that some Committee Members may not have been aware of its existence due to changes in Committee representatives. He thanked the Committee for clarifying this matter.
The Minister then expressed concerns about the separation of powers, highlighting that certain instructions given by the Committee could infringe on the powers of NSFAS management, the board, and even his own powers as the Minister. He stressed the importance of respecting the separation of powers in a constitutional democracy, and cautioned against issuing instructions that may not be enforceable. He urged the Committee to be mindful of not overstepping its oversight role and potentially setting problematic precedents.
The Chairperson acknowledged the Minister's comments, and suggested that a Committee Member wanted to speak.
However, the Minister asked to be allowed to finish his remarks before allowing any further comments or questions from the Committee.
The Chairperson respectfully informed the Minister that he could not decide on how the Committee meeting should be conducted.
The Minister said that he had been given a chance to speak.
The Chairperson asked if she could be allowed to note a hand that had been raised, but the Minister refused.
The Chairperson noted the raised hand, and inquired if it was a point of order.
The Minister requested an opportunity to respond, emphasising that the raised hand should not disturb him.
The Chairperson explained that she would take the raised hand to find out its purpose.
Ms King explained that the Committee had not instructed anyone, but had simply asked for the format of the presentations to be provided within seven days.
The Chairperson asked for an opportunity to respond later.
The Minister concluded his remarks, expressing concern that the Committee might be exceeding its powers by issuing instructions. He might need to involve higher authorities, as such instructions could usurp the powers of NSFAS management, the NSFAS board, and his own ministerial powers in terms of intervention. He stressed that oversight should not involve issuing instructions, since they could not be enforced, emphasising the importance of respecting the constitutional separation of powers.
The Chairperson thanked the Minister, NSFAS colleagues, and service providers. She emphasised that Parliament had allocated funds to government departments and entities, which had then delegated the responsibility of dispersing and managing these funds to service providers on behalf of the citizens. She noted that the Committee had received numerous concerns about students not receiving allowances on time, or not receiving them at all.
She clarified that they were requesting information from service providers to ascertain whether allowances had been dispersed to students, which institutions were affected, the number of students involved, any shortfalls, and timelines for dispersing allowances. This request was based on legal advice, and was within their rights as a Portfolio Committee to ensure transparency and fulfil its functions.
Regarding the seven-point plan, the Chairperson encouraged NSFAS to expand it to all institutions, and integrate service providers to promote financial literacy. She highlighted the goal of ensuring that all students could access their allowances, and that they were properly registered for direct payments.
She acknowledged the increase in aid and accommodation accreditation mentioned by the CEO. She expressed hope that this dedication and commitment would continue.
Regarding human capacity concerns, she appreciated the CEO's roadmap for restructuring and expansion. She requested more detailed information about the current capacity, its adequacy, expansion plans, potential shortfalls, financial implications, and timelines for recruitment. This information would help the Committee to understand NSFAS's plans for increasing its capacity and fulfilling its role more effectively and efficiently.
The Chairperson brought the meeting to a close by addressing various issues. She highlighted the need for timely written responses to the Committee's questions, particularly highlighting those responses from a month ago that had not been received yet. This was seen as a critical aspect of ensuring transparency and accountability in the operations of the institutions involved.
She also touched briefly upon the upcoming programme for the next term, mentioning that some Fridays would be designated as plenary days, which might impact the Committee's work. This scheduling adjustment was framed as a challenge they would have to navigate.
Concern over leaked letter
However, one of the more significant points made during this part of the meeting came from Mr Letsie.
Mr Letsie raised a concerning matter regarding a leaked letter addressed to the Chairperson from the Minister. He explained that the meeting had initially been scheduled for two weeks earlier but had been postponed at the Chairperson's discretion. During that time, Members received a letter from the Chairperson, which they were supposed to deliberate privately to avoid misinterpretation or taking things out of context.
Mr Letsie expressed his concern that this private letter had been leaked to the public, specifically on a Facebook page, by one of their fellow Members, identified as Ms Khakhau. He considered this act a breach of conduct and confidentiality. The leaking of the letter had made its contents available for public scrutiny, and had potentially compromised the Committee's ability to deliberate on its contents privately.
He also mentioned that in a meeting that took place with representatives from UNISA, the University of Cape Town (UCT), and the University of Fort Hare, the universities had raised concerns that the media had contacted them before appearing before the Committee. Specifically, they were contacted regarding certain contents of their presentations, which had not been made public at that time.
This situation was seen as problematic, because the media had access to information that was not yet available to the public or the Committee itself. It implied that confidential or sensitive information had been shared prematurely with external parties, potentially affecting the proceedings and fairness of the Committee's discussions with the universities.
Mr Letsie called on the Committee to take the matter seriously. He suggested they approach Parliament, possibly through the Chair of Chairs, or by writing to the Ethics Committee of Parliament. He proposed seeking guidance on how to address this act of sharing a confidential letter with the public. He believed that such ill-discipline by a Committee Member should be appropriately addressed to uphold the principles of integrity and confidentiality within the Committee.
The Chairperson acknowledged Mr Letsie's concerns, and said they would seek advice on handling this issue effectively. This indicated that the matter was taken seriously and would be addressed through the appropriate channels within Parliament.
The Chairperson urged Committee Members to recognise the challenges they were facing collectively. She referred to their work as a "mammoth task," and emphasised the importance of their combined efforts over the past four years.
In her concluding remarks, the Chairperson expressed her commitment to ensuring that young people had access to higher education, and highlighted the progress made by the Committee in this regard. She cited examples like the Community Education and Training (CET) programme, and increased infrastructure investment in education. She acknowledged the challenges and frustrations faced by Committee Members in meeting targets and responding to queries and concerns.
She highlighted the importance of maintaining the integrity and quality of the Committee's work, and pleaded with Members not to engage in partisan politics. She mentioned a recent incident where information meant for the Committee had been leaked to social media platforms, underscoring the need for trust and integrity in the Committee's operations.
The Chairperson encouraged Members to use appropriate channels and platforms for raising concerns or suggesting agenda items. She reminded them of their collective responsibility to complete their work, especially with elections approaching. Despite differing views and manifestos, she stressed the importance of finding common ground in upholding constitutional values, such as equality, poverty alleviation, and addressing societal issues.
She concluded by urging Members to focus on their shared goals and responsibilities, emphasising that the Committee's strength came from its ability to work together despite political differences. She thanked the Members for their dedication and commitment to their work.
The meeting was adjourned.
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