A company contracted to pay student allowances last month in a controversial National Student Financial Aid Scheme (NSFAS) plan is led by a director who scored a R29m deal with a training authority five years ago to supply promotional items at grossly inflated prices.
In both instances Andile Nongogo, NSFAS CEO, was at the helm of the institutions.
Nongogo was CEO of the Services Sector Education and Training Authority (SSETA) in 2018 when Star Sign and Print won a tender to supply promotional T-shirts, caps, lanyards, USB sticks and other items.
Among the goods it provided were 20,000 exam pads at a unit cost of R214. These retail for about R21, according to an investigation by the Organisation Undoing Tax Abuse (Outa).
Director of Star Sign and Print Tshegofatso Ntumba is also a director of Coinvest Africa, one of the four fintech companies that won five-year contracts with NSFAS. While NSFAS refuses to divulge how much the contracts are worth, each company is expected to make about R330m over five years.
The contracts entail paying allowances to NSFAS beneficiaries at South Africa’s 26 public universities and 50 Technical Vocational Education and Training (Tvet) colleges. The other three companies are Tenet Technology, eZaga and Norraco Corporation.
NSFAS, which is funded by the department of higher education, provides bursaries to students from poor and working-class families.
There has been a huge outcry over the controversial direct payment system, which resulted in students marching to the Union Buildings in Pretoria recently. Previously, the allowances were paid by the universities or service providers contracted by them.
According to calculations by the Sunday Times based on the 360,771 students who have so far been “on-boarded” onto the new payment system, the four companies will score R4.3m a month through a R12 banking fee deduction from each student’s R1,650 allowance before it is paid out.
This deduction excludes other charges such as for ATM withdrawals, which will cost students R10 plus R2.50 for every R100 withdrawn. A R50 replacement fee is levied for lost cards while R60 is levied for delivering it.
The Outa investigation also revealed that Ntumba’s husband, Thulasizwe Ntumba, and Makelve’s husband Artwell Makelve were involved in companies that won a SSETA contract in 2017 for the rollout of a biometric learner attendance monitoring system which was also meant to facilitate the direct payment of monthly stipends to learners.
The R162.6m contract, which was signed off by Nongogo in December 2017, was awarded to the Grayson Reed consortium which included Thulasizwe Ntumba’s company, Kulanati Financial Holdings, Artwell Makelve’s Dram Group Holdings and Grayson Reed Consulting.
It was for November 2017 to March 2020 but was terminated in September 2019 by SSETA because the consortium was found to still be paying most stipends “based on manual attendance registers”.
There exists a historical business and tender relationship between [Andile] Nongogo and the director of Coinvest
— Organisation Undoing Tax Abuse
At the time of its cancellation, SSETA had made payments of almost R170m to the service provider. According to Outa, R117m of that was paid by the service provider as stipends to students.
Nongogo left SSETA in 2018 and took up his position of CEO at NSFAS in December 2020.
On August 2 2019, a month before SSETA cancelled the Grayson Reed agreement, the Makelves became directors of Coinvest Africa which was registered as a company on the same date.
Tshegofatso Ntumba was appointed a director of Coinvest Africa on December 21 2020. Artwell Makelve resigned as director on June 30 2021.
Outa revealed that Tshegofatso Ntumba went by her maiden name Boikanyo when she was appointed director of Star Sign and Print in May 2014 and that even after marrying Thulasizwe in February 2015, she did not change her particulars on the company documents at the Companies and Intellectual Property Commission.
SSETA disburses grants to employers and skills development providers to offer training to employed and unemployed learners.
Outa said that SSETA did not supply any of the requested information and that it was only after a lengthy and costly court application on the Grayson Reed tender that it handed them over.
Star Sign and Print’s proposed quotation to SSETA for the supply of materials was R6.6m while the lowest and highest prices of the losing bidders were R125,927 and R1.7m, “making Star Sign and Print’s quotation more than three times higher than the highest losing bidder”.
While the contract period was two years, from March 2018 to March 2020, SSETA only submitted orders to Star Sign and Print in May 2018 and did not make use of the company again.
Items bought included 17,000 T-shirts; 15,000 golf shirts; 31,000 caps; 32,000 lanyards; 31,000 USB sticks; 20,000 notepads; 2,000 pens; 2,000 string bags; 1,000 key holders; 1,000 pencil cases; and 1,000 rulers.
Outa said in its investigation that it could not verify that any big roadshow was undertaken by SSETA after the items had been delivered and paid for.
It reported the Star Sign and Printing contract to then-minister of higher education Naledi Pandor, who asked the National Skills Authority (NSA) to conduct a forensic investigation. The authority found the prices were market-related.
Outa alleged that the NSA report was “of a poor standard and the findings were undoubtedly incorrect”.
For example, the NSA report found that SSETA paid R4.2m for the supply of 20,000 note pads; paid R140.79 per exam pad; and a balance of R1.4m “was for the printing of the front and back covers, inner printing, single sided UV varnish and the bounding of each exam pad”.
Outa said the NSA found that SSETA paid R4.9m for 30,000 lanyards — a price of R165.22 each. Desktop research by Outa in July last year found that the average price for a lanyard, taken from four suppliers, was R16.92.
Outa found that “there exists a historical business and tender relationship between Nongogo and the director of Coinvest”.
The Sunday Times sent detailed questions to all parties at midday on Friday.
In a statement through her public relations company, Millionsworth, Tshegofatso Ntumba said she had only been mentioned in the Outa report because of her marriage.
“The presentation of these allegations is far-fetched and does not relate to the NSFAS project.
“My marriage life and business dealings are very distant topics. I am just an ordinary South African woman, trying to be active in the business world.”
Commenting on the R6.6m quotation to SSETA, she said they bid like anybody else.
“Any enquiries about whether our prices were higher would be better answered by the SSETA.”
On Outa’s research, she said that the benchmarking used can be put up for debate but “the pricing used was part of the submissions we made to the SSETA and nothing extra”.
A woman who answered a cellphone registered to Merilyn Makelve said she was her assistant and confirmed that she had forwarded the questions to her.
She declined to give her name saying: “If she has a response, she will respond to you.”
Artwell Makelve did not respond to telephone calls and a WhatsApp message while Thulasizwe Ntumba did not respond to e-mails and telephone calls.
Nongogo did not respond to questions sent via Whatsapp to him.
Outa has publicly announced that it has laid charges with the police against Mr Nongogo, so it would be proper for Outa and the whole country to accord the relevant law authorities the opportunity to decide if Mr Nongogo has any case to answer
— NSFAS
NSFAS responded to questions with a statement saying tenders were handled and awarded by independent evaluation and adjudication committees and “not individual CEOs”.
“CEOs typically carry out the administrative function of signing off the awards as accounting officers of Setas.
“Outa has publicly announced that it has laid charges with the police against Mr Nongogo, so it would be proper for Outa and the whole country to accord the relevant law authorities the opportunity to decide if Mr Nongogo has any case to answer.”
Asked if Nongogo was aware that Tshegofatso Ntumba and Merilyn Makelve are the wives of members of two entities that formed part of the Grayson Reed consortium, NSFAS said “he is never aware of directors of winning bidders, including who they are married to”.
“The award memos requiring his signature as CEO do not list the directors of the companies concerned, and/or their marital status as well as spouses. He did not award the Grayson Reed contract; the SSETA did.
“If Tshegofatso Ntumba does business with an entity headed by Mr Nongogo, her business and tender relationship is with the entity concerned, not with Mr Nongogo or the CEO concerned. To say otherwise is to be mischievous and defamatory to the personal and professional character of Mr Nongogo.”
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