Audio recordings of presentations by nine bidders vying for multimillion-rand student allowance payment contracts with the National Student Financial Aid Scheme (Nsfas) reveal that CEO Andile Nongogo attended and participated in them.
This is despite Nsfas insisting to the Sunday Times last week that the process was independent, with Nongogo playing no part in deciding who was evaluated and having “no hand” in awarding the contract.
“As CEO Mr Nongogo does not decide on who is evaluated and adjudicated to be the entity to be awarded a contract by the Nsfas. That is done by independent bid evaluation and bid adjudication committees and Mr Nongogo, as CEO, administratively signs off, as delegated, on the awards. He does not choose who an award must be made to, so he had no hand in awarding the contract to anybody or any company,” Nsfas said in a statement last week.
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The leaked recordings of the nine meetings held in May by Nsfas’s bid evaluation committee (BEC) reveal that Nongogo — who was this week put on special leave — was invited by the BEC to the meetings as an observer and made regular comments and asked pointed questions.
His presence has been described by governance experts as inappropriate and “totally improper”.
This week, Nsfas refused to answer questions about the recordings or Nongogo’s participation, saying only that the questions “are part of the matters to be investigated by the appointed law firm”.
“Anything related to the appointment of direct payment partners has now become a matter under investigation and Nsfas will not be giving any comments until the investigation is complete.”
Nongogo did not respond to media queries sent to him via e-mail and WhatsApp.
The latest development comes as the Nsfas board this week announced that Nongogo had taken special leave and that it had appointed adv Tembeka Ngcukaitobi and attorney Sandile July to investigate various allegations against him. They will also review the entity’s procurement systems and processes.
The new student allowance scheme, introduced in July, has prompted protests at universities across the country. On Wednesday, students from Stellenbosch and Western Cape marched to parliament in Cape Town demanding that the system be scrapped.
Campuses at the universities of Zululand and KwaZulu-Natal and the Mathatha campus of Walter Sisulu University are offering lectures online due to disruptions.
The winning bidders for the contract were Coinvest Africa, eZaga, Norraco Corporation and Tenet Technology.
Last weekend the Sunday Times reported that one of the directors of Coinvest Africa, Tshegofatso Ntumba, won a R29m deal with the Services Sector Education and Training Authority (Sseta) to supply promotional items at grossly inflated prices while Nongogo was the CEO there.
The contract was awarded to Ntumba’s company, Star Sign and Print, which among other things supplied 20,000 exam pads at a unit cost of R214. The pads retail for about R21 according to the Organisation Undoing Tax Abuse (Outa) which first blew the whistle on the tender.
The Nsfas board this week said it had given Nongogo a leave of absence after several allegations were levelled against him recently about his work at Sseta “and how this may relate to unacceptable conduct in the awarding of bids at Nsfas”.
The board said that it resolved to investigate the allegations “with a particular focus on the direct payment project”.
The recordings reveal that Nongogo spent around 13 minutes making comments and questioning Nedbank’s nine-member delegation and about seven minutes with First Rand’s 11-member delegation, while the questions he posed at the end of the presentations by eZaga, Tenet Technology and Coinvest Africa were between two and three minutes.
He asked all the bidders whether the value-added services they offer could be offered to all beneficiaries and not only to those that they would be responsible for onboarding.
Another common question was whether they would be open to negotiations around standardising the price and cost.
Nongogo asked Tenet Technology how long it would take to get the physical card and whether it would be able to offer a toll-free number for its call centre.
He asked eZaga to confirm whether it would make the card Nsfas-branded if needed.
“What are the odds of the app being zero-rated?” he asked them.
He asked Coinvest Africa about the process to “unfreeze” accounts that had been frozen because of fraud.
“Expand a little on the spaza shops’ platforms you mentioned as to how it works and in another second explain what are the benefits of the QR code.”
During earlier deliberations by the BEC, a member said she was “flagging” the R75 being proposed by Coinvest Africa to replace a lost card.
Even if there is a soft type of influence, there is the big boss sitting, asking leading questions and framing a discussion that is going to impact the outcomes that more junior people in that committee takes
— Prof Susan Booysen, Wits School of Governance
During a presentation by Nedbank in the third round of the process, he asked it to respond to the assertion that “traditional banks like yourselves are not flexible as compared to fintech companies in providing us the solution that we would need”.
Nongogo also said that “what we know is that with big ships, it’s not very agile in terms of change”.
He also said: “I have forgotten to ask one question which is probably one of the most important ones for me. This is when we are going to look each other in the eye and be honest with each other. I don’t imagine and again, I am happy to be wrong, that you are doing this out of the goodness of your heart or you are looking to make money out of servicing this, right.”
“You are after our data. Now what are you going to use our data for?”
At another point, he says: “I know that you are presenting that your offering is free but there’s no such thing as a free card or banking account. What are the underlying transaction costs with this account you are offering?”
“Are we supposed to adapt to what you are asking us as a service provider or are you adaptable to our requirements? I think I didn’t quite get that in your presentation. It looked to me like we have to adapt to your requirements particularly when it comes to how we share files and how the payment process works.”
During First Rand’s presentation, he told the delegation that he was “sensing a lot of confusion in the room”.
“Let’s be clear about what we asked for. Confusion should not be about the wallet. We didn’t ask for that. We do not want that. What we want is a solution that talks to a bank card That’s what we asked for. So then let’s be clear about that. I don’t want the bid committee to be confused hence I am asking that clarity question.”
According to the recordings, a member of the bid specification committee was asked to recuse himself from participating in the BEC meetings after he declared the conflict of interest. Members may not sit on both committees.
Responding to media enquiries, Nedbank said in a statement that it went through the bid process as prescribed by Nsfas.
“The decision rests with Nsfas on who it elects and all questions in respect of the tender process should be directed to Nsfas.”
In a short statement FNB confirmed that its bid for the tender was unsuccessful and said it could not provide further comment on the matter.
Prof Susan Booysen from the Wits School of Governance said even if there may be an organisational culture that OKs senior people or the CEO to sit in on some or all of these committees, “it strikes me as inappropriate because it is beyond doubt that senior people sitting in influence the outcomes”.
“Even if there is a soft type of influence, there is the big boss sitting, asking leading questions and framing a discussion that is going to impact the outcomes that more junior people in that committee takes.”
“People in high position should take extreme care not to be seen to be influencing this type of award.”
A former senior official from National Treasury said it was “totally improper” for a CEO to sit in on a bid evaluation committee, even as an observer.
“The CEO needs to see it [the award] for the first time after it is sent by the bid adjudication committee to him so that he can make an independent judgment.
“When he sits on the BEC, he can’t then be awarding the contract at the end because that’s where the conflict of interest will arise.”
He said that by implication of having sat in the BEC, he would have already approved the award before it even went to the bid adjudication committee.
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