NSFAS Remains Without Key Executives. The National Student Financial Aid Scheme (NSFAS), a crucial institution responsible for ensuring access to higher education for millions of South African students, currently finds itself in a state of leadership crisis. For months, key executive positions such as CEO, Chief Financial Officer (CFO), and Chief Audit Executive (CAE) have remained vacant, leaving the organization struggling to maintain stability. This leadership vacuum comes at a critical time when the institution is under scrutiny for governance failures, inefficiencies, and administrative issues that have led to its placement under administration.
With a new NSFAS board expected to be announced in October, the road ahead for the institution seems uncertain. This article delves into the reasons behind the leadership void, the impact of the vacancies, and the steps being taken to address the issues within NSFAS.
Key Executive Vacancies at NSFAS
As of now, NSFAS is functioning without several key executives, including a CEO and CFO, whose roles are crucial for the strategic direction and financial oversight of the organization. These vacancies have persisted since the dissolution of the NSFAS board in April 2024, when the Higher Education and Training Minister at the time, Blade Nzimande, took the drastic step of dissolving the board and placing the scheme under administration.
The critical position of Chief Information Officer (CIO) has also been vacant for 11 months, adding to the instability within the organization. While these positions remain unfilled, NSFAS continues to face challenges in delivering its mandate effectively.
Governance Deficiencies and Maladministration
The leadership crisis at NSFAS is closely tied to a broader issue of governance deficiencies. These problems were highlighted when NSFAS appeared before the Standing Committee on Appropriations, where Minister Nobuhle Nkabane outlined the reasons behind the current state of the institution. According to Nkabane, NSFAS had failed to implement several key recommendations from a report by Werksmans Attorneys, a law firm that had been commissioned to investigate irregularities within the organization.
One of the most significant findings from the Werksmans report was the irregular appointment of four direct payment service providers. The report implicated six NSFAS employees who were part of the bid committee responsible for these appointments. The contracts, which were found to be improperly awarded, have been a source of controversy and are currently in the process of being terminated.
“It is clear that it is not desirable for NSFAS to be under its second administration intervention within five years,” Minister Nkabane stated. “The underlying causes are maladministration and mismanagement, which have produced corruption in the NSFAS grant payment system.”
The Role of the NSFAS Administrator
In light of these governance failures, Sithembiso Freeman Nomvalo was appointed as the new NSFAS administrator. Since his appointment, Nomvalo has been tasked with addressing the deficiencies that led to the board’s dissolution, particularly the termination of the irregular contracts. One of the service providers, Ezaga, has taken legal action against NSFAS in response to the cancellation of its contract. Although NSFAS initially lost the court challenge, the institution is currently appealing the decision.
Nomvalo has also been responsible for managing the disciplinary process for the employees implicated in the Werksmans report. Two of the six employees resigned in July 2024, while disciplinary hearings for the remaining staff members are still pending. According to Nomvalo, the level of culpability among these employees varies, with the CEO and CFO being the most severely implicated.
Special Investigating Unit (SIU) Investigation
In response to the ongoing issues at NSFAS, President Cyril Ramaphosa has issued a proclamation authorizing the Special Investigating Unit (SIU) to investigate the organization. This investigation is expected to uncover any additional irregularities and bring accountability to those responsible for the maladministration within NSFAS.
To fund this investigation, NSFAS has requested R186.908 million, a substantial amount that underscores the seriousness of the inquiry. While the Werksmans report did not find any criminal activity, Nomvalo suggested that the SIU investigation may reveal further issues that were previously undetected.
The Need for Decentralization
One of the key challenges facing NSFAS is its centralized structure, with its head office located in Cape Town. Given that the majority of South Africa’s tertiary institutions are based in or near Gauteng, there have been calls to decentralize NSFAS operations to better serve students across the country. Minister Nkabane has advocated for establishing additional NSFAS offices in Gauteng, KwaZulu-Natal, and the Eastern Cape, as well as creating a presence on university campuses.
The high cost of renting the Cape Town office, which is located on the Foreshore and costs around R2.5 million per month, has also raised concerns. Decentralizing operations could not only improve accessibility for students but also potentially reduce operating costs.
Financial Challenges and ICT Inefficiencies
NSFAS’s financial situation remains a pressing concern. At the end of the 2022/2023 financial year, the organization had a revised budget of R54.221 billion, up from R47.607 billion—a substantial increase of R6.613 billion. Despite this increased budget, NSFAS continues to face financial inefficiencies, particularly in its ICT infrastructure.
Nomvalo acknowledged that NSFAS has struggled with its ICT systems, which have resulted in incorrect payments to thousands of students. In 2024, 1,926 TVET college students and 9,112 university students received incorrect funding due to system errors. Addressing these ICT issues will be a critical priority for NSFAS as it seeks to regain its footing.
Conclusion
The leadership crisis at NSFAS, compounded by governance deficiencies, financial mismanagement, and ongoing legal battles, has placed the institution in a precarious position. With key executive roles remaining vacant, the organization is struggling to fulfill its mandate to provide financial aid to South African students effectively.