Parliament Oversight of NSFAS Allowance Payment System OUTA Raises Concerns. During a recent parliamentary meeting, the National Student Financial Aid Scheme (NSFAS) came under scrutiny for the direct payment system, raising significant concerns regarding service providers and transparency.
The meeting was organized by the Parliament’s Portfolio Committee on Higher Education, Science, and Innovation in October 2023.
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Challenges in the NSFAS Allowance Payment System
More than a million students depend on NSFAS allowances, and the new payment system has drawn considerable attention. Introduced in 2022, this direct payment system faced months of challenges and student complaints, prompting stakeholders to demand answers from NSFAS.
Student Issues with the Direct Payment System
Students encountered several issues with the direct payment system, including difficulties registering, excessive bank charges, and challenges accessing their allowance funds.
Service Providers Role in the Payment System
Concerns were also raised about the service providers responsible for implementing the new payment solution for students. NSFAS had appointed four service providers – Ezaga, Coinvest, Norocco, and Tenet Technologies.
OUTA Concerns and Allegations
The Organisation Undoing Tax Abuse (OUTA) expressed concerns during the meeting, particularly regarding the presentations made by fintech service providers. These concerns included a lack of transparency, misleading information, and disrespect for the parliamentary committee’s inquiries.
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Specific Concerns Raised by OUTA
OUTA pointed out various issues, such as the failure of service providers to disclose sub-contractors’ identities, potential abuse of tendering processes, and inconsistencies in financial service provider registrations.
Another significant concern revolved around undisclosed transaction fees for transferring funds from NSFAS banking cards to personal accounts. Transparency in this regard was deemed crucial for NSFAS beneficiaries.
Service Providers Fee Reductions and Parliamentary Questions
Service providers claimed to have significantly reduced monthly fees, but Members of Parliament (MPs) questioned the feasibility of such reductions. There was also speculation that higher transaction fees might have been introduced to offset these reductions.
NSFAS Internal Investigation and Calls for Transparency
NSFAS reported that an internal investigation into allegations against its CEO, Andile Nongogo, was in its final stages. However, transparency and public access to the investigation report were requested.
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OUTA Advocacy for Accountability
OUTA noted that Minister Blade Nzimande criticized the committee’s request for more information, raising questions about its powers. OUTA stood behind the committee’s efforts to hold the minister and NSFAS accountable, emphasizing the importance of addressing issues affecting students and the use of taxpayer funding.
