The Organization Undoing Tax Abuse announced, on their website, that they will launch an investigation into tender corruption at the National Student Financial Aid Scheme.
OUTA discovered that NSFAS awarded tenders to companies with close connections to corrupt individuals. And if it were not stopped, the contract would have cost taxpayers an estimated R1 billion per annum.
Grayson Reed received a tender worth R170 million to install a biometric attendance monitoring system and to distribute stipends to students at Services Sector Education and Training Authority.
Rudie Heyneke, Portfolio Manager at OUTA, mentions that his organization was alerted to possible tender corruption at Services SETA.
They investigated the allegation, and Services SETA denied them access when they requested to view documents of specific tenders. On the basis that they were protecting the “intellectual properties” of their service providers.
After a successful PAIA application submitted by OUTA, the court ruled that Services SETA was to provide OUTA with the necessary documentation for their investigation.
According to their website, “OUTA’s scrutiny of the documents for the Grayson Reed contract uncovered further maladministration, corrupt activities and non-performance by Grayson Reed. As a result, Services SETA prematurely terminated its contract with the service provider.
Experience Islam in native languages this Heritage Day
Impact on Students
The purpose of the biometric system is to register the students’ attendance at Services SETA so that they can monitor and distribute the stipends accordingly. But this system was never installed by Grayson Reed, and students were not receiving their grants.
The concern of OUTA is that the same individuals behind Grayson Reed registered new companies under different names and are receiving tenders worth the same amount by NSFAS. And OUTA, through their experiences with Services SETA, wanted to act proactively against corruption.
“That is why we are so concerned. It was an epic fail with Grayson Reed at Services SETA. Now, the same individuals have a tender of millions of rand to do exactly the same thing. And we do not trust, and we cannot see it going to be successful”, Heyneke said.
The purpose of NSFAS is to allocate and distribute funds to students to pay for their tuition fees, accommodation and daily necessities. However, students often experience difficulties in receiving these funds, leading to delays in registration, exclusion from exams for outstanding fees and, worst of all, dropping out of varsity altogether.
Heyneke then proposes the question. Why do institutions need intermediaries such as Grayson Reed & Co to distribute student funds? Can the government pay the students directly into their bank accounts?
Action From Government
The President of South Africa, Cyril Ramaphosa, signed a proclamation for the Special Investigating Unit to look into NSFAS. To focus on how they manage and distribute the money that they receive from the government.
Heyneke states that OUTA has contacted the SIU and provided them with all the information they have gathered regarding this case and other related cases. He praised the effectiveness of the SIU, stating that they “move fast on their cases” and have already begun their investigation.
“We are pinning our hopes on the SIU to get these kinds of tenders cancelled. Luckily, they’ve got a tribunal. They don’t have to wait for court dates, that can take ages. They’ve got their own courts where they can take these matters to when they want to review or set aside a contract. And they can also refer matters to the South African Police Service for criminal investigations. And let’s hope that we can pull together and start plugging the holes and turn the country around”.
Even though the SIU will be spearheading the investigation into NSFAS, Heyneke states that OUTA will be keeping a close eye on the case while at the same time conducting one of their own.
