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By Faizel Patel

Senior Digital Journalist

OUTA uncovers multimillion-rand tender corruption at NSFAS

OUTA said if not stopped, this corruption can cost R1 billion per year, enough for tuition fees of 20 000 students per year.

South African civil society group the Organisation Undoing Tax Abuse (OUTA) announced it has uncovered “multimillion-rand tender corruption” at the National Student Financial Aid Scheme (NSFAS).

OUTA said its revelations follow an investigation into corruption and irregular contracts at the Services Sector Education and Training Authority (SSETA) after a successful PAIA application relating to a R170 million tender for a biometric attendance monitoring system awarded to the Grayson Reed consortium.

Special Investigating Unit

Outsa said it has handed over all information to the Special Investigating Unit (SIU)

“Scrutiny of the documents for the Grayson Reed contract uncovered further maladministration, corrupt activities, and non-performance by Grayson Reed. The Grayson Reed contract was prematurely cancelled by SSETA.

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“It was also subsequently found that some of the same individuals who were involved in the cancelled Grayson Reed, registered new companies with relatives as the directors.

“One of these companies was awarded a tender by NSFAS for similar services that the Grayson Reed Consortium provided to SSETA,” OUTA said.

Rudie Heyneke, project manager at Outa, said the investigation report into the Grayson Reed/SSETA tender will provide the SIU with the necessary background regarding the involvement of certain individuals who are now doing business with NSFAS.

Impact on Students

He said if the possible irregularities Outa uncovered at NSFAS are not investigated, it can cost the taxpayer up to one billion rand per annum if allowed to continue.

“That is enough money to pay the tuition fees of 20 000 students per year.” 

According to its website, NSFAS is meant to provide financial aid “efficiently and effectively” to students from poor and working-class families in a “sustainable manner that promotes access to, and success in, higher and further education and training.

However, Heyneke said that media reports, as well as social media, showed that this is often not the case.

“Too many NSFAS funded students don’t receive their allowances, while many students complain that their tuition fees were not paid over to the tertiary institutions where they study.”

“We have also read about students who cannot attend classes or don’t have money to pay for transport, or buy food or basic necessities because they haven’t received their NSFAS allowances.

“Many of these students are therefore unable to complete their studies, despite millions of rands being set aside by government for exactly this purpose,” Heyneke added.


Heyneke said Outa will continue with its own investigations into certain tenders at NSFAS while sharing information with the SIU.

“President Cyril Ramaphosa recently issued a proclamation for the Special Investigating Unit (SIU) to investigate maladministration at NSFAS relating to the management of finances, allocation of loans, bursaries and any other funding to students, as well as any irregular and wasteful expenditure incurred by NSFAS, including the causes of such maladministration,” OUTA said.

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