The National Student Financial Aid Scheme (NSFAS) and the Special Investigating Unit (SIU) have welcomed a judgment by the Western Cape High Court declaring procurement processes and service agreements related to the student funding payment system unlawful and invalid.
The ruling was delivered in the matter of eZaga Holdings (Pty) Ltd v NSFAS and Others (Case No. 9526/2024).
In a joint statement issued on Saturday, NSFAS and the SIU said the judgment marks a significant milestone in the unwavering commitment to uphold good governance, transparency, and accountability in the administration of public funds.
The court found that the procurement process undertaken by NSFAS, as well as the Service Level Agreements (SLAs) concluded with eZaga Holdings (Pty) Ltd, Coinvest Africa (Pty) Ltd, Noracco Corporation (Pty) Ltd and Tenet Technology (Pty) Ltd, were unconstitutional, unlawful and invalid.
The court also found that the procurement process was marred by a range of irregularities, including improper tender cancellations, irregular drafting and approval of bid documents, non-compliance with mandatory procurement requirements and inadequate internal controls.
The court upheld NSFAS’s contention regarding the procurement irregularities and recognised NSFAS’s constitutional duty to address these irregularities.
“The judgment not only vindicates our efforts in identifying and addressing significant governance failures but also reinforces our resolve to root out maladministration and safeguard the integrity of public procurement processes, ensuring that resources entrusted to NSFAS are used in the best interests of South Africa’s students,” the statement said.
The court, however, found no evidence that the appointed service providers were involved in maladministration, corruption or other improprieties linked to the procurement process.
As a result, the court awarded just and equitable compensation to the affected service providers, allowing them to claim reasonable expenses and profits demonstrably incurred under the now-invalidated SLAs. The process for determining these claims will be subject to strict scrutiny and independent verification, ensuring fairness and accountability for all parties.
NSFAS said it will engage constructively with the affected service providers to give effect to the compensation process as ordered by the court.
The student funding agency and the SIU reaffirmed their commitment to safeguarding public resources and restoring public confidence in the administration of student financial aid.
“We wish to reassure all stakeholders, including students, parents, and the public, that NSFAS remain steadfast in their dedication to upholding integrity and restoring confidence in the administration of student financial aid,” the statement said. – SAnews.gov.za
