DA slams NSFAS for awarding VBS Mutual Bank a tender

A branch of VBS Mutual Bank in Thohoyandou, Limpopo. The DA said on Wednesday it was 'deplorable' that NSFAS had awarded a tender to the now defunct VBS.
A branch of VBS Mutual Bank in Thohoyandou, Limpopo. The DA said on Wednesday it was 'deplorable' that NSFAS had awarded a tender to the now defunct VBS.
Image: Antonio Muchave

The DA said on Wednesday it was “deplorable” that the National Student Financial Aid Scheme (NSFAS) had awarded a tender to the now defunct VBS Mutual Bank.

DA shadow deputy minister for higher education, science and technology, Baxolile Nodada, said NSFAS administrator Dr Randall Carolissen told parliament on Wednesday that the scheme awarded a tender to VBS to disburse allowances to students at TVET colleges.

Committee chair Mohlopi Mapulane confirmed the tender.

“This is an outrageous revelation in that NSFAS has remained tight-lipped throughout the entire VBS scandal, never once being transparent over the fact that a tender, probably worth millions of rand, was awarded to this corrupt entity,” Nodada said in a statement.

He said the party had for years been inundated with complaints from students at TVET colleges about receiving their allowances late.

“Many students have gone hungry, been evicted from their accommodation or have had to resort to loan sharks because their allowances never arrived.

“It is a deplorable fact that money meant to fund the education of deserving and poor students was awarded to VBS in the form of a tender that did not even meet PFMA requirements,” Nodada said.

“NSFAS claims that they awarded the tender to VBS in 2017, and that the contract was subsequently terminated following revelations of the VBS Heist. When the DA asked the NSFAS administrator whether anyone had been held accountable, they did not answer, and stated that the minister at the time was made aware of the tender,” Nodada added.

A forensic investigation was now under way to probe who was responsible for the decision to award the tender to VBS, he said.

“NSFAS also revealed to the committee that they now do not have the necessary infrastructure to disburse allowances to TVET students, and institutions have been left to disburse the funds themselves. This has often resulted in the money being used for other items, rather than allowances,” said Nodada.

“It is now clear that the corruption surrounding the VBS scandal transcends local government and extends to a national level.”

He said the DA had more questions for NSFAS, including how much was awarded to VBS and whether the contract was awarded before or after National Treasury warned municipalities to remove their money from the bank.

Mapulane confirmed the revelation made by NSFAS, but said Carolissen explained that the tender was cancelled before VBS could render the service.

“We were briefed by the administrator of NSFAS about the progress regarding the 2020 student intake and in the process, a member of the DA picked up that there was reference to VBS,” Mapulane explained.

He said the NSFAS administrator explained that there was a tender issued by the previous board to provide an e-wallet service for students.

“We were told that VBS was awarded the tender, but it was immediately cancelled.

“There was no service rendered and NSFAS did not lose any money,” Mapulane said.

“We are quite satisfied with the explanation. This is part of the rot uncovered by the current board,” Mapulane said.


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