CAPE TOWN, Western Cape — A deepening controversy over unapproved NSFAS administrator remuneration has prompted South African lawmakers to demand the immediate recovery of millions in irregular expenditure. Following a tense parliamentary oversight meeting, it was revealed that the National Treasury never authorized the multi-million-rand compensation packages for the student financial aid scheme’s newly appointed leadership and advisory team.
Higher Education Minister Buti Manamela conceded before the Portfolio Committee on Higher Education that the financial terms for NSFAS administrator Prof. Hlengani Mathebula and his support staff lacked the mandatory sign-off from the Minister of Finance. The revelation has triggered a severe backlash from committee members, who are now moving to claw back the funds and investigate potential criminal conduct.
Bypassing the Public Finance Management Act
The root of the crisis stems from a government gazette published on May 4, which appointed Mathebula under Section 17A of the relevant legislation. The gazette also invoked Section 17B (appointing advisors), Section 17C (remuneration), and Section 17D (dissolving the board).
According to Portfolio Committee Chairperson Tebogo Letsie, Section 17C is unequivocal: it is a concise, 19-word clause stating that the Minister of Higher Education must obtain the explicit approval of the Minister of Finance to determine the compensation for the administrator and their advisors. Minister Manamela admitted this approval was never secured, yet payments were processed. While Manamela argued that Treasury approval for the advisors was unnecessary, Letsie dismissed this as a blatant misinterpretation of the law, categorizing all dispersed funds as irregular expenditure.
Private Companies, Tax Evasion, and “Criminal” Elements
The financial misconduct extends far beyond administrative oversight. While two advisors were compensated via the standard NSFAS payroll, two others were paid directly through their private companies. Letsie emphasized that this routing not only violated the competitive bidding and supply chain prescripts of the Public Finance Management Act (PFMA) but also introduced a “criminal element” to the entity’s operations.
One of the advisors paid via a private entity is a chartered accountant registered with SAICA and serves as a board member for the Airports Company South Africa (ACSA). By channeling her earnings through a corporate vehicle—which included charging NSFAS for VAT—the advisor allegedly bypassed Section 30 of the Public Service Act. This legislation requires public servants to declare outside remuneration to their primary employer, a step the committee believes was intentionally avoided.
Invoices presented to the committee showed monthly billing rates of R204,000 and over R250,000 for these private contractors. While initial documentation suggested a total payout of R9.8 million, Letsie noted this figure was grossly understated. The committee has given NSFAS until the end of August to recover and return all irregularly dispersed funds. Furthermore, the matter will be referred to professional bodies, including SAICA, to investigate the ethical conduct of their registered members.
Flawed Stabilization Plans and Misleading Oversight
During the August 12 committee sitting—brought forward a week due to the urgency of the scandal—Mathebula’s conduct and strategic plans faced severe scrutiny. Lawmakers accused the administrator of extreme arrogance and are currently evaluating whether his testimony violated Section 17 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act of 2004, which criminalizes misleading Parliament.
Mathebula claimed he had personally vetted his advisory team through credit, criminal, MIE, qualification, and reference checks prior to their appointments, sourcing them via personal networks. The committee has formally requested documentary proof of these vetting processes, as internal NSFAS staff have disputed the thoroughness of the checks.
Additionally, Mathebula’s proposed stabilization strategy was universally rejected. He suggested a “regionalization” model—such as clustering the Northern Cape, North West, and Free State into a single hub—rather than decentralizing offices to all institutions. When pressed on how this would improve access for a student traveling 400 kilometers from Taung to Pretoria, or to provide cost projections for his model, Mathebula admitted he had merely done the “numbers in his head.”
Student Hardship and Institutional Volatility
The governance failures at NSFAS have had devastating consequences for the country’s most vulnerable students. In May, the entity defunded approximately 6,000 students, causing many to miss their June examinations. Although NSFAS conceded in July that 3,154 of these students were wrongfully defunded, they had still not received their allowances as of mid-August. Concurrently, the financial strain on the higher education sector remains critical, with NSFAS currently owing universities approximately R10.4 billion.
Internally, the entity is suffering from severe “change fatigue.” Since Mathebula assumed his role three months ago, both the company secretary and the director of corporate services have resigned, with other skilled professionals actively seeking employment elsewhere to escape the volatile environment.
A History of Administrative Overreach
Reflecting on the entity’s turbulent history, Letsie expressed a fundamental distrust of the administration model, arguing that it grants “absolute power” which inevitably leads to corruption. NSFAS has cycled through a revolving door of leadership: Randall Carolissen served as administrator from 2018 to 2020, followed by a problematic CEO team, and then Freeman Nomvalo, who departed early last year without providing a handover report. The most recent board, appointed in February 2025, was dissolved just three months later in May 2026 to pave the way for the current administration.
Despite the systemic failures and the immense pressure on the entity, the committee remains resolute in its mandate to protect the student body.
“NSFAS was created for the students, not for people with problems to solve their problems using the entity,” Letsie concluded, offering a firm assurance to the public and the university sector. “It has produced almost six million graduates who would not have seen the doors of learning without that funding. It is too important to fail, and we will fix it.”
