CAPE TOWN, Western Cape — Lawmakers are intensifying their scrutiny over the unapproved NSFAS administrator remuneration package, demanding immediate repayment after it was revealed that the National Treasury never authorized the payouts. The controversy centers on the financial terms of the National Student Financial Aid Scheme (NSFAS) administrator, Prof. Hlengani Mathebula, and his appointed advisory team, which the Portfolio Committee on Higher Education has now classified as irregular and potentially criminal expenditure.
The Legal Breach and Treasury Evasion
Higher Education Minister Buti Manamela recently conceded before Parliament that the terms of reference and salaries for Mathebula and his advisors lack the requisite sign-off from the Minister of Finance. Mathebula was appointed via a government gazette on May 4 under Section 17A of the relevant act, alongside provisions for advisors (17B), remuneration (17C), and the dissolution of the board (17D).
Section 17C explicitly mandates that the Minister of Higher Education must secure approval from the Minister of Finance to determine compensation. According to Tebogo Letsie, chairperson of the Portfolio Committee on Higher Education, this approval was never obtained. Consequently, any funds dispersed to the advisory team constitute irregular expenditure.
“There’s no two ways about it,” Letsie stated, dismissing Manamela’s assertion that Treasury approval for the advisors was unnecessary as a misinterpretation of the concise, 19-word legal provision.
Corporate Bypasses and Criminality
The financial misconduct extends beyond mere administrative oversight. While two advisors were paid through the standard payroll system, two others were compensated through their private companies. Letsie highlighted that routing payments through private entities not only bypassed the mandatory competitive bidding processes of the Public Finance Management Act (PFMA) but also crossed into criminal territory.
One prominent example involves a chartered accountant registered with the South African Institute of Chartered Accountants (SAICA) who also sits on the board of the Airports Company South Africa (ACSA). By channeling her earnings through a private company and charging NSFAS VAT, she allegedly circumvented Section 30 of the Public Service Act, which requires public servants to declare outside remuneration to their primary employer.
Invoices revealed that these private company payouts were exorbitant, with one advisor billing R204,000 and another over R250,000 per month. Letsie noted that while initial invoices suggested a total of R9.8 million, the actual figures were grossly understated.
Demands for Repayment and Proof of Vetting
The Portfolio Committee has laid out a strict remedial action plan. NSFAS has been instructed to recover and return all irregularly dispersed funds by the end of August.
Furthermore, Mathebula claimed during the parliamentary sitting that he personally vetted the advisors through credit, criminal, MIE, qualification, and reference checks prior to their appointments, sourcing them through personal networks and referrals. The committee is formally requesting documentary proof of these vetting processes, as internal NSFAS employees have reportedly disputed the thoroughness of these checks. Professional bodies, including SAICA, will also be petitioned to investigate the conduct of their members involved in the payout scheme.
Misleading Parliament and Strategic Failures
The parliamentary engagement was marred by what Letsie described as extreme arrogance from Mathebula, who allegedly treated the oversight committee with disdain. More seriously, the committee is evaluating whether Mathebula intentionally misled Parliament—an offense under Section 17 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act of 2004.
Beyond compliance failures, Mathebula’s stabilization plan faced severe backlash. He proposed a regionalization model—such as grouping the Northern Cape, North West, and Free State—rather than decentralizing offices to all institutions. When pressed by MPs 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.” The committee universally rejected the proposal.
Student Hardship and Institutional Volatility
The governance crisis has had devastating real-world consequences. In May, NSFAS defunded approximately 6,000 students, causing many to miss their June examinations. Although the entity admitted in July that roughly 3,154 of these students were wrongfully defunded, they had still not received their allowances as of mid-August. Meanwhile, the financial strain on the sector is immense, with NSFAS currently owing universities approximately R10.4 billion.
Inside the organization, staff morale has plummeted due to severe “change fatigue.” Since Mathebula took office three months ago, both the company secretary and the director of corporate services have resigned, with other skilled professionals actively seeking employment elsewhere.
Letsie expressed a fundamental distrust of the administration model, arguing that it grants “absolute power” which inevitably corrupts. The entity has cycled through multiple administrators, including Prof. Randall Carolissen (2018–2020) and Freeman Nomvalo, who departed early last year without providing a handover report. The most recent board, appointed in February 2025, was dissolved in May 2026 to make way for the current third administration.
Despite the turmoil, Letsie offered a resolute assurance to the public: “NSFAS was created for the students… 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.”