NSFAS announced the move during a briefing to the Portfolio Committee on Higher Education. The decision responds to findings by the Auditor-General of South Africa (AGSA) and the SIU.
The AGSA flagged non-compliance with the Public Finance Management Act (PFMA) due to NSFAS not informing National Treasury of lease cost escalations. The SIU also identified procurement irregularities and informed NSFAS of its intention to challenge the lease in court.
NSFAS submitted its application to the Special Tribunal by 30 April 2025 as a co-applicant with the SIU.
The application by the SIU at the Special Tribunal will not be premised on contractual law but public law, which governs public procurement.
NSFAS stated this legal approach aims to avoid penalties for breach of contract.
The scheme is cooperating with the SIU's investigation under Proclamation R.88 of 2022, which authorises scrutiny of NSFAS operations.
NSFAS is currently responding to requests for information from the SIU as part of the current investigation in terms of Proclamation R.88 of 2022, published in the Government Gazette on 26 August 2022.
NSFAS is also making relocation plans to minimise operational disruptions if the lease is terminated.
Years of Criticism Over Costly Offices
NSFAS has faced years of criticism regarding its R2.5 million monthly rent for its Foreshore offices in Cape Town.
In 2024, the scheme's Legal Services Unit initiated a review to either reduce office space or terminate the lease. The review was initially due on 25 October 2024 but faced delays.
Higher Education Minister Nobuhle Nkabana attributed the delay to the lack of secured alternative premises.
The date for moving premises is unknown at this stage as new premises have not yet been procured. The same applies to the addresses of where these premises will be.
The decentralisation process, including opening provincial NSFAS offices, has also been delayed.
On 25 February 2025, the CCMA ruled that the Decentralisation Task Team’s work be paused for consultations with the majority union at the Bargaining Forum.
Controversy Surrounds Cape Town Relocation
The move to the Foreshore has been criticised for its high cost and limited accessibility for students. In early 2023, UDM leader Bantu Holomisa called for a criminal investigation, alleging significant payments for unoccupied space.
Former NSFAS spokesperson Slumezi Skosana defended the relocation as an effort to improve student access, while critics argued the previous Wynberg office was more suitable for students.
Skosana refuted claims of initial vacancy, stating a phased operational rollout and a received discount.
