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The CEO of the Insurance Sector Education and Training Authority (Inseta), Gugu Mkhize, has been placed on precautionary suspension over glitches related to a multimillion-rand tertiary education bursary funding scheme that has seen hundreds of students unpaid for the first five months of the year.
Sunday Times has confirmed that 879 vulnerable beneficiaries, some in their first year of study far from home, were facing threats of eviction from private residences, food insecurity and looming academic exclusion.
Inseta paid a middleman service provider — Mabophe Business Solutions — almost R70m in several disbursements in March. But none of this found its way to the students, their universities, or accommodation providers. This prompted Inseta to make a direct emergency payment of R4.6m during the week of May 21 to prevent the students from getting kicked out, an insider told the Sunday Times.
The insider, who asked not to be named for fear of recriminations, also shared reports compiled for Inseta’s board about the administrative bungle.
Inseta had to step in directly to pay landlords and institutions to fast-track essential student requirements like meal arrangements, data allowances and accommodation fees.
— Excerpt from one of the reports
“From the documents that were put together for the board, it is clear that these kids, some of whom come from poor families, were left stranded in unfamiliar places. And it is hidden from the board that Mabophe was paid millions and just sat on the money, and the CEO did nothing about this cruelty,” the insider said.
An excerpt from one of the reports said: “Inseta had to step in directly to pay landlords and institutions to fast-track essential student requirements like meal arrangements, data allowances and accommodation fees.”
“Teams are conducting physical site visits to five major universities starting May 26 ... to roll out an interim manual payment disbursement approach … While standard Inseta policy does not cover historical debt inherited from previous funders, an official assessment report tracking ISSF beneficiaries is scheduled to conclude on June 15.”
When contacted late last week about the suspension, Mkhize referred Sunday Times to Inseta.
Mabophe director and CEO Ndabe Mdlopane said allegations that his company was not performing were false and malicious, and “geared at tarnishing our image, reputation, and undermining the great work that we have done in rendering services in terms of the Service Level Agreement.
“We are, however, bound by the confidentiality provisions in the Services Level Agreement with Inseta, and as a consequence, we are unable to furnish you with the correct information that you have requested without the potential of breaching the Service Level Agreement,” he said.
The ISSF is a bursary programme designed by Inseta to fund higher education and training for youth entering the insurance sector, through financing tuition, providing data allowances, meals and other training materials to ensure academic continuity.
The framework targets two primary student streams — 461 registered as public learners and 418 supported through co-funders and Higher Education Institutions — across major public institutions, including the University of Cape Town and North West University.
Mkhize’s suspension comes as the Seta is engaged in an independent forensic investigation into alleged governance irregularities related to her re-employment late last year.
Last month Sunday Times reported that Mkhize’s contract extension was allegedly orchestrated behind closed doors, and handled primarily by a single board member with the assistance of a senior executive.
The circumvention of internal controls was subsequently flagged by the auditor-general, who officially categorised the contract extension as irregular due to a clear breach of public sector governance and transparency rules.
Inseta confirmed Mkhize’s suspension, describing it as a “procedural step and not a finding of wrongdoing”. A spokesperson said the delays in payments to students were due to a protracted reconciliation process between itself and the service provider.
“The reconciliation process between Inseta and the service provider for the disbursed funds took longer than anticipated.
“Inseta regrets the impact this had on the affected learners …”
“Inseta acknowledges the serious hardship that payment delays of this nature can cause for learners, and we deeply regret the distress experienced by those affected,” the spokesperson said.
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