My female is ready for mating. The problem is is that I am currently treating my male for scaly face. Is it true that if they mate whilst he has scaly face the chicks can be affected? There are no signs of it on her at all. I have cleaned and disinfected the cage. When should I put in a nesting box? Will budgies mate even if they have no where to nest?

No this is not true. Scaly Face is caused by a mite infestation not a virus or desease. Depending how bad he is i would wait until the problem is fixed. He is under stress and breeding is not good while a bird is stressed.