Staff Reporter
The National University of Lesotho (NUL)’s registrar, Liteboho Maqalika-Lerotholi, has affirmed that the NUL Innovation Hub has fully accounted for all the funds used for the benefit of the hub.
This statement was made in response to an article published by Newsday last Friday, which reported that the NUL Innovation Hub was under investigation by the Directorate on Corruption and Economic Offences (DCEO) for possible mismanagement of funds.
The DCEO has confirmed that it is indeed investigating the hub.
The investigation reportedly centers on the possible mismanagement of M1.9 million in funding, which the hub received in 2023 from the Lesotho Competitiveness and Financial Inclusion (CAFI) project.
These funds were intended to incubate entrepreneurs or business startups.
Along with several other Enterprise Support Organisations (ESOs) in the country, the hub received US$100,000 (approximately M1.9 million) under CAFI’s initiative to improve the quality and breadth of integrated startup business support services and provide better early-stage financing opportunities.
A significant portion—70 percent—of the allocated funds was designated for the direct benefit of startups.
“It is imperative to state at the onset that NUL Management is not aware of any investigation that is reported to be ongoing and being carried out by the DCEO on the NUL Innovation Hub,” Maqalika-Lerotholi stated.
“However, as a public institution, NUL welcomes any investigation by the law enforcement agencies, and we will do our best to support all such processes. The University awaits confirmation of the reported investigation from the DCEO.”
The registrar further explained that CAFI funds were disbursed into the university account in two parts: 30 percent for management by the NUL as an ESO, and the remaining funds were to be spent on each of the entrepreneurs supported.
She emphasised that NUL adhered strictly to the agreed budgets for all expenses, and no funds were diverted for purposes outside those agreed upon between the NUL Innovation Hub and CAFI, as well as those between CAFI and individual projects.
“No money was spent outside of the agreed deliverables! None whatsoever!” Maqalika-Lerotholi asserted.
She also addressed allegations that those at the helm of the hub were using the incubation process for personal gain, explaining that the NUL Innovation Hub operates under the Senate and Council-approved NUL Intellectual Property Policy (IPP), which is benchmarked globally.
She noted that Newsday is in possession of this policy, which is also accessible to the public.
“This policy outlines the revenue-sharing model similar to that adopted by universities that have IPP worldwide. It is this revenue-sharing part of the policy which the newspaper or its informants, perhaps due to a misunderstanding of how university IP works, prefer to call a ‘personal gain’ process,” she said.
Maqalika-Lerotholi further clarified the process of selecting incubatees, stating that a call is made for prospective incubatees to apply for each incubation cycle, followed by a transparent selection process.
The same process was applied to the incubatees under CAFI.
“This allegation is therefore null and void,” she said.
She also highlighted that the NUL Innovation Hub was one of the first five ESOs selected by CAFI’s criteria out of the ten institutions that competed for the funding.
A rigorous budgeting process was followed by the NUL Innovation Hub and CAFI, with the budget framework being adopted for the 30 percent allocated to support the general operations of the ESO.
This included funding for human resources and administrative costs.
At CAFI’s advice, NUL Innovation Hub engaged ‘coaches’ to support each of the individual enterprises, with due diligence ensuring some coaches were NUL staff while others were from outside.
“A lot of local institutions, including the government and some international organisations, look to NUL whenever consultancy work is available. It would therefore make no sense for NUL expertise to be overlooked in favour of outsiders when NUL requires services that such staff can render,” she explained.
She added that the Innovation Hub was created specifically to allow incubatees to receive support from NUL staff in refining products and processes during the initial stages of incubation.
The funding from CAFI was intended to provide the financial injection necessary to boost that support, with all processes of engagement being sanctioned by CAFI in weekly and monthly meetings held between CAFI and NUL Innovation Hub.
“We further want to remind the public that the CAFI project came to an end on 7th May 2024 but was extended by a month to accommodate procurement processes delayed by the late disbursement of funds, which were only disbursed in April 2024, while incubation began on November 1st, 2023.”
Currently, according to the registrar, the accounting of the funds allocated to individual companies is still ongoing. Some companies procured items from supermarkets and hardware stores, others ordered specialised products from local artisans such as carpenters and welders, and some ordered specialised equipment from outside Lesotho.
She said given the volume of work carried out in a short time, the process of reconciliation between individual projects and CAFI through the NUL Innovation Hub is still not complete, but it is being carried out under the supervision of CAFI staff who regularly update NUL Innovation Hub on the status of the reporting.
“According to CAFI’s updated statement, ‘The ESO has reported 96.51 percent spending by the enterprises; so far, 80 percent has been accepted following the verification of the supporting documents submitted to GAF.’ Four enterprises have fully accounted for their funds.”
She noted that the remaining enterprises were working to provide all relevant documents to complete the accounting for the used funds. A few enterprises received funds deposited into their accounts as per CAFI’s advice to cover perishables and transport costs, and these enterprises have been given until the end of August to fully utilise the funds.
“NUL management will continue to engage with CAFI until the process is finalised. We further reiterate our commitment to preserving the good name of NUL, particularly in managing funds, especially donor funds, as we host numerous internationally funded projects,” Maqalika-Lerotholi concluded.
“NUL treats any allegations of mismanagement and misappropriation of donor funds very seriously to protect our image as a premium institution in the country.”
On Tuesday this week, Maqalika-Lerotholi wrote to Newsday requesting the newspaper to share the details of the case that was reported to be under investigation by the DCEO, including the substance of the case and the issues being investigated.
The letter asked for this information to reach the University by 12 noon on Thursday, August 22, 2024.
However, the letter only arrived at Newsday on Thursday morning. Despite being on a tight deadline for a Friday publication, the editorial team prioritised responding to the letter.
“We understand the University’s concern regarding the reported investigation,” Newsday stated in its response.
“However, as a responsible news organisation, we must adhere to journalistic ethics and legal principles, including the protection of our sources and the confidentiality of information obtained during the course of our reporting. Consequently, we are unable to disclose the details of our sources or the substance of the ongoing investigation by the DCEO.”
The publication assured Maqalika-Lerotholi that the article was based on information from credible sources and that they had verified the details to the best of their ability before publication.
It reiterated that the DCEO had confirmed the existence of the investigation into the NUL Innovation Hub, although specific details remain confidential as the investigation is ongoing.
“We advise that the University may wish to directly contact the DCEO for any further clarification or information concerning the investigation,” Newsday added.
“We remain committed to providing accurate and fair reporting, and should there be any developments or official statements from the DCEO or NUL, we will continue to report on them with the same level of professionalism.”
