Public Report on the ethics and legality of the trade-in of the Ministry of Finance Car–G188 MOF - February 10, 1999 - Emalus Campus
In late 1996, the Ministry of Finance decided to trade in a 4 year old Government vehicle and replace it with a new vehicle. The new vehicle was valued at 2,157,800 vatu by Company X, the vendor. Company X accepted the old vehicle as a trade-in which was valued at 400,000 by the company for this purpose. The Ministry of Finance took no steps to have the old vehicle independently valued prior to the deal nor did it follow its own tendering procedures in respect of the new vehicle. The failure to establish an independent value for the trade in vehicle and to follow tendering procedures for the purchase of the new vehicle both breached the Finance Regulations which apply to the disposal and purchase of Government property.
The purchase and sale were negotiated on behalf of the Ministry of Finance by Mr. Abel, the First Secretary who was also a member of the board of the National Bank of Vanuatu (NBV). Another member of the NBV board, Mr. Bule acted on behalf of Company X. The transaction took place with the knowledge and approval of the Director General of Finance, Mr. Wilfred and the Minister of Finance, Mr. Shem Nokaot.
On March 7, 1997 Company X sold the traded in vehicle to Mr. Abel for 400,000 vatu plus the cost of repairs which it had performed.. This purchase was financed by the NBV. Shortly thereafter Mr. Abel was appointed General Manager of the NBV.
Knowledge of the failure to follow proper procedures was acknowledged by Mr. Bule and Mr. Abel in the course of the investigation.
The Ombudsman concluded that the conduct of the Minister of Finance, the Director of Finance, and the former First Secretary of the Finance Ministry breached the provisions of the Finance Regulations. Further it was found that Mr. Abel allowed his integrity to be called into question and breached the Leadership Code in his dealings with respect to the sale of the Government vehicle and its subsequent repurchase by himself for the same price. He placed himself in a position where his public duty was compromised by his personal interest.
· That the Directors General of each ministry be aware of and follow the relevant procedures for purchasing and disposing of Government property.
· That the Director of Finance give written (not oral) instructions with respect to the disposal of Government property.
· That the Government Training Unit conduct a course in financial procedures for heads of departments and accounting officers.
· That payment orders for the purchase of vehicles not be approved unless they have been purchased in accordance with proper procedures.
Written by Edward R. Hill
UNDP Governance and Accountability Project
© Ombudsman of Vanuatu
Published here by University of the South Pacific, School of Law Web Site - www.vanuatu.usp.ac.fj