Alleged Misappropriation of funds by the President of Shefa Province and maladministration of Shefa Provincial Council - July 23, 1996 -  Emalus Campus

Alleged Misappropriation of funds by the President of Shefa Province and maladministration of Shefa Provincial Council - July 23, 1996


In 1994, Shefa Province was created along with 5 other provinces pursuant to the Decentralization and Local Government Regions Act (DLGRA).  This decentralization replaced the 11 Local Governments which had previously existed in Vanuatu.  Charlie Kalmet was elected President of Shefa Province.  He had also been chairman of the previous local Government council.  The day after his election, Shefa Provincial Council considered the allowances for the President and Council Members that were permitted by the DLGRA and concluded that they were too low.  They approved a new scale of allowances which exceeded the permitted allowances by several times.  The new allowances adhered to the MPP Party policy.  The majority of members of the Council were MPP members.

The Minister of Home Affairs, Charlie Nako, in April 1995 wrote to the Provincial Councils instructing them that the maximum allowances were a matter of statute and that allowances should remain within the statutory limit.  This was ignored by Shefa Council.  In May 1995, Shefa Council approved an increased sitting allowance for its members.

During 1995, the President of Shefa was paid 8,004,845 vatu salary and advances, both of which were in excess of the statutory maximum allowed by the FDLGRA. The President continued to be paid advances and salary in excess of the statutory maximum into 1996.  No authority existed for payment of any advances to the President.  The money to pay the excess allowances and advances was drawn from other Shefa budgetary sources.

Outstanding advances to Charlie Kalmet from 1990 or earlier in the amount of 824,950 remained unpaid.  These accrued from a time when Charlie Kalmet was the President of Efate Local Government Council.  A police investigation into this matter was initiated but discontinued for no apparent reason.

A vehicle was purchased for the President in March 1995 at a cost of 4 million vatu.  Its purchase was the result of a unilateral decision by the President.  Minutes of the Council meetings disclose nothing about the purchase of the vehicle.  The vehicle was used exclusively by the President for personal and official use.  A truck purchased by the Council was also used by the President for personal use.  This breached regulations pertaining to the use of Council vehicles.

The money for the purchase of vehicles was borrowed by the Council without approval of the Minister as required by section 28 of the FDLGRA.  These loans were illegal.

The report, as a result of the findings made concludes that the President Charlie Kalmet committed offences of theft, misappropriation and false pretenses contrary to section 123 and 125 of the Penal Code.  It was also concluded that Charlie Kalmet breached the Leadership Code.

The Council members, in allowing the President to act the way he did were also in breach of the Leadership Code.  The Treasurer and Acting Secretary General of Shefa Province breached their duties in engaging in mal-administration, specifically in allowing the withdrawal of funds.  The Minister of Home Affairs unreasonably delayed in issuing instructions to discontinue the illegal allowances and thereby engaged in mal-administration.

            That the police investigate the alleged misappropriation of funds in relation to possible offences pursuant to the Penal Code and inquire into the discontinuance of the investigation in relation to the earlier unpaid advances.

            That the Shefa Provincial Council be dissolved.

            That the PDLGRA be reviewed and amended.


Written by Edward R. Hill
UNDP Governance and Accountability Project
January, 2001
Ombudsman of Vanuatu
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