Public Report on the illegal hospital panel signs contract – October 1, 1997 -  Emalus Campus

Public Report on the illegal hospital panel signs contract – October 1, 1997


In December, 1994, the Director of Health, Mr. Yves Niowenmal made a verbal agreement with Mr. Ouchida Henri of Laho Limited (Loho) whereby the Loho would provide and install illuminated signs for both the Vila Central Hospital and the Northern (Santo) Hospital.  Initially it was agreed that the signs would cost 600,000 vatu each.  Mr. Niowenmal issued local purchase orders (LPO’s) as payment in advance for each of the signs. Loho did not install the signs.  In November 1995, Laho requested a further 1,000,000 vatu for the installation of the signs.  Mr. Niowenmal complied and issued a further LPO in this amount.  No cheaper alternative signs were ever considered.  Mr. Niowenmal, during 1996 requested that the installation of the signs not proceed.  No signs were ever constructed or installed.

The Ombudsman’s report questions the need for such signs at either hospital, especially in view of the dire need for other, more basic hospital supplies and personnel.  In 1996, the Ombudsman and the Minister of Health became involved with the matter and, pursuant to requests, Laho refunded 90% of the monies received for the signs.  The sum of 220,000 was withheld by Laho.

The signs which Mr. Niowenmal had agreed to were to contain an inscription, “Sponsored by Benson and Hedges”.  In turn, it was understood by Mr. Niowenmal that Benson and Hedges would donate money to the Health Department.  No particulars of this “sponsorship” were ever determined and no monies were ever donated.  The Ombudsman observed that this form of advertising on a hospital sign is highly inappropriate.

In addition to being a waste of money, the procedure for obtaining the signs was in breach of the Government tender process as set out in the Government Financial Regulations.  Mr. Niowenmal failed to follow the correct procurement procedures and the Department of Finance also failed to ensure that the expenditures were charged to the correct sub-head in the Health Department’s budget.

·       That the Attorney General take steps to recover the Sum of 220,000 vatu from Mr. Niowenmal personally.

·       That the Minister of Finance issue a circular to remind all heads of departments and accounting officers to follow Financial Regulations.

·       That Mr. Niowenmal should not be put in charge of the Health Department again and should not occupy any position which involves the spending or allocation of public funds.


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