Public Report on the illegal compensation payments to staff of Prime Ministerís Office and Finance Department - April 16, 1999 - Emalus Campus

Public Report on the illegal compensation payments to staff of Prime Ministerís Office and Finance Department - April 16, 1999


A group of public servants employed in the Office of the Prime Minister and the Minister of Finance were each rewarded with payments of 50,000 vatu  for their work in preparing payments to claimants in relation to the Compensation Act of 1994.

These payments of 50,000 each were made by General Payment Voucher (GPV) on December 28, 1995.  The Ombudsman investigated the legality and propriety of these payments.

The issue of payment of bonuses was raised at a Council of Ministers Meeting in response to a paper presented by the Minister of Finance, Willie Jimmy.  The Council approved payment on the following conditional terms:

To authorise, on decision of the Prime Minister subject to the Act No. 11 of 1994, the Minister of Finance to pay a substantial amount to all the persons working in the preparation of the payment of these compensations, if there are some funds left (Commission members and administration support staff).

A number of factors made the payments improper.  The authority of the Council of Ministers to make the payments was subject to the decision of the Prime Minister.  No decision to make the payments was made by the Prime Minister.  The funds in question were insufficient to pay those making proper claims pursuant to the Compensation Act.  Some 40% of claimants were not paid because the funds were exhausted.  Therefore, the condition that ďthere are some funds leftĒ for payment of bonuses to the 15 public servants was not satisfied.  Further, the wording of sections 2 and 3 of the Compensation Act restricted payments from the Compensation Fund to use exclusively for payments to specific persons with specific claims.  This did not include payments to public servants by way of bonus or overtime.

The payments were made in recognition of the overtime hours that the public servants in question served in administering the Compensation Act.  However, the Public Service Manual, which governs overtime payments requires Ministerial approval for payment of overtime to some classes of public servants.  Some bonus payments did not have the required Ministerial approval.   One of the recipients, the Director of Finance, Jeffrey Wilfred, was not entitled to overtime in any event.

The acceptance of a payment by the Director General of Finance was found to have placed him in conflict of interest in that his duties obliged him to be satisfied of the lawfulness of the payments.  At the least, Heads of Departments are not entitled to overtime.  The issue of whether the Director General of Finance had his name added to the list of recipients on his own initiative was raised by not resolved by the investigation.

It was found that the Minister of Finance, Willie Jimmy was in breach of the Leadership Code.  The payments were made under his auspices but were not in accordance with the law.  They were also contrary to the advice of an internal audit report of the Finance Department.  The Ministerís actions in relation to the payment diminished respect for and integrity of the Government.

Subsequent to the payments being made and prior to the release of the Ombudsmanís report, recipients of the payments in question were asked to repay the money received.   Some of the recipients did repay or make arrangements to repay the monies.  Others did not.  

∑       That the Minister of Finance take steps to recover the payments from all recipients.

∑       That the Minister of Finance thank those who have voluntarily repaid the money received.

∑       That the Director General of Finance ensure that the Public Service Rules regarding overtime are complied with.

∑       That consideration be given to the payment of appropriate amounts for overtime served to those who may be entitled to it.

∑       That the law be amended to require that advice given in an internal (audit) report of the Finance Department be acted upon.


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