Administrative and Financial Shortcomings Threaten Effectiveness of Development Programs

·        Activities of the Palestinian Employment Fund for 2021

·        Episode No. (21)

·        The establishment of the Palestinian Employment Fund, came with the aim of supporting economic development by activating and stimulating labor market policies, contributing to the creation and generation of permanent jobs, and the development of social capital, in a manner that strengthens the fight against poverty and unemployment, according to a comprehensive national vision and strategy.

·        Within its oversight role, the State Audit and Administrative Control Bureau (SAACB) conducted a comprehensive audit examination of the Fund's activities for the year 2021, through specialized teams, including auditing the financial statements, reviewing administrative affairs, and evaluating the performance of some general directorates and the various units within the Fund, listing below the most significant observations in the Bureau's report:

·        SAACB's Significant Observations

1.     Delay in issuing the financial statements for 2021 beyond the legally specified period, as they were issued and approved on 22/5/2023, despite the maximum deadline being March 2022!

2.     Existence of financial discrepancies between the closing balances for 2020 and the opening balances for 2021, which indicates inaccuracy of the accounting balances!

3.     Absence of written work manuals and procedures, that organize the mechanisms for carrying out tasks within the Fund's departments, and clarify the operational, accounting, and financial procedures to be followed!

4.     Irregularity of Board of Directors meetings, according to the regulation (one session every two months), as only two sessions were held during 2020.....!, while only three sessions were held during 2021!

5.     Noncompliance of Board members with signing the meeting minutes!.... where the signature was limited to four members, out of twelve who attended the session on 7/10/2021!

6.     There is a defect in disbursing allowances, as allowances were paid to eight members for the Board of Directors meeting of October 2021, despite the approval of participation for only four!!

7.     Absence of a clear accounting policy that determines the depreciation rates of fixed assets.

8.     Not soliciting bids from banks, before linking financial deposits, which contravenes the principle of competition and financial transparency!

9.     Deficiency in preparing the necessary studies that clarify the mechanism for selecting lending institutions, and determining the amount of funds granted to implement the Italian-funded project!

10.Noncompliance by lending institutions with the specified proportions in the sectoral agreements, and granting loans contrary to what the agreements signed with the Fund and the Italian funding party stipulated, which led to nonconformity with the memorandum of understanding and the financial agreement of the program!

11.Lack of supporting documents and evidentiary records, that prove the validity of disbursement procedures and their conformity to the specified standards and conditions!

12.Absence of a strategic risk management plan, which threatens the Fund's interests and affects its continuity in performing its tasks!

·        SAACB's Recommendations:

1-     It is necessary to compel the Employment Fund to issue the financial statements and financial reports within the period specified in the law and the regulation and not to exceed the allowed deadline.

2-     It is necessary that the Fund's Board of Directors adhere to holding its periodic meetings regularly and in an organized manner and according to the law, which ensures the effectiveness of the Board in performing its duties and obligations as referred to by the presidential decree and the Fund's internal regulations.

3-     It is necessary to verify the payment of the Board of Directors' allowance to the members who attended the session only and to ensure their signatures are properly on the minutes!

4-     It is necessary to oblige the Fund's management to work on organizing the solicitation of bids for interest rates on bank deposits (auction) to link deposits to them, with a necessity to state the justifications for keeping the deposits in Arab Bank accounts

5-     It is necessary to activate follow-up and supervision of all projects and adherence to agreements signed with project funders submitted to the Fund, to ensure that all target groups benefit and to achieve the desired objectives of the project, to guarantee benefit to the target groups of the projects.

6-     It is necessary to activate the Fund's work to ensure compliance with the agreements concluded with the funder and lending institutions and effective supervision over the implementation of these agreements.

7-     It is necessary to provide all supporting documents and records that prove the validity of the disbursements and their conformity to the standards, and to attach them with the paper transaction request before submitting them for approval.

8-     It is necessary to work on preparing a strategic plan for the Fund that manages the risks that threaten its interests and continuity.

·        The Fund responded to the Bureau's report on 30-1-2024, regarding the observations contained in the report, where—according to the substance of the response—most of the Bureau's recommendations will be adopted!

·        And I draw attention here to the Bureau's observation concerning the payment of an allowance to some members of the Board of Directors despite their absence from the aforementioned session..! I consider it necessary in such a case that what was taken as an allowance, without right, be recovered..!, ...and according to proper procedures.. for there is no room to turn a blind eye.. to that, as this is public money!