Arab Construction Project Charitable Association — Jericho

-        The State Audit and Administrative Control Bureau (SAACB) in Palestine conducted a comprehensive audit of the Association's work for the fiscal year ended 31-12-2019... The report concluded with the most important observations which we will present below

-        It is, in my opinion, surprising that this Association, with such an origin deeply rooted in history, and with such productive objectives, would become, in this condition..... characterized by irresponsibility... laxity, the dominance of private individual interest by some officials, and the insistence on not accepting new subscriptions from citizens to join the Association, whereas the number of members of the General Assembly was supposed... across successive decades from 1945 until the date of writing the report, ....to far exceed what exists now

-        The accumulated losses in the Association, in all production facilities across its numerous factories... and its leased lands, fish ponds.. and others.. indicate that there is a serious defect in management. And in the management of the Association's funds... knowing that such an association is supposed to be an exemplary school for all associations that were established after it ....by long periods.

-        I am saddened by such a report, and we hope that the principle of auditing, and accountability, and the application of the principles of transparency and disclosure .. and the correction of all deviations will be activated... - as they promised in their response to the SAACB report - and the punishment of those responsible .. for all this erroneous administrative course of the Association - according to the report -, noting that the SAACB delivered its report to: the Council of Ministers, the Anti-Corruption Commission, the Audit Profession Council, in addition to the members of the Association's Board of Directors.

·       (About the Association):

-         The Arab Construction Project Charitable Association was established in the city of Jerusalem in 1945, and the Association conducts its activities and work in Jericho and the Jordan Valley governorate. The Association has a dairy cow farm producing milk, a dairy products factory, and fish breeding ponds. The value of the Association's assets for 2019 amounted to 543,597,982 shekels.. and total revenues amounted to 10,488,317 shekels, while total expenses amounted to 13,313,786 shekels.

·       (Main observations of the Audit Bureau):

-        The Association has not opened membership admission since 2010, which resulted in a small number of General Assembly members, only (23) members, which prevented freedom of association for the Association, considering it a civil institution!

-        The (General Assembly) does not have the capacity to exercise the authority to dismiss members of the Board of Directors, and withdraw confidence from them, due to the low number of General Assembly members, despite the continued losses of the Association's activities!

-        The chairman and vice chairman, the treasurer, and others of the Board of Directors have retained their positions for several electoral terms!

-        Issuing decisions with significant financial impact by the (Administrative Body) without conducting a study led to a decline in performance across the Association's various activities and an increase in its losses!

-        The absence of an effective supervisory and oversight role (of the Board of Directors) over financial and administrative decisions, as a result of the concentration of authority (executive management), in making some decisions with financial and organizational impact without informing the Administrative Body about them!

-        The (Administrative Body) did not take serious decisions that would work to address the performance shortcomings and ensure that the Association does not incur ongoing annual losses!

-        There are no prepared and approved financial and administrative systems and procedural manuals to organize work.

-        There is no inventory and warehouse management system, nor is there a separation of duties in managing the account for inventory adjustments.

-        Weak control over the accounting software, as all input, cancellation, modification and approval authorities are in the hands of the financial accountants.

-        The accounting software was not closed at the end of the fiscal year, where it was shown that it is possible to modify the dates and amounts of vouchers and to add and modify some financial transactions pertaining to previous fiscal years contrary to control procedures and work discipline.

-        There are many differences between the balances in the 2019 financial statements and the accounting records amounting to 2,809,957 shekels.

-        There is insufficient assurance on the correctness of the disclosure and recognition of (waqf) revenues for the years from 2011 – to 2015, and there are not sufficient documentary supports to express an opinion about them

-        Adjusting the book balances of the warehouse so that they match the actual balance without administrative confirmations supporting the adjustment

-        There are outstanding returned checks from previous years (more than 15 years) that were not collected, which amounted to 98,930 shekels, 10,000 dollars, and 8,584 dinars

-        The valuation mechanism (assessment of biological assets) is unfair and incorrect, as a large discrepancy was found between the market price and the book value.

-        There is insufficient assurance on the completeness and accuracy of the area of lands owned by the Association, and there is no reasonable assurance about the completeness of disclosure of leased lands and their rents

·       (Dairy Factory):

-        The dairy factory incurred cumulative losses during the years from 2010 until 2019, due to the high cost of production and the lack of adoption of policies capable of improving marketing levels...!

-        Decisions were issued relating to discounts and reductions on sales, at a high rate, exceeding 60% of the value of the sales invoice, verbally, and without any administrative approvals in principle...!

-        Allowing suppliers a permitted discount of 15% on sales, without a decision from the Administrative Body approving it... and without limiting that to the payment of the receivables due from the customer..!.

-        Destruction of quantities of production due to delivery of quantities of milk exceeding the capacity, without conducting a feasibility study or analyzing the quantity of milk that the factory can absorb!!

-        The Administrative Body ignored the technical reports periodically issued by the factory management which clarify the problems and reasons that led to its performance decline and incurrence of losses

·       (Dairy Farm):

·       The dairy farm achieved continuing accumulated losses during the years 2010-2019 amounting to 2,724,240 shekels, as a result of the high production cost (feed), and the failure to adopt policies capable of improving production levels on the farm!

·       139 cows and calves died during the years 2010-2019, with a market value of 1,464,525 shekels, and the cause of their death was (the use of saline water to water the cows and calves), according to the prepared technical reports..!

·       The Association sold 70 heifers (bekaakir) in 2011, without justification for their sale, especially while the Association needed them...!

·       (Land Rentals) :

·       There is no follow-up by the Association's management on production quantities of dates and saplings on lands leased to farmers, where the production statements submitted by lessees are not verified, which does not confirm the completeness of the Association's share of date production revenue..

·       The calculation of receivables owed by lessees, recorded in the Association's records, is incorrect ... and inaccurate..., which leads to the loss of sums of money due on them.....!

·       Reduction.. and adjustment.. of the balance of one of the lessees, in the amount of 324,304 shekels, without supporting documents and administrative confirmations to justify that..!

·       There is no follow-up... on the extent of lessees' commitment to contract terms and their obligations, from full exploitation of the land by planting date trees (unknown), and maintaining the planted trees...!

·       The date 7-9-2022