Are Our Public Funds Healthy? Reports and Indicators

●       Episode No. ( 6 )

·       Report of the Palestinian Alimony Fund

●       The State Audit and Administrative Control Bureau (SAACB) conducted a financial audit and compliance audit of the work of the Palestinian Alimony Fund for the fiscal year ended 2022/2023, and the report examined: financial affairs, administrative affairs, revenues, the Fund's expenditures, and transfers to beneficiaries.

·       An observer of some details of the SAACB report is struck with surprise at the appearance of many substantive observations and violations in the aforementioned audit report, because despite the existence of the executive regulations of the Palestinian Alimony Fund, the law's provisions, and Cabinet decisions related to organizing the Fund's work and the principles of governance in public work, most of the substantive observations and administrative violations suggest a failure to comply with these laws and instructions as required, and they give the impression that the Alimony Fund does not implement the principles of sound governance for public funds that ensure the management of government funds with efficiency, transparency, and integrity, in accordance with applicable laws and regulations, and in a manner that achieves the optimal use of public resources to serve the public interest.

·       Among the most prominent substantive observations that the SAACB report recorded concerning the Alimony Fund are:

-          Administrative and operational observations

1-     It was observed that there is no internal audit unit in the Fund, and no oversight is exercised over the Fund’s activities!

2-     Sufficient and regular meetings of the Board of Directors were not held, where no meeting was held in 2022, and only one meeting was held in 2023.

3-     The Board did not adhere to submitting reports on its work, its meetings, the funds disbursed, and the assets within the Fund to the Cabinet every 3 months!

4-     There is insufficient data on the numbers of beneficiaries whom the Fund legally covers, as it relies on the cases referred to it by competent and relevant bodies; the number of active files by the end of 2023 reached 1,008 files, distributed across the country's governorates, with a total number of beneficiaries of 15,379 beneficiaries!

·       These administrative and operational violations consequently led to the emergence of substantive financial observations, which may pose risks to the continuity of the Fund’s work and its financial position; the most prominent of these are listed below:

1-     The Fund’s financial position suffers from a marked decline in revenues, where total revenues for 2023 decreased by 1,395,439 shekels, representing a decline of 15% from 2022.

2-     A significant increase in accounts payable – amounts due to beneficiaries – was observed, despite the fact that in previous years the Alimony Fund lent funds to the General Petroleum Corporation as an investment that yields a steady income.

3-     It was observed that the value of accounts receivable for 2023 increased by 43% compared to 2023, due to the weak issuance of enforcement judgments by the specialized courts.!

4-     There are overdue amounts due to beneficiaries from the Alimony Fund in the amount of 2,277,788 shekels as of the end of 2023!

·       It is worth noting that the Palestinian Alimony Fund, is a sovereign, non-ministerial body affiliated with the Palestinian Cabinet, and it enjoys legal personality and has an independent budget; it aims to disburse alimony to entitled persons (such as children, women, the elderly, and people with disabilities) in cases where implementation of court judgments for alimony is not possible due to the absence of the judgment debtor or the absence of assets. The Fund also aims to recover the amounts it paid on behalf of judgment debtors by taking the necessary legal measures against them, such as attachment and legal pursuit.".

·       The Fund is supervised and managed by a Board of Directors composed of: the Chief Judge of the Sharia Courts as chairman, and other members representing various ministries and institutions such as: Justice, Finance, Ministry of Labor, Ministry of Social Affairs, and the Ministry of Awqaf and Religious Affairs ... etc.

·       The Fund’s financial resources consist of marriage and divorce contract fees, the funds the Fund collects from judgment debtors, grants, donations and aid, and amounts allocated to it from the annual budget of the Palestinian National Authority.

·       The SAACB’s recommendations to address and correct some of the substantive observations mentioned above are listed below:

1-     Work on establishing an internal audit unit in the Fund and ensuring it performs its full role in overseeing the Fund's financial and administrative activities.

2-     The Alimony Fund must expand its database by effectively communicating with all partners and conducting field surveys.

3-     Work on taking adequate measures to communicate with the Sharia courts regarding alimony judgments and on establishing electronic linkage with them.

4-     Work on developing a system capable of providing data and information to all partners and stakeholders in the Fund’s performance and operational reality, enabling decision-making, enhancing accountability, and knowledge, and implementing projects that promote sustainable development.

5-     The need to develop an internal system or law that regulates the Fund's work concerning the jurisdiction of senior management and its role (the Board of Directors, the executive council, and the chairman of the Board), the relationship among them as well as the relationship with the executive management, and to define lines of authority, responsibility, and accountability.

6-     The Alimony Fund must work to find an effective investment with a stable return that covers its obligations toward the beneficiaries of the Fund’s services.

7-     The Board of Directors must adhere to holding its sessions according to the Fund’s law and submit reports on its financial activities and their results to the Cabinet.