Between Hinting and Correction: State Audit and Administrative Control Bureau Report 2017

· State Audit and Administrative Control Bureau (SAACB) financial and administrative report 2017 ... Part One

- A manager may ask his employees in some ministry or some department: How are things going? They answer him, "Everything is fine, sir"....!! Are things fine, or are there corners...not fine...! This is what the State Audit and Administrative Control Bureau (SAACB) in Palestine replies in its annual report for 2017 submitted to His Excellency the President on 25-9-2018, with a copy to the Council of Ministers and another to the Legislative Council..!

- To go about this life in all its aspects in a society that surrounds you "على الجهجهون"... meaning leaving the rope loose!! It is unreasonable to work without oversight...and without standards...and without follow-up, especially in matters concerning the public, which portend harm... Therefore there must be oversight of work and follow-up according to a system that begins with correction and then threatens with punishment... And this oversight is the appropriate deterrent against departing from the texts...and the rules set to correct the course and improve performance.. Audit reports are a tool representing society to monitor the execution of daily work in the management of public money ... The SAACB report comes as an examiner...and as an indicator to reassure people about the soundness of the situation or to clarify that some breaches, violations and transgressions were committed...either by hint or by explicit statement...then correction, accountability and follow-up take place.. The basis for the Bureau in the process of oversight and follow-up is not so much the material effect as it is the effect on improvement that the Bureau's reports introduce into the efficient and economical management of public money... It is a tool of safety...and reassurance... in our society...the State Audit and Administrative Control Bureau (SAACB)...!!

- I present below some of the ensuing observations resulting from the audit of departments, bodies, ministries and others who manage public money whether by spending or by collecting revenues... to view some of them and review them yourselves; those who want the full details can consult this report which is 208 pages long on the Bureau's website

- During 2017 the Bureau issued (123) audit reports and received (412) complaints in the same year and followed up (317) complaints, representing 77% of the total complaints received by the Bureau. In its audit the Bureau took care to audit the services provided and to encourage any possibility of improving performance in their administration... The number of requests received from the Anti-Corruption Commission during 2017 amounted to (65) requests, 81.5% of which were followed up through issuing 53 reports and providing the Commission with the results of the follow-up. The number of requests received by the Bureau was 108 requests.

· Observations in the economic sector

· Ministry of Finance

- There is no effective follow-up of the taxpayer files in Income Tax, and the percentage of files that were followed up reached 17% of the total files, which is reflected on the collection yield.

- Weak procedures for following up clearing invoices –P-- - that the Israeli side deducted in amounts differing from the invoice value declared to the Palestinian tax departments by the Palestinian taxpayer, which led to an excessive deduction of 7,054,401 shekels above the declared value for those invoices, and the deduction of the amount from the clearing revenues due to the Public Treasury without verification of them

- There is no follow-up by the West Bank Water Department on the indebtedness of local bodies and individual subscribers, whose balance amounted to 1,127,420,906 shekels according to the records of the West Bank Water Department as of 18-12-2016

- The Israeli side deducted an amount of 173,403,525 shekels from the clearing revenues for 2012 in favor of Israeli hospitals without financial claims for these amounts being available at the Ministry of Health and without any procedures of review and audit of the treatment invoices by any Palestinian party.
- There is no clear basis for calculating clearing deductions for sewage treatment by the Israeli side; it was found that the Israeli party deducted an amount of 55,253,360 shekels from Palestinian tax funds for 2012 for the purposes of treating sewage flowing from the West Bank including the settlements in the West Bank, without any clear basis for how the deducted amounts were calculated.

- There is a shortcoming in the role of the competent authorities in combating tax evasion among owners of liberal professions, where it was found that there are 2,000 lawyers not registered for tax purposes, representing 60% of the practicing lawyers, and 2,644 doctors not registered for tax purposes representing 57% of the number of doctors after excluding doctors of the public sector (sector name truncated).

- There are 101 translators not registered for tax purposes out of 108 practicing translators, and this leads to the small size of amounts collected for the benefit of the Treasury

- Date: 14-1-2019