Financial Irregularities in the Economic Sector

·       Data of Sand Company for Construction Industries (Cement) as of 31-12-2015

-        The State Audit and Administrative Control Bureau (SAACB) conducted a financial audit in its 2018 annual report of Sand Company for Construction Industries Private Shareholding Limited for the fiscal year ended 31-12-2015, and the Bureau reached the following observations: the company did not make disclosure in its 2015 financial statements of its shareholdings in some companies it owns or of any matters that materially affect the company’s financial statements, which affects the fairness of the company’s financial position.

-        Weakness of the company’s internal control system, manifested in the issuance of many board of directors’ resolutions by circulation and the failure to assign serial numbers to some resolutions and to obtain the full signatures of all members on them, and there is no follow-up on the implementation of some resolutions adopted by the board of directors.

-        Weakness in internal control procedures in the company’s warehouses and stores, and incomplete policies governing the work of the sales, collections and warehouse departments.

·       There are no client files specific to the company’s customers.

·        Signatures on the company’s financial vouchers (receipt, disbursement and entry) are incomplete with respect to the maker of the voucher and its approver..!!

·       The company did not analyze the components of cement prices; the company (the main supplier of cement) changes cement prices without analyzing the price components and without verifying the validity of these justifications and the extent of the impact of cost elements on prices, and the company does not maintain an adequate strategic stock of cement.

·       As for the relationship of the cement company with other companies, it has relied in its work with Nesher Company since 1994 on draft agreements!!, which do not make these drafts a legal reference in the event of a dispute between the parties. They also do not contain any terms obliging the supplier to provide cement on a continuous basis to ensure that cement does not disappear from the Palestinian market.

·        The Bureau refrained from expressing an opinion regarding the company’s confirmations concerning purchases from Nesher Company as a result of the company (Sand) recording the quantities received in shipments according to the weight shown on the dispatch note issued by Nesher Company at unloading, which does not provide confirmation of the correctness and accuracy of the unloaded quantities..!!
 Sand Company responded to the Bureau’s observations by presenting justifications regarding the observations and violations contained in the report, asserting its compliance with implementing the recommendations therein....!!!

·        It is clear from my point of view that the responses from most responsibility centers and institutions in the Palestinian economic sector do not rise to a serious level of demonstrating responsibility, and that the repeated phrase that all of the Bureau’s observations will be complied with and the violations corrected is a conventional repeated response that implies between its lines indifference and lack of concern. The evidence is the repetition of violations and observations in later years... and the draft agreements between Sand Company and the Israeli company Nesher remain unchanged and unmodified in nature to become legally referable agreements!

·        Auditing by the State Audit and Administrative Control Bureau (SAACB) for some responsibility centers and public sector institutions in Palestine is much delayed, which reduces the enthusiasm for effecting change and safeguarding public funds....!!