Financial Violations in the Palestinian Economic Sector in 2015

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 of Sand Company for Construction Industries, a private shareholding limited company, for the financial year ended 31-12-2015, and the SAACB concluded the following observations:
 The company did not carry out disclosure in its financial statements for 2015 of its participation 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..
There is weakness in the company’s internal control system
manifesting in the issuance of many board of directors decisions by circulation and the failure to assign a serial number to some decisions and the failure to obtain the full signatures of all members on them, and there is no follow-up on the implementation of some decisions made by the board of directors..

 Weakness in internal control procedures in the company’s warehouses and stores, and incompleteness of the policies regulating work in the sales, collections and warehouses departments.

 The absence of dedicated files for the company’s customers

The company’s financial vouchers (receipt, disbursement and posting) do not have complete signatures with respect to the voucher preparer and approver..!!
 The company did not analyze the components of cement prices, as the company (the main cement supplier) changes cement prices without analyzing the price components..and verifying the validity of these justifications and the extent of the impact of cost elements on prices, and the company does not retain a sufficient strategic stock of cement

 As for the cement company’s relationship with other companies, it has relied in its dealings with شركة نيشر since 1994 on draft agreements!!, which does not make these drafts a legal reference in the event of a dispute between the parties..and they also do not contain any terms obligating the supplier to provide cement continuously in order to ensure that cement does not disappear from the Palestinian market..

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

 It is clear from my point of view that the responses by most responsibility centers...and institutions of the economic sector in Palestine...do not rise to a serious level of demonstrating responsibility, and the repeated response that all the SAACB’s observations will be complied with and the violations corrected..is a routine repeated reply that implies between its lines that it is indifferent, and without concern..and the proof is the repetition of the violations and observations in later years...and the draft agreements between Sand Company and the Israeli company Nesher still remain unchanged and unamended to become agreements with legal reference status...!!
 Auditing by the State Audit and Administrative Control Bureau (SAACB) of some responsibility centers and public sector institutions in Palestine is very delayed..which lowers the enthusiasm threshold for creating change and protecting public funds....!!