Inventory of the Public Petroleum Authority's Warehouses in Palestine

- The State Audit and Administrative Control Bureau (SAACB) report for 2021 recorded observations about large discrepancies between fuel balances in the ledger records and the Bisan accounting system at the Ministry of Finance, and the actual balances according to the physical inventory at the end of 2020. It stated that there was no actual existence of balances for fuels that appeared in the records, which rely on purchase and sales invoices, according to invoices from the Israeli fuel supplying company to the Public Petroleum Authority. It was also observed that there was negligence and delay in posting some of the purchase and sales invoices at the Authority. Clear negligence, and incorrect disclosure of the actual fuel balances as shown by the physical inventory, for example at the end of 2020, and the Bureau's notes indicated that the meters in the five tanks were all malfunctioning..! This points to a failure to manage public funds with the responsibility and transparency required by the laws and provisions governing public work and public fund management, and that there is laxity and negligence that raise concern about the results of the management of some vital institutions such as the Public Petroleum Authority..on the state treasury and the credibility of public work...!

- Based on the decision of His Excellency the Minister of Finance, Chairman of the Board of Directors of the Public Petroleum Authority, regarding the formation of a special committee to inventory the Public Petroleum Authority's warehouses for the year 2020, and through the participation of the State Audit and Administrative Control Bureau (SAACB) in the committee's work on 31-12-2020 as an observing member, the Bureau recorded the following observations:

· Existence of quantity discrepancies

- By reconciling movement balances between the actual balance in the warehouses and discharge points recorded on the Bisan program on the same date, discrepancies were found in the fuel stock balances of various types, and the following table shows the difference between the ledger balance in Bisan and the actual warehouse balance from the inventory process:

· Gasoline 95: the inventory balance at the end of 2020 amounted to 399 liters...while the ledger balance on the Bisan accounting system at the end of 2020 amounted to (171,738,207 liters) deficit...!, whereas regarding diesel: the inventory balance at the end of 2020 amounted to 5,250 liters...while the ledger balance on the Bisan accounting system at the end of 2020 . (615,961,444 ) liters...deficit..!, and in short kerosene: the inventory balance at the end of 2020 amounted to 2,510 liters...while the ledger balance on the Bisan accounting system, at the end of 2020 . (570,306 ) liters...deficit..!, as for gas.. the inventory balance at the end of 2020 amounted to less than one liter (0.34 of a liter)...while the ledger balance on the Bisan accounting system, at the end of 2020, amounted to (277,354 ) liters deficit...!

- By comparing the actual balance of the fuel and gas warehouses in Naalin and the discharge points represented in (Tarqumiya, Gaza, Barta'a), the following was revealed:

- The discharge points had no stored quantities, meaning the year-end balance...zero...for all types...of fuels and gas...as of 31-12-2020.

- There were material differences for some types between the recorded balances and the results of the physical inventory of the fuel and gas warehouses of the Authority in Naalin and the discharge points as of 31-12-2020.

- The differences in fuel balances, according to the inventory balance at the end of 2019 and the input and output vouchers in the details of purchases and sales in 2020, on the one hand, and the actual inventory balance at the end of 2020, showed shortages; for example: Gasoline 95: the balance at the end of the inventory in 2020 amounted to 399 liters, with a difference of (464,125 liters) ..shortage..!

- During the inventory of the gas warehouse in Naalin, consisting of 5 tanks as of 31-31-12-2020, the meters in them were malfunctioning since the meter readings indicated quantities of gas exceeding 90 tons for some tanks, while the actual inventory result for all tanks amounted to less than a liter (0.34 of a liter)..! Therefore the meter readings were not accurate; for example: Tank No. 1..meter reading 9 tons, Tank No. 2..meter reading 91 tons, etc.....!

- There were ledger balances for fuels and gas at discharge points despite the absence of actual warehouses on the ground...!

- A table appeared showing a balance for the Gaza point on the Bisan program, despite the Authority having no warehouses in Gaza...these balances date back to previous years...which indicates the inaccuracy of the stock balances...!

- The following table shows the existence of a gas balance at the end of 2020 in the Tarqumiya warehouse...despite the fact that the gas in the warehouse is owned by the leasing company (Al-Salam Investment Group Company) item 906..Gas..the balance on Bisan on 31-12-2020 amounted to 311 tons..while the balance on Bisan on 31-12-2019 amounted to a quantity of 35 tons..!

- Records and balances: differences were found between quantities of purchases of some fuel types recorded on the Bisan program and the quantities disclosed in the letter received from Pazia Company of the quantities supplied to the Petroleum Authority ..

- Delays were observed in posting a purchase invoice and sales invoices to the accounting program.

- We noted the existence of a creditor balance for Pazan Company..(a company that was formerly a fuel supplier to the Authority)...on the accounting system in the amount of 1,754,422 shekels...up to the date of the report...despite the company having stopped supplying fuels to the Authority at the end of 2020..noting that the Authority paid the amounts due to the company in February for 2021, and the balance was not processed on Bisan...!

· What do you say?

- Date: 19-8-2022