Jenin Central Zakat Committee Under Review: Findings on Governance, Finance and Assets

 

· The State Audit and Administrative Control Bureau (SAACB) conducted a compliance audit of the work of the Jenin Central Zakat Committee for the year 2024, covering the Committee’s revenues and expenditures, and the Al-Iman school and kindergarten. The report begins by noting the charitable and social role of the Committee, particularly support for poor and needy families, care for orphans, and the existence of a sponsorship system that allows aid to reach beneficiaries, alongside an updated database of orphans.

· However, these positive aspects are met by a wide range of substantive observations that merit pause, because they reveal gaps in governance systems, controls, financial management, and documentation of funds and assets!

· Gaps in governance and decision-making

- The report indicates the absence of an approved organizational structure that defines responsibilities, authorities, and administrative hierarchy, and the absence of an internal system and written procedures regulating work, in addition to the absence of a number of specialized committees. There was also no implementation plan or periodic and annual achievement reports, and there was no effective follow-up on the recommendations of the Ministry of Awqaf’s internal audit reports. Most importantly, some administrative and financial decisions were made individually without consulting committee members or holding official meetings, which the Bureau views as limiting collective work and weakening accountability.

· Accounts and the budget need basic tightening

- Among the notable observations is the failure to prepare an annual budget for the Committee and its projects and to link it to clear expenditure line items, and the failure to issue consolidated or detailed financial statements up to 27 May 2025, in addition to not closing the accounts and financial statements at the end of each financial year in accordance with accounting principles. The report also recorded that the financial department did not, in an integrated manner, perform all the tasks of receipt, disbursement, recording, and bank account reconciliation.

- These observations do not concern accounting form only; financial statements are the primary tool that enables management, oversight bodies, and stakeholders to know the reality of resources, uses, assets, and liabilities.

· Cash, funds, and in-kind donations

- The Bureau observed weaknesses in controls related to cash funds, including the absence of clear subsidiary accounting accounts for the funds, the non-use of a device to record amounts in and out, the fund custodian exceeding the permitted cash disbursement limit, incomplete security and protection measures for cash, as well as not depositing fund revenues in the bank daily and not conducting bank reconciliations according to approved templates.

- In the area of in-kind donations, there are no dedicated receipt books and vouchers, donated items are not valued and entered into the accounts according to accounting bases, and there is no documented register for them. This makes counting these donations and following up on their disposition more difficult from an audit perspective.

· Observations on aid disbursements and purchases

- The report records weak precautionary procedures in disbursing cash assistance, non-compliance with disbursement through banks and specialized committees, alongside the use of paper receipt vouchers without sufficient oversight and follow-up registers. It also notes non-compliance in some cases with procurement and tender procedures or requests for quotations, and financial dealings with parties who are related by kinship to the Committee chair without transparent procedures, in addition to disbursing amounts without completing the required signatures or without original tax invoices and source withholding certificates.

- The issue of conflict of interest and transparency stands out here as one of the points that require clear addressing, which the Bureau explicitly affirmed in its recommendations to prohibit conflicts of interest and ensure transparency in financial dealings.

· Beneficiary and orphan files

- Verification procedures for beneficiaries’ conditions were incomplete; social surveys were not attached to some disbursement vouchers, and no field visits were carried out to the households, individuals, and orphans applying for assistance during 2023 to verify their living conditions. There are also no clear and defined criteria for selecting poor households and classifying their degree of need, nor an integrated electronic program for storing the data and documents of households, orphans, sponsors, and guardians.

- More importantly, the report pointed to the lack of essential documents in the majority of orphan files, including the inheritance inventory (hajat hisr al-irath), the will, proof of residence, and proof of regular attendance in education.

· Transactions with Al-Razi Hospital

- One of the most prominent financial points that merits pause is the failure to record financial transactions between the Zakat Committee and Al-Razi Hospital in the Committee’s accounting system amounting to 187 thousand dinars, whether as receivables, expenses, or investments. The report states that these amounts were paid from the Committee’s accounts on the basis that they were recoverable advances, but they were neither recorded nor was any of them recovered up to the report date.

- The report also indicates that Al-Razi Hospital charged the Zakat Committee the value of an MRI device approximating two million shekels, in addition to values of lands and properties and costs of building expansions and costs of treating citizens, without written approval from the Committee or recording the financial movement in its accounts.

- At the same time, the report shows that the Committee does not have administrative or financial powers over the hospital other than having a chair and a member of the Committee on the board of directors, with no clarity on the value of the investment the Committee paid when establishing the hospital or the funds it paid on its behalf.

· Lands, real estate, and assets

- Here appears one of the most sensitive matters in the report. The lands on which the hospital was built are owned by the Zakat Committee, while the Committee does not have an archive containing title deeds for all lands and properties, nor were all lands and properties recorded in the accounting system, and the value of the agricultural land owned by the Committee was not entered.

- A special committee was also not formed to inventory lands with waqf title deeds, and there were no survey reports showing the actual area and on-the-ground mapping for all lands.

- As for fixed assets, there was no dedicated register for them or for custodial assignments to employees, and no official inventory of assets and supplies was conducted for 2023 and 2024, despite disclosure of their value in the financial statements.

· Warehouses and management

- The Bureau also recorded weakness in the warehouse management system, from not using the accounting software in entry and exit operations, absence of item cards and complete inventory records, and not conducting periodic and surprise inventories.

- On the administrative side, the report noted the absence of some committee members for four consecutive sessions, the lack of a specialized unit for personnel affairs or a procurement department, and the absence of an electronic archiving system and a comprehensive electronic database for the Committee’s work and projects.

· What did the Bureau recommend?

- The Bureau’s recommendations were wide-ranging and direct: preparing an organizational structure and internal regulations, forming specialized committees, strengthening collective work and meetings, preparing a budget and consolidated financial statements, tightening controls over funds and cash, recording in-kind donations, organizing procurement and aid, preventing conflicts of interest, completing beneficiary and orphan files, documenting the financial relationship with Al-Razi Hospital, and proving ownership of lands, real estate, and assets and recording them in the accounts, in addition to establishing electronic systems for archiving, warehouses, and databases.

- Notably, the Zakat Committee responded to the report within the legal period, and its response was positive, stating that it will take the recommendations on board.

· Conclusion

- The important charitable role of the Jenin Central Zakat Committee does not negate the necessity of an institutional, financial, and oversight system commensurate with the volume of funds, assets, and responsibilities it manages. The observations recorded by the Bureau do not revolve around a single item, but rather extend across an integrated chain starting from governance and decision-making, through budgeting, accounting, disbursement, donations and assistance, and reaching lands, real estate, investments and assets!

- The real challenge after the report’s issuance is not noting the observations, but implementing the recommendations, correcting the imbalances, and proving that practically. This is precisely what subsequent oversight follow-up should focus on!