Ministry of Social Development and the Emirati Fund for the Rehabilitation of Persons with Disabilities

- The State Audit and Administrative Control Bureau (SAACB) conducted an audit and compliance review of the Emirati Fund for the Rehabilitation of Persons with Disabilities in the Ministry of Social Development (this fund grants loans to persons with disabilities to establish income-generating projects) for the year 2018, up to 31-3-2019. The following are some of the most important observations.

- There are no clear and approved plans and policies for managing and supervising the fund.

- The SAACB was not provided with the board of directors formation decisions for the fund, nor with the technical committee, in accordance with Instruction No. 2 of 2018 concerning the fund, and a Capacity Assessment Committee was not formed.!

- A low collection rate from borrowers, where the collected amounts totaled 622,021 dollars, which is only 25% of the total loans granted amounting to 2,520,478 dollars, and this is since 2008 until the end of 2018. The fund balance as of 31-1-2019 amounted to 917,997 dollars, which will affect the fund’s ability to continue operating in the future and its ability to grant new loans, especially since there have been no sources of funding for the fund since 2014.

- There are no periodic reports on the fund that clarify the status of the projects being financed in terms of their continuity, and there are no studies explaining the reasons for project discontinuity and their failure. Noting that the last statistics provided to the SAACB were issued in 2016, when the percentage of projects that had been financed and remained ongoing up to that time was only 41%, which led to the decline in the collection rate and will affect the fund’s future ability to grant new loans.

- Weak follow-up and oversight over the fund’s activities, where the internal audit unit does not audit the fund’s activities, and an external auditor was not appointed to audit the fund, in accordance with what is stated in Instruction No. 2 of 2018 concerning the fund, which may lead to errors and deviations not being detected and corrected in a timely manner.

- Legal measures are not taken against borrowers who default on repayment, where it was found that (seven) borrowers from the sample selected by the SAACB had not made any payments since receiving the loans.

- Measures ensuring collection are not taken, as bank inquiries are not made about the borrower and their guarantors to verify the borrowers’ ability to repay.

- The fund’s data are not recorded and documented on the ministry’s computerized electronic system, nor is there an electronic link between the ministry and its directorates regarding the fund’s data, which led to weak follow-up of the fund’s activities and its supervision.

- The fund’s paper files (beneficiary files, collection guarantees and promissory notes) are not archived electronically to protect them from damage and loss.

- The fund’s paper files are kept in a place unsuitable and inappropriate for their preservation and archiving, especially the collection and promissory note files, since the place where they are kept "water and sewage infiltrate into it"....! which exposes them to damage.

· The ministry’s response was merely justifications for the observations contained in the report only."

- When we continue to study the violations committed by some centers of responsibility in public work in Palestine, as reported by the State Audit and Administrative Control Bureau (SAACB) in its 2019 annual report, contained in 228 pages, we feel that we are facing a vast arena, part of whose structure has been eroded; if it is not dealt with fundamentally, it will expose the structures representing public work in our example to collapse and falling, and therefore, weaken confidence in public work.... Here, in our example, we see many violations, some of which are serious, while others rise to the level of corruption cases, as stated in the mentioned SAACB report pages. There are some aspects of public work that suffer from distortion and deviation from the regulations, standards, laws and legislations governing public work.!

· Let us hope that the concerned entities will follow up on their compliance with the SAACB’s observations and recommendations, to correct the errors and violations and take appropriate measures to prevent recurrence, noting that the Legislative Council is fundamentally the body that follows up on the SAACB’s observations and recommendations and ensures their proper remediation, as a legislative authority, since responsibility for following up on such observations and violations should not be entrusted to centers of responsibility within the executive authority under which the violating entities fall in the first place..!

· From our review, for example, of the SAACB’s observations in its (Audit and Compliance) report concerning the Emirati Fund for the Rehabilitation of Persons with Disabilities as listed above, it is clear to us the extent of laxity by some centers of responsibility and their failure to comply with the legal legislations, regulations and instructions governing their work and activities. I was very surprised by the observation that an external auditor was not appointed for the fund’s accounts, in accordance with the 2018 instructions, and the ministry’s (Ministry of Social Development) response regarding the Emirati Fund was merely justifications for the observations contained in the report only.. This response seemed strange and does not align with the rules and responsibilities of public work..!

· On 5-11-2020