Palestinian Red Crescent Society — Head Office, Al-Bireh

·                                     Black holes in some of the Association’s lines of work in 2022 that dent its prestige!

-         Episode No. 24

·        The Palestinian Red Crescent Society – Head Office in Al-Bireh, is a large health and social institution, one of the institutions of the Palestine Liberation Organization (PLO), established in 1968, operating in Palestine, and comprising thousands of cadres, and tens of thousands of members, and volunteers who are Palestinian, Arab, and foreign.

·        The State Audit and Administrative Control Bureau (SAACB) report reviewed the results of the financial and administrative audit of the Palestinian Red Crescent Society for the fiscal year ended 2022, and the Bureau issued a qualified opinion on the financial statements, as the 2022 report revealed a number of administrative and financial gaps in the Palestinian Red Crescent Society – Head Office in Al-Bireh, which led to the Bureau issuing a qualified opinion on its financial statements for the mentioned year!

·        The most prominent observations consisted of the absence of clear financial systems to determine salaries, price services, and limits for granting discounts, and the failure to prepare final budgets on time. The report also noted a weakness in inventory procedures and internal control, and deficiencies in managing medical inventory, in coordination between the center and the branches, and the existence of undocumented expenditures, discrepancies in fuel records, and bank account balances! All these black holes appeared in some of the Association’s lines of work, among the most prominent of which are: implementation of governance: where manifestations of weaknesses in implementing governance appeared through the Bureau’s report, the most important of which are as follows:

1-     Failure to issue serious decisions that would work to address shortcomings in the Association’s activity performance, and to ensure it does not incur ongoing annual losses, especially the Ambulance and Emergency Department!

2-     There is no procedures manual issued by the higher administrative authorities that specifies the mechanisms for marketing and reservations, and regulates all internal transactions related to the guesthouse and its various departments, such as the theater halls, kitchen, restaurant, and housekeeping and hotel services!

3-     Weak oversight procedures over Ambulance and Emergency expenses, where it was noted that some expenses were not supported by tax invoices, and there were discrepancies in fuel expenses between different ambulances!

4-     The Association and its centers rely heavily on external support to cover their expenses and continue their operations, which poses a real danger to the ability of the Association and its various centers to run their affairs and continue providing their services in the event of a cutoff of external support

5-     As for bank reconciliations, monthly bank reconciliations are prepared for all the Association’s closing accounts, but they are not reviewed, and verification of matching balances and attachment of supporting documents is not ensured!

·        As for the outstanding receivables from insurance companies, the Association did not take the necessary measures to collect the receivables of insurance partners, which caused outstanding uncollected receivables, reflecting on the timely availability of cash and increasing the risks of non-collection, especially with the liquidation and closure of some insurance companies!

·        As for fixed assets and property: the Bureau’s report showed that there is no system for inventory and warehouse management, and no segregation of duties in managing the inventory adjustment account, which leads to difficulty in following up inventory and identifying any problems or defects in inventory items!

·        As for internal ambulance revenues, it was clear from the Bureau’s report that internal ambulance revenues were low, where the coverage ratio of ambulance revenues to ambulance expenses reached only 11% of total ambulance expenses, while the remaining ambulance expenses are covered by 70% of the total ambulance expenses from projects!

·        The report in its recommendations called for updating the financial and accounting systems, and strengthening internal control in the Association’s branches, and unifying financial follow-up mechanisms, to ensure transparency and the accuracy of reports.

·        The Association itself provided a positive response to the Bureau’s report and its recommendations, and expressed its readiness to address the observations and correct the deficiencies!