Report on the Central Financial Administration ("Military") Accounts in Palestine

-        Violations and observations on the accounts of the Central Financial Administration "Military" were unveiled by the report of the State Audit and Administrative Control Bureau (SAACB) in its annual report for 2023...and auditors, or specialists in accounting, control and auditing, are almost stunned at how such a center of responsibility deals with public money..and most of its work is accounting, according to international standards of accounting and auditing, and according to the legislation and laws, and the adopted public policies..when it becomes clear that there is inaccuracy in the performance of some tasks, and in some accounts, and that this repeats at times!..despite the clarity of the ABCs of accounting work, and its basic fundamentals..and this astonishment applies to some dealings of the Ministry of Finance and Planning with the Central Financial Administration (Military), ...as there is negligence of some of these accounts, and examples of that are, the balances of the employee’s share and the government’s share accounts for pension deductions, which were found not to have been transferred..and no reconciliation or matching was made with the Public Pension Authority, the Ministry of Finance, and the Central Administration..Military for many years!

-        Some of the violations and observations on the performance of certain accounts of the Central Financial Administration (Military) are listed below:

·       Account balances:

1-    Most of the account balances were not transferred from the old government computerized program (Bisan) to the new program at the beginning of 2011.....!

2-    Accounts were not reconciled between the Central Financial Administration and the Ministry of Finance, or other entities, such as the Public Pension Authority, which led to outstanding amounts between those entities, especially in salary deductions..!

3-    There are errors in data and information entry into the government computerized program  !

4-    The Ministry of Finance makes entries in some accounts without referring to the Military Financial Administration!

·       Accounts separately – Government share accounts + Employee share accounts

5-    Through comparing the amounts recorded on the government share accounts and the employee share accounts in the Central Financial Administration with the Ministry of Finance, differences were found between the recorded amounts!

6-    The deduction of the employees’ share was not separated between the Social Insurance and Pensions Law for the Security Forces No. 16 of 2004 (rate 15%) and the Public Pension Law, No. (7) of 2005, (rate 7% defined benefits, + 3% defined contributions), so that both deductions were merged into the same account!

7-    No reconciliation was performed, and the deducted balances (government share) were not transferred from the old government computerized program (Bisan) (period May 2009 - 12/2010) to the new program

8-    A new account was opened for the government’s share under number 331915 named (Government Share - Military - ), and a new account for the employee’s share 331914 named (Employee Share - Military), without making reconciliations of the accounts,  or transferring the balances from the old account to the new account!

9-    Inventory reconciliations were not organized for the government share accounts and the employee share account!

·       Account in favor of the Central Financial Administration - Civil Deductions -

10-          The Ministry of Finance made salary deductions on the account in April + May 2019 without specifying the purpose of that, and without notifying and reconciling those amounts with the Central Financial Administration, as it is the competent authority for deduction operations on the military cadre!

·       Account for deduction of a day of work

11-          The Ministry of Finance did not transfer amounts due from the deduction to the beneficiary entities, meaning that the account balance is payables from the Ministry of Finance in favor of the entities to which deductions were made, and the mentioned account was not reconciled!

·       Due salaries account (Prisoners):

12-          It was found that the balance of the above accounts resulted from 5 entries in 2021 made by the Ministry of Finance without knowledge of the reasons for that, or review by the Central Financial Administration!

·       Trust account of the Pension Fund:

13-          Salary deductions account: The balance of the salary deductions account, which represents employees’ contributions to the pension, was not transferred between the old Bisan program and the new Bisan!

·       Jawwal receivables account (employee receivables),

14-          There is a discrepancy between the amounts recorded against employees according to the financial reports of the Central Financial Administration and the amounts paid by the Ministry of Finance to the supplying company!, the Central Financial Administration deducted Jawwal receivables from employees from 2014 until the end of 2022, and the Central Financial Administration did not reduce the receivables of employees from whom Jawwal amounts were deducted from their salaries with entries to close the receivables!, furthermore the debts due to the supplying company were not paid by some employees!

·       Income tax deduction account, Property tax deduction account

15-          The Ministry of Finance transferred amounts from the Central Financial Administration’s deduction account to the income tax account, and there are balances in that account, since the Ministry of Finance makes the transfer to the account at the end of each fiscal year, without specifying the center of responsibility from which the amount was transferred, i.e., the transfer process is handled incorrectly due to transferring amounts in a non-detailed manner!, also a reconciliation of property tax deductions with the property tax account at the Ministry of Finance was not performed!

·       It is necessary to follow up such violations, correct them, and perform reconciliations of shared account balances in order to carry out the public function across all centers of responsibility according to legislation and standards, and to activate internal audit departments and public oversight effectively..