Reservations on the Ministry of Finance and Planning’s Disclosures for 2018–2019 in Palestine

-        Disclosures Ministry of Finance and Planning in Ramallah for the consolidated financial statements of the State of Palestine... for the years 2018/2019

-        The Ministry of Finance did not disclose the trusts payable "(صالح الهيئات المحلية)" within the monthly public debt report, including property tax trusts, road transport trusts, and business license trusts..!

-        The Ministry of Finance did not disclose the "agreements with material effect" such as the agreement signed with the Israeli side regarding the public treasury’s assumption of amounts owed to Jerusalem Electricity Company, and other local bodies, and some other electricity companies, and individuals, resulting from accumulated indebtedness from electricity consumption on the Palestinian side and their nonpayment to the Israeli national electricity company... amounting to 1,344,100,594 shekels and the subsequent events after signing the agreement...!

-        The Ministry of Finance did not disclose amounts of receivables related to salaries and wages payable to third parties within the public debt reports, noting that the necessary reconciliations for these accounts were not carried out..!

-        The Ministry of Finance did not disclose the payroll data in Note 13.. Salaries and wages in the consolidated financial statements for the years 2018 and 2019.. in more detail.

-        A bonus was paid to Ministry of Finance employees amounting to 3,163,890 shekels, and 2,328,692 shekels for the years 2018 and 2019, respectively, and the value of these bonuses was charged to the salaries and wages appropriation item No. 211, instead of charging them to the "budget appropriation for bonuses"; by recording the value of these bonuses to accounts related to the "salaries and wages" budget item, sums were paid as bonuses, (in violation of the general budget law) which states "No expenditure may be contracted or any advance paid that has no appropriation in this Law by Decree, and no obligation may be incurred for any amount that exceeds these appropriations."

-        The Ministry of Finance did not disclose the balance of the account Payments, Deductions, and Advances — Clearing Session 322803 credit — within the public debt reports, amounting to 410,011,465 shekels as of 31-12-2018 and 2019.. noting that the necessary reconciliations for the account were not carried out, and the State Audit and Administrative Control Bureau (SAACB) was not provided with a certification letter for the balance..!

-        Some loan balances and current debit account balances recorded in the accounting records do not match those disclosed in the public debt report; for example, the total differences between what was disclosed in the public debt reports for January 2018 and 2019 and the accounting records regarding the current debit account for Bank of Jordan amounted to 1,269,494 shekels as of 31-12-2018 and 1,207,457 shekels as of 31-12-2019..

-        Balances of some external loans recorded in the accounting records do not match those presented in the financial statements related to public debt, in Notes 10, 19, 20 for the years 2018 and 2019, compared with the balances of these loans according to the received certifications, where the total differences between what was disclosed in the public debt report for 2018 and 2019 and the accounting records regarding external loans amounted to 51,268,173 shekels in 2018, and 80,452,197 shekels in 2019...! Such as the (Al-Aqsa and Jerusalem Fund) loan, and loans related to the World Bank loan, the Italian loan, the Islamic Development Bank loan...!

-        A reduction in the value of financings from local institutions (Orphan Funds Management and Development Institution, and the Palestinian Alimony Fund..) was disclosed by 1,550,000 shekels in 2018, as the Ministry of Finance did not disclose amounts payable to the (Alimony Fund) arising from the renewal of the investment agreement with the (Palestinian Alimony Fund) amounting to 1,550,000 shekels, in addition to the accrued profits thereon, noting that the borrowers from the two institutions (Orphan Funds Management and Development Institution – 50,000,000 shekels –, and the Palestinian Alimony Fund 1,550,000 shekels -).... is the Petroleum Authority...!

-        The Ministry of Finance removed disclosure of the Chinese loan, amounting to 18.9 million shekels, from the Ministry’s monthly financial reports without supporting documentation for the removal.

·       Reservation on Note No. 14: Expenditures - Non-salary:

-        The Palestine National Fund is considered one of the responsibility centers included in the general budget laws.. and the Fund’s audit is carried out based on a mandate from His Excellency the President, in his capacity as Chairman of the Executive Committee, pursuant to Presidential Decree No. 5 of 2017 as it is an institution of the Palestine Liberation Organization (PLO), and since the Fund constitutes an important part of budget expenditures, and the amounts transferred to the Fund from the public treasury accounts have a material effect on the financial statements, and because the SAACB did not audit these amounts, the State Audit and Administrative Control Bureau (SAACB) does not express an opinion on these amounts, and on their conformity and compliance with applicable laws, regulations, rules, and decisions..!

Date: 5-8-2022