Revenues of the Ministry of National Economy in Palestine (2019–2021)

●      Episode No. (3)

-        It appears that there are cases of manipulation and embezzlement in some payment receipts related to the collection of the revenues of the Ministry of National Economy, and its directorates in the Ramallah and al-Bireh and Hebron governorates, through the Bureau’s auditing of the final accounts of the State of Palestine for the years 2019-2021; and considering the account of the Ministry of National Economy to be an integral part of these accounts, there were found cash deposits in the bank accounts belonging to the Ministry of National Economy that have no legal supporting document, and by auditing a sample of these deposits it was found that there are cases of manipulation and embezzlement in some payment receipts related to the collection of the revenues, where it appeared that the amount stated in the paper deposit slip was not consistent with the amount deposited in the bank, and the Bureau’s report added regarding the most important material observations:

-        The primary responsibility for preventing and detecting fraud lies with the Ministry of National Economy, by designing and establishing an effective internal control system capable of detecting fraud if it occurs,

-        Some deposit slips show manipulation: their value in numerals and in words (spelled out) was altered after being stamped by the bank, so that these slips equal the value of the revenue that should legally be collected, and payment receipts stamped with the bank’s stamp do not appear in the bank statements of the Ministry of National Economy.

-        The Bureau has reservations about the work of the Ministry’s committee for several reasons, including:

●      The committee examined and tallied the amount of the differences only from the basis of 93 deposit documents in the two currencies shekel and dinar, out of a total of 7,750 deposit transactions during the years 2019-2020, which is an inappropriate and unrepresentative sample, since there are other deposit slips that were manipulated and not discovered by the committee.

●      The committee did not take into account 41 deposit slips when tallying the embezzled amounts, on the pretext that there are no data about them and the deposit slips were not attached to the file; upon examining a sample of these slips, the team of the State Audit and Administrative Control Bureau (SAACB) was able to examine the transaction and the supporting documents attached, contrary to the committee’s claim, which confirms that the committee did not exercise the necessary professional care.

-        It is clear that the absence of control measures over bank deposit slips and the revenue collection in the ministry, as stated in the report, resulted in a clear shortfall in internal control and governance, and was one of the main aspects of the deficiencies in internal control procedures; the Bureau’s report also believes that the Ministry did not perform a monthly reconciliation between the amounts shown in the monthly collection reports and the bank statement, and did not carry out a reconciliation between them and investigate the reasons for any discrepancies by all available means.!

●      The report added that the ministry and its subordinate directorates accepted the bank deposit slip if it was stamped with the bank’s stamp without attaching the bank deposit notice!...

●      The Bureau’s report also clarified that there is no central register in the ministry, nor a subsidiary register in the directorates, of the deposit slip books, nor is there any evidence that these books are held on custody by ministry employees and used only by them.!

●      In my opinion the negligence is clear from what the Bureau’s report states; basic elements of internal control were unreasonably absent.!....What do they do in the Audit Department?.... What do the accounting and reconciliation departments do? It is among the fundamentals of accounting work in public and private financial operations, and even in keeping the accounts of a grocery store, to reconcile and make reconciliations with the bank account and the supporting documents... and that this be done daily, or at least weekly... and to exert a little skill and professional care... what happened should not have happened..!

●      As for the penalties imposed on those negligent... they did not appear in the Bureau’s report.. certainly, but the penalty should be increased to deter the lax and indifferent from fulfilling the duties and responsibilities of the position..!

●      A response was sent to the State Audit and Administrative Control Bureau (SAACB) report by the Ministry of National Economy, in which the ministry adopted all the Bureau’s recommendations contained in its report, and the report was forwarded to the Anti-Corruption Commission.