SAACB report on the revenues and expenditures of the Ministry of Awqaf and Religious Affairs for 2022

( Episode No. 12)

-       A compliance audit was conducted of the revenues and expenditures of the Ministry of Awqaf and Religious Affairs for the year 2022, and the main observations reached by the report were indicated, which include the existence of weakness in financial governance, monitoring, compliance, negligence, transparency, and documentary evidence, in addition to the lack of a comprehensive inventory of waqf properties, in light of shortages in waqf deeds - title deeds - held by the Ministry!

-       Examples of some of the observations contained in the body of the Diwan's report are listed below:

●      Observations related to governance:

-       The total revenues of the Ministry of Awqaf and Religious Affairs for the year 2022 amounted to 15,540,687 shekels, while expenditures amounted to 16,588,664 shekels. It was observed that no budget and annual plan were prepared for the Ministry that would specify the tasks and activities to be implemented during the year, and the Internal Audit Department did not perform its assigned duties by auditing the Ministry's financial work, from revenues and expenditures, at the Ministry headquarters and directorates!

●      Observations related to financial affairs :

-       The Financial Department did not prepare a financial report at the end of each fiscal year showing the true financial position and the Ministry's revenues and expenditures during 2022, as the accounting program and financial statements are not closed at the end of each fiscal year!

-       The work of accountants and their compliance with laws, instructions, and regulations was not followed up with regard to tracking the collection of revenues in the directorates, the correctness of their recording in the Ministry’s records, and their deposit in bank accounts!

-       Weak internal control systems in the subordinate directorates in the collection, remittance, registration, and recording of amounts of revenues from waqf properties by the Financial Department!

-       There are no sub cashboxes and bank accounts for the directorates, in all currencies, into which daily revenues collected from tenants are deposited in preparation for remitting them to the Ministry's main bank account.

-       No subsidiary receipt documents are organized on the computerized accounting program for each tenant who paid rental amounts to the directorate.

-       Checks for collection are not deposited in the bank account on a first-in, first-served basis immediately upon receipt from tenants!

-       The Financial Department does not handle returned checks in accordance with the financial system, in terms of organizing a voucher on the accounting program that records the value of the returned check on the account of the debtor!

●      Observations related to revenues

-       Lack of segregation of duties and financial authorities regarding the collection of revenues and their recording with receipt vouchers, preparation of remittance lists, and depositing collected amounts in the Ministry's bank accounts,

-       Manual collection receipts are used in the directorates by collectors without control and follow-up procedures concerning their delivery and use by the Financial Department.

-       Receipt, disbursement, and posting vouchers are not issued and posted finally ..!

-       The Financial Department in the Ministry does not track the remittance of revenue amounts that are collected to the Ministry’s bank accounts on a continual basis, as some directorates do not remit collected amounts daily.

-       Incorrect accounting recording of manual receipt voucher amounts that were collected by collectors and accountants in the directorates

●      Observations related to expenditures

-       Tax invoices that exceed the amount of 10,000 shekels are not stamped by the Value Added Tax Department.

-       Transportation allowances and holiday bonuses are paid to students of the Sharia schools without evidence of students receiving the transportation allowances they are entitled to and without approval by the disbursing officials!

●      Observations related to receivables

-       Cash advances were disbursed to employees to cover expense allowances, and the amounts recorded as outstanding against them were not recovered after the mission ended; new advances were also disbursed without closing the previous advances.!

-       Insufficient procedures undertaken by the Ministry to collect accounts receivable, as there was no evidence of periodic follow-up, notices, or warnings to ensure their collection, where receivables increased in 2022 over 2021 by the amount of 10,722,075 shekels

●      Observations related to investments

-       The Ministry does not have a clear investment plan to manage the funds of waqf properties.

●      Observations related to oversight and follow-up

-       There is no accurate inventory of all waqf properties in the Ministry, as it was found that waqf deeds or title deeds are not available for some of them, and a comprehensive survey of all waqf lands and precise determination of their areas has not been organized.!

-       There are no minutes of committee meetings, especially the Properties Committee, to study rental requests and approval decisions on them in some directorate files!

-       Weakness in following up contracts and agreements with tenants and investors, as it was found that a number of properties did not have contracts or agreements organized for them!

-       There is no documentation and inventory of encroachments on waqf properties, nor issuance of periodic reports thereon

●      Observations of Jericho Directorate : A collector exploited the powers granted to him to collect rental revenues from tenants and not remit them to the Ministry of Awqaf's bank accounts, by the following methods and means:

1-   He used the subsidiary collection receipts in his possession that were unused without marking that on the other copies (the yellow and pink) in the book, did not record them in the accounting program, did not remit those amounts to the Ministry’s cashbox and bank accounts, and retained those amounts in his possession for his personal benefit!

2-   He collected amounts from tenants, issued a collection receipt for those amounts, and recorded a date earlier than the actual collection date, did not record them in the collector’s monthly remittance or register them in the accounting program, and retained those amounts for his personal benefit!

3-   He collected amounts from tenants of waqf properties and issued collection receipts for them without recording the date of collection of those amounts, and did not record them in the monthly remittance or register them in the accounting program.

·       Opinion

-       In light of the violations and observations set out in the Diwan’s report above regarding the management of the Ministry’s revenues and expenditures in 2022, the officials of the Ministry of Awqaf and Religious Affairs must rectify the situations referred to in the report, strengthen oversight, discipline, monitoring, and compliance with laws, regulations, provisions, and rulings, and address the deficiencies apparent in the report regarding the Ministry’s revenues and expenditures in 2022. Strengthening financial and administrative oversight is a matter that averts the risks that appear in the absence of serious and professional oversight; such risks include abuse of powers (as occurred in the Jericho Directorate), where there is an established fact... wherever there is public money, there is public fear for it, and there must be a serious supervisory eye! Therefore, there must be real oversight, audit, and compliance with systems, laws, standards, and rules in public work, in addition to emphasizing the accountability of any individual, department, or directorate that neglected or neglects to perform his or its job responsibilities, which may lead to exploitation... this accountability is to preserve and protect public money in accordance with the law.