State Final Account of Palestine — Grants and Assistance, 2014–2015

· From the observations of the State Audit and Administrative Control Bureau (SAACB) in Palestine....on Note No. (9) – Grants and Assistance:

- The accounting directive regarding not recording indirect grants in the amount of 700,000 dollars is incorrect.!

- Some trust account balances are incorrect, due to the Ministry of Finance recording cancellation entries across different fiscal years..!

- The Bureau was not provided, up to the end of the audit, with confirmations from the donors regarding the value of grants provided to the Ministry of National Economy, the High Judicial Council, the Ministry of Health, and the Ministry of Agriculture.!

- Grants to the Water Authority were overstated by 90,000 يورو, due to recording an advance as a grant during 2014, and the value of grants and assistance was understated as a result of the Ministry of Tourism and Antiquities recording some grants as advances in the amount of 408,877 شيكل during 2015, and in the amount of 258,312 شيكل during 2014, and the Miscellaneous Revenues account was overstated by 60,000 يورو due to the Ministry of Finance recording (the return of the advance as revenue instead of reducing the liability (the Austrian grant)) during 2014....!

- The Grants and Assistance account for 2014 was reduced by 30,620 شيكل, as a result of recognizing transfers between bank accounts as credit grants...!

- The accounting directive for (recognizing grants) is incorrect across some different responsibility centers as follows:

- The Grants account for the Higher Council for Youth and Sports was overstated by 438,706 شيكل, the Grants account for the Energy Authority was overstated by 45,539,922 شيكل, the Grants account for the Ministry of Social Development was overstated by 34,289 شيكل, due to recording bank opening balances at the start of 2014 against grants, and an overstatement of 79,968,168 شيكل for grants during 2014 resulting from the Energy Authority recognizing the transfer sent to it by the Ministry of Finance, related to the European Investment Bank loan, as grants.!

- The Grants account of the Energy Authority was overstated by 227,191 شيكل during 2014, due to recording the Ministry of Health's repayments on the revolving loan as grants!

- Grants were overstated by 119,955 شيكل, due to duplicate recognition of the grant provided by the State of Austria during 2014.

- The Grants account of the Ministry of Culture was overstated by 61,788 شيكل because of the erroneous accounting entry for the transfer received from the Ministry of Finance during 2014!

- Grants and assistance were overstated by 137,259 شيكل, due to recording loans as grants, and a loan was recorded in the amount of 7,395,957 شيكل resulting from the Energy and Natural Resources Authority recognizing the transfer sent to it by the Ministry of Finance related to the European Investment Bank loan as grants during 2015!

- An overstatement of 25,006,860 يورو resulted from the incorrect accounting directive in recognizing financial transfers by the Ministry of Finance related to European Investment Bank loans!

- The Ministry of Finance and some other responsibility centers did not comply with the accounting policy related to recognizing indirect grants totaling 5 million dollars, which represent part of a grant from the Sultanate of Oman in 2014, and the value of indirect grants was reduced by 206,700 شيكل during 2015 due to the Investment Promotion Agency not recording them, and indirect grants for 2014 and 2015 were reduced by 337,931 dollars due to the Ministry of Transport and Communications not recording them, and the value of indirect grants was reduced by 695,918 شيكل due to the Water Authority not complying with the accounting policy followed by the Ministry of Finance in recording indirect grants, which led to non-disclosure and non-presentation of indirect grants in the 2015 financial statements!

- The value of incoming transfers was reduced because the Ministry of Tourism recorded an exchange rate of one shekel per dollar when recognizing and recording the financial transfers related to some grants, which led to treating incoming transfers totaling 51,323 dollars as equivalent to 51,323 شيكل...!

- A reduction in the value of in-kind grants disclosed in the 2015 financial statements resulted from their not being recorded, represented by in-kind grants from the Korean government valued at 2,981,000 يورو, the Cooperation Foundation 172,977 دولار...and the Venezuelan government valued at 18,000,000 دولار.!

- A reduction in the value of grants provided through third parties in the 2015 financial statements, due to the Ministry of Social Development not recording them, represented as follows: 240,000 كرون نرويجي Save The Children, UNICEF valued at 1,010,000 دولار, the European Union valued at 1,934,000 دولار, the Islamic Development Bank valued at 70,000,000 دولار, and Terre des Hommes Switzerland valued at 216,000 شيكل, noting that the start to end dates of the projects related to these grants encompass several years including 2014, 2015..!

- The Ministry of Finance did not comply with disclosing the value of unspent grants and assistance in the following amounts: World Health Organization grants - to the Ministry of Health - in the amounts: 128,650 شيكل, and 3,471 دولار, and 45,854.23 دولار.. in addition to a CBM grant - to the Ministry of Education and Higher Education - in the amount of 192,545.6 شيكل, and a European Union grant – to the Water Authority - in the amount of 241,583.44 شيكل.

- The Ministry of Labor's external grants and assistance were not inventoried and their nature not determined (direct, indirect, in-kind), and they were not recorded in the accounting records...! according to the agreements concluded with donors, and disclosed in the financial statements within the Note on Grants and Assistance for 2014 and 2015 totaling 8 million يورو from the European Union, and 4 million يورو from Swiss cooperation.

- Date 22-12-2020