Taghyeer Community Media Company — Palestine

The company was established in 2014. It is a non-profit company specializing in the field of media, and it works to maintain safe and innovative spaces to motivate Palestinian youth toward positive change and to confront negativity and frustration.

The Diwan conducted a comprehensive audit of the company’s operations for the fiscal year ended 2019, and the report reached the following main observations:

● The General Assembly and the Executive Management

The General Assembly consists of only two shareholders, who are the general manager and his sister, and the general manager owns 70% of the company’s shares, which enables him to constitute the legal quorum for a General Assembly meeting by his sole presence, as he is the majority shareholder of the company, giving him absolute entitlement to appoint the Board of Directors alone, in addition to his unilateral ability to make and implement decisions, since he heads the executive management in the role of the company’s General Manager!

● governance and the supervisory role of the Board of Directors

The company’s Board of Directors was appointed at the beginning of 2019, that is, more than four years after the company’s establishment, contrary to the company’s internal regulations; as a result of the general manager’s acquisition of 70% of the value of the shares, the selection of Board members can be made by an individual decision of his!

There is an absence of an effective supervisory role by the Board of Directors over the company’s operations, contrary to the provisions of its internal regulations, and the company’s General Manager (the principal partner in the company) acts unilaterally in making decisions and directing the company’s activities, tasks, and authorities, in particular the selection, appointment and dismissal of the Board of Directors!

The delegation of signature authority over all the company’s administrative, legal, judicial, and financial transactions is confined to the company’s General Manager, which indicates the absence of effective oversight by the Board of Directors.

The General Manager’s single signature was authorized on bank transfers, which prevents sound governance over disbursement operations, and this also resulted in a violation of the Ministry of Economy’s instructions in this regard.

There are no financial regulations or instructions to organize the company’s affairs, which may lead to incorrect decision-making.

There are no performance indicators or comprehensive analytical reviews of the company’s activities to verify that actual activities align with its strategic plan, which may lead to deviation from achieving the objectives.

● Financial Statements

The external auditor made adjustments to the financial statements amounting to $18,463, without supporting them and recording them in the accounting system, which prevents confirmation of the accuracy and fairness of those adjustments and does not guarantee the availability of correct ledger accounts.

The accounting entries for revenue recognition are inaccurate, as the company recognized the amounts it received from donors as revenues pertaining to the year 2019, contrary to the accounting policy adopted by the company.

● The Jabal Project

The salaries expended on each of the following projects (the Jabal Project and the Ta'beer Project) were high, where salaries amounted to 79% of the total expenses of the Jabal Project and 68% for the Ta'beer Project!

The accounting entries charged to the cost center of each project are not accurate, due to a discrepancy in the amount of salaries charged to the two projects between the signed financial statements and the computerized accounting system!

● The Drosos Project

The salaries expended during 2019 were high, amounting to $41,121, representing 79% of the project’s total expenses for that year!

The accounting entries related to salaries were charged incorrectly, which may lead to erroneous decisions regarding the direction of project expenditures and exceeding the donor’s budget!

The company signed a finishing and lease agreement for the building (the Jabal building) with the company’s manager, who is the property owner at the same time...! In addition, finishing works were carried out without price quotes or tendering, which could lead to a potential conflict of interest and the realization of some personal benefits at the expense of the public interest.!

● Salaries:

The amount of salary disbursements for 2019 was high, amounting to $91,734, representing 68% of the total expenses, contrary to the Ministry of Economy’s instructions, which stipulated that administrative expenses should not exceed 25% of the total expenses, in addition to imposing financial burdens on the institution that limit its ability to direct its resources and capabilities to achieve objectives!

The amount of the General Manager’s salary and allowances increased during 2019, reaching $43,351, representing 32% of the company’s total expenses for the year, thereby imposing financial burdens on the institution that it may not be able to meet in the future..!

Date: 17-9-2022