The General State of Public Funds in Palestine

Episode No. (1)

●      After reviewing the annual reports of the State Audit and Administrative Control Bureau (SAACB), most recently for the year 2024, it was noted that a characteristic of administrative complacency...and weakness in responding to the recommendations of the State Audit and Administrative Control Bureau (SAACB) in some of the entities subject to the Bureau's oversight, are harming the ability to keep public funds protected...!

●      It is known that the State Audit and Administrative Control Bureau (SAACB) in Palestine...has oversight over about 4,643 entities from centers of responsibility, public bodies and non-governmental organizations, noting that the Bureau's reports are non-binding, and rather its recommendations or observations or reservations are accepted by the entities subject to its oversight... Not to mention that there are some centers of public responsibility..not covered by the Bureau's oversight!

●      The State Audit and Administrative Control Bureau (SAACB) detects the loci of malfunction and points of weakness in the audited entities, and therefore, in order to ensure that the audited entities deal correctly with the Bureau's observations and recommendations, it is necessary to give the Bureau's reports and audit outputs the necessary importance, to adopt the recommendations, and to take the required corrective measures to preserve and protect public funds.

-        However, through reviewing dozens of the Bureau's annual reports, I observed that the degree of responsiveness to the Bureau's recommendations and observations contained in its annual reports, according to the 2024 annual report as an example, reaches a limit of 67% (during the legal period). It is an acceptable percentage, but it is not good, especially in a country trying to seriously lay the foundations of its state. In this regard, it was noted that even within this 67% we noticed many responses from audited entities to the Bureau's recommendations in terms that the audited entity "has adopted most of the recommendations contained in the report.. and that it will work on addressing that"... However, after following up on the implementation of the Bureau's recommendations and observations, we found that these responses were not translated into taking measures and steps to remedy the entity's shortcomings, as we noticed repetition of the same observations and recommendations by the Bureau concerning some of these audited entities, annually and over successive years!

●      The General Petroleum Authority is one of the entities with repeated observations, recommendations, and reservations by the Bureau annually, within the many successive annual reports, noting that the General Petroleum Authority is basically a revenue-generating entity.. yet its financial position is burdened with debts from public institutions, and from financial institutions, and from public funds.. and from its service suppliers (transport companies)..

●      We briefly list some of the recurring observations from the State Audit and Administrative Control Bureau (SAACB) annual reports that concern the General Petroleum Authority, for example...during the period from 2020 to 2024, after inventorying the Authority's warehouses by a committee at the end of each year, in which the State Audit and Administrative Control Bureau (SAACB) participates as an observing member – an example of this: (the fuel warehouses inventory committee affiliated with the General Petroleum Authority at the end of 2023 where it was mentioned in the Bureau's 2024 annual report):

1-      The continued existence of discrepancies (loss), in quantities of gasoline and diesel items. This loss increased in 2023 compared to 2022 (for example): a decrease in loss quantities was noted at the end of 2022 compared to 2021, despite an increase in purchases in 2022, (loss of diesel at Na'lin depot 158,550 liters while it was in 2021 449,755 liters), and the Bureau's findings (general inventory 2023) show discrepancies (loss) in quantities of Premium 95 gasoline amounting to 560,907 liters, and diesel amounting to 220,080 liters, in addition to some positive differences (surpluses) for kerosene and light fuel types. According to our review, a loss in fuel quantities at the Authority's depots continues to exist at the end of each year (for the years 2019 through 2023 which were studied as an example).. In addition there are differences in stock balances of various fuel types at Na'lin and distribution points represented (Tarqumiya, Gaza and Barta'a), and it was found during the inventory of the gas depot in Na'lin consisting of 5 tanks on 31-12-2020 that the meters were out of service, in addition to the existence of ledger balances for fuel and gas at unloading points, despite the absence of a physical depot on the ground. Also there is an entry for the Gaza depot balance on the Bisan program, despite the absence of Authority depots in Gaza, as these balances date back to previous years which indicates the inaccuracy of stock balances, which requires the Authority to clarify the reasons for these discrepancies and the reasons for their repetition over past years, and to address the malfunction!

2-     The absence of meters at the General Petroleum Authority to measure quantities of fuel received when accepting purchased quantities, and the absence of regular calibration of point-of-sale meters, or spillage of quantities, or any other reasons that may lead to loss... despite the Bureau's indication in its previous reports of the necessity of installing these meters, however up to the date of preparing this report issued in May 2024, the quantities of fuel entered into the depots were not verified using meters belonging to the Authority!

3-    Inaccurate meter readings, which lead to the General Petroleum Authority losing quantities of fuel arising from the actual quantity being greater than the loading computer reading, meaning that the quantities sold are greater than the meter reading and the invoiced quantities, and this represents a loss of fuel quantities for the Authority (general inventory 2023).

4-    The fuel depots inventory committee affiliated with the General Petroleum Authority did not inventory the gas depots, which resulted in not knowing the actual balance of gas quantities in the depots (general inventory 2023), for example.

5-    The discrepancies between the actual fuel balance in some depots and the fuel balance recorded on the Bisan program (the ledger balance) were not adjusted on an ongoing basis, which resulted in the inaccuracy of the ledger fuel balances and consequently in cumulative differences that affect the accuracy of the Authority's financial data in subsequent years.

6-    It was found that there are discrepancies between the quantities of purchases of some fuel types recorded on the Bisan program and the quantities disclosed in the incoming letter from Al-Baz Company of the quantities supplied to the Petroleum Authority according to the table (inventory 2019), and the Bureau noted delays in posting purchase invoices from Baz Company in some periods.

·       From the State Audit and Administrative Control Bureau (SAACB) annual report for the year 2024