The Palestinian Al-Nafaqa Fund: Between Collapse and Continuation

There are major challenges facing the Al-Nafaqa Fund that weigh heavily on it. The greatest challenge is the existence of accumulated amounts for the beneficiary categories from previous years that have not been disbursed...-as we will explain later, due to tight liquidity!!- There is also another challenge: the recovery of funds paid to beneficiaries from persons who are obligated to pay these expenses. Coordination is underway with the Public Prosecution to pursue this group to collect the dues. Also, the small number of beneficiaries is another major challenge facing the Palestinian Al-Nafaqa Fund!!

The financial and administrative report of the Palestinian Al-Nafaqa Fund for 2017 stated that the Fund began investing its money in 2016, where the report indicated that the Fund’s Board of Directors renewed an investment agreement with the General Petroleum Corporation in the amount of 1.5 million shekels, in return for a profit rate of 6% annually, and that this investment was guaranteed by the Ministry of Finance as stated in the report..!! It was renewed with the same amount during September 2016, and the Board was unable to renew the investment in 2017, as the report quotes the Fund’s Board of Directors saying they are looking for a safe investment.!!..Despite our note of the Palestinian Ministry of Finance monthly report for months of 2018, where the report explained about the government’s domestic debts...that at the beginning of 2018 there were loans from public institutions amounting to about 52 million shekels, and the report clarified at the bottom of the page that this amount is loans from the Orphan House and the Al-Nafaqa Fund to the General Petroleum Corporation...Palestinian.!!. And the balance of this debt remained and appeared in the Ministry’s statement in December 2018 as about 50 million shekels..meaning the loan was not repaid either to the Al-Nafaqa Fund or to the Orphan House Fund, as the numbers shown in the Ministry’s ledger suggest.!!! Where the indebtedness of the General Petroleum Corporation increased to about 895 million shekels, an increase over 2017...! And it is customary that the Ministry of Finance does not guarantee an institution unless the public institution intends to borrow, in which case the Ministry adds its guarantee....which means that the investment mentioned in the financial and administrative report of the Al-Nafaqa Fund..was a loan, despite the Al-Nafaqa Fund having received interest from this loan..in 2017 (part of 2017), about 17,000 shekels as stated in the external auditor’s report on the Al-Nafaqa Fund’s financial statements for 2017...but the question remains, why does the Fund invest at a time when there are accumulated dues for beneficiaries!!..Or likewise, how is borrowing from the Al-Nafaqa Fund occurring while there are accumulated financial entitlements for beneficiaries from previous years, in addition to the number of beneficiaries being inconsistent with the numbers of divorced women at the courts...!!

It is worth noting that the Fund was on the verge of collapse – as stated in several previous remarks by officials in the Fund – due to the lack of sufficient revenues to pay beneficiaries...and this was the case until 2017...at the same time the Fund invested or a loan was obtained from the Al-Nafaqa Fund in favor of the General Petroleum Corporation...despite the statement that there were no surpluses or sufficient revenues to cover beneficiaries’ entitlements.....!

The State Audit and Administrative Control Bureau (SAACB) financial and administrative report for 2017, regarding the Palestinian Al-Nafaqa Fund under the sector name "Civil and Security", stated that the number of beneficiaries from the Palestinian Al-Nafaqa Fund is very small compared to the numbers of divorced women, amounting to about 428 files distributed across the governorates of the homeland by the end of 2016, and that there is no community awareness of the work of the Al-Nafaqa Fund, nor are workshops held to introduce the Fund, its mechanism of operation, and the goals for which it was established, and there is no electronic linkage between the Sharia courts and the Al-Nafaqa Fund with regard to cases in which maintenance judgments are issued...!!
The report explained that there were amounts due to beneficiaries of the Al-Nafaqa Fund amounting to 4,250,000 shekels up to the end of 2016..which contradicts the main purpose of establishing the Fund, which is to economically enable beneficiaries and spare them the specter of need and poverty...!!!

It is worth noting that the State Audit and Administrative Control Bureau (SAACB) in its 2017 report did not refer to the amounts invested or borrowed from the Al-Nafaqa Fund...to the General Petroleum Corporation...!!

A brief overview of the Palestinian Al-Nafaqa Fund...of lofty aims...The Palestinian Al-Nafaqa Fund was established under Law No. (6) of 2005..and later amended by Decree-Law No. 12 of 2015, where the purpose was to expand the Fund’s revenues...with the aim of guaranteeing execution of a maintenance judgment that cannot be executed due to the absence of the judgment debtor or his unknown residence!! or the lack of funds from which the judgment can be executed, or any other reason....and the supreme idea behind establishing the Fund is to ensure the cohesion of the Palestinian social fabric from disintegration and to preserve the human dignity of the marginalized families benefiting from the Fund’s services...especially in light of the difficult economic conditions suffered by Palestinian society...whereby the Fund can loan women who have been awarded maintenance — which is difficult to execute against the judgment debtors — from this Fund in the amount awarded, and the Fund itself later collects from the maintenance-debtor, and he is charged a financial fine of 5% of the amount disbursed from the Fund....(this was stated in an article in Al-Hadath Palestinian newspaper, in the same context about the Fund’s situation...and weak revenues)
The article added that despite the noble humanitarian message for which the Fund was established and which constitutes a pioneering idea in our Arab world, and despite the great hopes pinned on it in strengthening the system of social justice and protecting marginalized families excluded from services from being lost, as it is their last refuge..it has become threatened with permanently ceasing to operate due to accumulated financial deficit, which could reach 2 million shekels, and that this deficit may worsen over time due to the increase in the number of marginalized beneficiary categories and the scarcity of financial resources... (this was published under the title of an article in Al-Hadath newspaper under the title "The Palestinian Al-Nafaqa Fund may stop permanently").

Ms. Professor Fatima Moqqat, Director General of the Al-Nafaqa Fund, says that the Fund’s revenues are less than its expenditures..and according to the Fund’s law, the Fund’s financial resources consist of marriage contract certification fees or a divorce certificate (hajat talaq) fees..and fees imposed on every certified marriage contract submitted to the competent court and the monies the Fund collects from those judged against..and grants, donations and aid if any, and amounts allocated from the annual general budget of the Palestinian Authority..if any!!.

Ms. Moqqat, the Fund’s Director General, adds in her defense of the Fund and its beneficiary categories that, contrary to the stereotypical image that beneficiaries of the Fund are women, 70% of the beneficiaries are children, and the expenditures vary to include: maintenance of relatives, educational maintenance, medical maintenance, housing maintenance, parental maintenance 
From my review of the financial and administrative report of the Palestinian Al-Nafaqa Fund for 2017, the report stated that the Fund’s total revenues in 2017 were 8,743,926 shekels, while its operating expenses amounted to 1,837,614 shekels.. The Fund’s financial and administrative report prepared by the management of the Fund indicated that there are accumulated entitlements for beneficiaries in previous years due to the weakness of the Fund’s resources,..and the report indicated that the Fund had begun to cover part of the previously accumulated entitlements at a rate of 20%, and 36 workshops were held to introduce the Fund..and the financial and administrative report for 2017 indicated that the accumulated amounts for beneficiary categories from previous years are the greatest challenge facing the Fund and that it will take several coming years to eliminate them definitively..!!

The report indicated that the Fund provided its services during 2017 to 14,882 beneficiaries through 646 enforcement files, and 11,540 children benefited from the Fund’s services with an amount of approximately 3 million shekels while 2,044 women recovered an amount of 820,401 shekels, and the total disbursed to beneficiaries during 2017 amounted to 4,275,548 shekels....Note..the US dollar equals 3.61 shekels...

Date: 26-2-2019