According to PLC resolution no. (2-11-169) issued on May 27, 1997, the PLC formed a special committee, from both the Budget and Financial Affairs Committee and the Public Monitoring Committee, to study the first annual report issued by Head of the General Control Office (GCO) for the year 1996. The special committee was given the task of reviewing the GCO report and submitting its findings and recommendations to the PLC. The PLC Special Committee consists of the following members :

From Budget and Financial Affairs Committee

1- Sa'di Al-Krunz
2- Yousef Abu Safiyye
3- Azmi Shu'eibi
4- Fakhri Shaqqoura
5- Hikmat Zeid

From Public Monitoring Committee

1- Kamal Sharafi
2- Hasan Khreisheh
3- Hatem Abdul Qader
4- Jamal Al-Shati

The Committee was given three weeks time starting May 25, 1997, to submit its full report to the PLC; the Committee started its work on May 31, 1997, defining the framework, basis, and mechanism of its assignment.
 

First : The Committee's framework

1- The Committee will perform its assignment based on the principle of revealing facts on legal, administrative, and financial violations connected with official institutions in order to give responsible parties access to all information to define responsibilities and charge those involved in the violations according to the law in a very transparent way.
2- The Committee stresses the role of the General Control Office in monitoring and follow-up on the public institutions performance in all legal, administrative and financial aspects.

Second : The Committee's working mechanism

1- Reading the full report in its minute details.

2- Defining the items that include legal, administrative, and financial violations or abuse of authority, discussing and reviewing them with the concerned parties.

3- Sending letters to all parties mentioned in the report with a copy of the chapters that include them as written in the report and asking them to respond and provide explanation on the violations.

4- Asking for explanation from the General Control Office on some of the items mentioned in the report; requesting from the GCO access to detailed reports about some of the violations mentioned.

5- Forming sub-committees from the Special Committee for field follow-up; auditing with some of the parties mentioned in the report for more details on the violations.

6- Reading all feedback and answers sent by the ministries; assessing all reports written by the sub-committees concerning the tasks they were assigned to.

7- Sorting and analyzing violations to reach conclusions and recommendations in preparation for the final draft report.

8- Holding discussions on the draft report towards preparing the final version to be submitted to the PLC; keeping all related documents to be presented upon request.

Third : The Committee's working principles

1- The Committee based its work in reaching conclusions and recommendations on information received by the concerned parties or through testimonies given by officials in front of the Committee or the sub-committees; in addition to analyzing the documents.

2- The Committee maintained total confidentiality in dealing with information and made sure not to talk about or discuss their work before concluding the report.

3- The Committee was very careful in distinguishing between three kinds of violations :

a) Indirect violations, described as general phenomena, due to the lack of laws and regulations organizing the work of executive institutions; such violations cannot be related to specific figures.

b) Violations with direct responsibilities committed by specific parties which abused their positions and authorities taking advantage of the absence of the law.

c) Violations with direct responsibilities committed by certain parties that violated laws and regulations deliberately.
 

Restrictions confronted by the Committee :

1- Some parties did not show any cooperation with the Committee or delayed sending responses on inquiries sent by the Committee; Other parties did not give any answers or explanations to the Committee while others made it impossible for the Committee members to meet with them and have access to information and necessary documents.
2- The General Control Office did not respond to the requests made by the Committee on many of the issues that were ambiguous.
 

Special Notes

First : General Control Office

1- To start with, the Committee stresses the important role of the General Control Office in monitoring the performance of the Executive Authority and auditing all accounts of all ministries, services, and public institutions in the PA, in addition to making sure that PA institutions are abiding by the laws and regulations. The Committee also stresses the necessity to create the proper atmosphere in which the General Control Office can perform its work.

2- The Committee noted the absence of the PA Cabinet role in cooperation, coordination, and follow-up on the work of the General Control Office and in reviewing the reports prepared and submitted to the President of the Palestinian National Authority.

3- The Committee noticed that there was no cooperation or coordination between the General Control Office and the Public Employment Office and the Finance Ministry, especially the Control and Auditing Department; it seems clear through the unrealistic financial statements mentioned in the General Control Office report, in particular in its comment on the General Budget for fiscal years 1995 and 1996.

4- According to the Public Control Office Law, a lot of parties are supposed to answer to the GCO; yet, the Office did not conduct any monitoring on them, nor did it check their financial statements. The parties include many public institutions, companies owned or partially owned by the PA, or receiving aid from the PA, such as Petroleum General Commission, Al-Bahar Company, Tobacco Company, the Palestinian Company for Commercial Services, the Palestinian National Company for Economic Development, and the Palestinian Broadcasting Corporation.

5- The General Control Office gave itself the right to prepare laws and legislation and to develop policies effective in the PA, in addition to the right to dismiss any employee, which is considered a violation to the jurisdiction of the Executive, Legislative, and judicial authorities.

6- The GCO classified its employees into two categories; the first category is subjected to a special scale in the GCO while the second category follows the Civil Service Law.

7- The GCO did not work as one body in the West Bank and Gaza, which is clear in the information mentioned in its report.

8- It was mentioned in the GCO report that the Head of GCO enjoys authorities of the minister in the Finance Ministry, which gives him jurisdictions and authorities of Finance Ministry according to resolution no. (301/1995).

9- The GCO lacks structural hierarchy in its offices.

10- It was mentioned in the GCO report that the Office conducted some contacts with the Donor Countries and other concerned parties in our embassies abroad asking for a complete report about the financial assistance received by NGOs.

11- The GCO report did not mention any role of the Office in monitoring the work of military and security services, and checking their accounts and financial statements.

Recommendation :

Accordingly, the Committee recommends to your respectful Council to request from the Executive Authority to present the GCO Law to the Palestinian Legislative Council as soon as possible for revision and amendments to be approved according to conventional procedures.
 

Second : The report submitted by Head of GCO

1- The report submitted by Head of the GCO did not mention the first Director of the Office or the role he played while being in office; everything was related to the current Head of the GCO, who considered himself the first director of the Office.

2- The report did not give credit to the employees who worked in preparing this report.

3- The report did not cover all Palestinian districts; it mainly dealt with public institutions and ministries in Gaza district only. The report covered only 8% of the ministries, public institutions, municipalities, and NGOs, totaling 62 out of 773 according to the GCO Head report. This number does not include all PA security and military services, nor the companies owned by the state or those assisted by the PA, including the PA Cabinet, the Palestinian Broadcasting Corporation, which should be subjected to legal, financial, and administrative control by the GCO and other monitoring bodies.

4- Although this report covers the period between the coming of the PA until December 31, 1996, many of the reports given cover different time periods ( some till the end of 1995 and others until mid 1996), the fact which makes comparing reports meaningless and refutes all subsequent conclusions, especially on total amount of money that was considered wasting public funds.

5- The Committee concluded after reviewing the report that several of the figures are not accurate, especially in relation to the general budgets adopted for fiscal years 1995 and 1996. The report also lacked scientific basis and criteria in calculating the sums that were categorized as revenues in the report or public funds wasting, which caused confusion in the exact figure of funds wasted.

6- The Committee noted after reviewing detailed reports, prepared by the Office inspectors, and sent to the concerned parties that were mentioned in the report saying that many of the important notes were ignored during preparing summaries of those reports. The Committee found out that several serious violations were committed, but never mentioned in the report, which raises doubts and require legal follow-up. The violations will be stated later in our report on the ministries and public institutions. It was found out that several of the conclusions reached are not very accurate.

7- There were several places in the report that recommended certain charges but without specifying persons involved, the matter which violates legal procedures and harms the PA in general. Instead, it was better to point charges to certain figures without any evasion.

8- The Committee noticed also that the report did not deal with some of the basic issues as one subject, which made them lose importance. The issues were mentioned separately and randomly on each ministry or institution. For example,  on the violations related to fees, the report mentions the repeated violations in most ministries and institutions.

9- The Committee noted that many of the ministries and institutions in the PA did not show cooperation with the inspectors in the GCO and prevented them from performing their duties.

Despite of our comments on the existence of major calculations problems in the financial reports of the GCO report, we highly commend the report of Head of the GCO, and stress the importance of preparing an annual report on the performance of PA national, legal and administrative institutions and services in order to achieve transparency and accountability. The Committee also stresses the need for cooperation between PA institutions and services with the GCO so that the latter can perform its duties in the best possible way; it is necessary  for all parties to respond and answer to the GCO.

Recommendations:

The Committee recommends to your respectful Council to request from the Executive Authority to recruit more technical and specialized cadres to the GCO and to activate its monitoring role to include all ministries, PA security and military services, and companies owned or partially owned by the PA so that it can perform its duties in a more efficient way. The Committee also requests that the GCO Head assign a committee of experts and advisors, both from the GCO and from outside, to conduct a general review on all information and financial statements mentioned in its annual reports to be edited before being presented to the general public.

Third : Ministries and Public Institutions : (A study and evaluation report on the General Control Office report including the Committee's findings on the performance of ministries and public institutions)

a- The Committee agrees with most of what was mentioned in the GCO report as general comments and recommendations on the work of the Finance Ministry taking into consideration that the Budget and Financial Committee report on the General Budget of fiscal year 1997, approved by the PLC in May 1997, included most of these comments and recommendations. The Finance Minister did stress in his response to the report that the ministry is committed and actually working on implementing the recommendations mentioned in the reports of GCO and PLC Budget Committee. The ministry, he added, is currently preparing and finalizing major legislature, such as the Law to organize the general budget, the financial system, the public supplies system, the public works system, the jobs hierarchy system, internal inspection instructions, auditing, income tax law and customs law.

b- The GCO report had reported about the dangers of having two centers for ministries and public institutions, one in the West Bank and one in Gaza; however, it overlooked the dangers of sustaining such a situation, which might mean there is a division and lack of coordination between the two centers, negatively affecting the unity and centralization of decisions and their effects on financial and administrative performance of all PNA ministries and institutions, thus reinforcing the current gap.

c- The Committee highly commends the request made by GCO Head in his report demanding that employees in the field of receiving payments and public funds or those with financial responsibilities to present a financial affidavit that guarantees the PA's rights and the safety of public funds; however, the report did not talk about several high officials in the finance ministry and other ministries, who work in trade or those participated in establishing private companies, and how they abused their authorities and took advantage of their positions, thus violating the law.

d- The Committee takes into consideration the comment mentioned in the GCO report on spending money and recording expenses in the ministries' budgets by the finance ministry without prior notice or coordination with the concerned ministries, a matter that negatively affects the ministries' work and means to control their budgets. After reviewing the finance ministry's response, the Committee sees it necessary that the ministry commits itself to specify parties (persons) authorized to transfer money to ministries and public institutions mentioned in the 1997 general budget. it should not be allowed to pay or transfer any amount of money and to record it on the concerned parties' budget unless enclosed with a financial credit outlined in the approved budget; it should also be signed by the person in charge of transferring money; names of those authorized to transfer money in every ministry and institution should be circulated on all departments and units in the finance ministry.

e- The GCO report did mention in its general chapters the need to calculate all revenues and transfer them directly to the treasury. Yet, it did not point out in its report on the finance ministry that the ministry is responsible, according to the law, for running the treasury accounts; the report did not point to the non-tax revenues collected by public companies owned or partially owned by the PA, in particular the Petroleum General Commission, Tobacco Commission, the Palestinian Company for Trade Services (Cement Company), in addition to the need to subject all revenues and expenses to monitoring and auditing by the monitoring and auditing department in the finance ministry and the GCO. This was the item emphasized in the Budget and Financial Affairs Committee in its report on the 1997 general budget.

f- The GCO report mentions blatant interference by several security and military government services in the affairs of Customs office, which made the Finance Ministry lose its ability to control and guarantee the transfer of all money into the treasury, causing waste and manipulation of public funds. The report also talks about the civil ministry's interference in the affairs and jurisdictions of the finance ministry in the area of customs exemption, causing the PNA treasury losing a major source of income; the Committee warns of the dangers of resuming in such an abnormal and illegal situation.

Thus, the Committee recommends to your Council to request from the Executive Authority the following :

1- To abide all unconcerned parties, in particular military and security government services and the civil affairs ministry not to interfere in the affairs of the Customs Office.

2- To define the responsibilities of speculating value of customs, collecting, and exempting customs in the finance ministry, as the sole party in charge of this issue.

3- To abide all parties that collected customs fees to transfer them to the finance ministry treasury.

4- To form an official inquiry commission to look into the illegal interference of military and security government services and the civil affairs ministry in the affairs of customs office and customs exemption and to bring those involved before court.

5- To have the Customs Office jurisdictions under the finance ministry and to rectify the current situation according to the law.

6- The Committee confirms what was mentioned in the report on the need to set up a special system to supervise grants, money  and other donations received by ministries and public institutions from local and foreign sources and how to use them in a way to secure the cash transfers to a private fund according to the general budget law. All donations should be registered in the trust records in each ministry and institution and to inform the Supplies Department in the finance ministry so that it can follow-up on them.

7- To work on unifying the finance ministry departments in the West Bank and Gaza.

8- To prevent PA officials from working in the trade sector through abusing their powers in violation of the law.

9- To abide the finance ministry to specify the parties (persons) authorized to transfer money to all ministries and public institutions mentioned in the 1997 general budget. No money should be transferred or paid and registered in the parties' budgets without having funds shown in the approved budget. Money transferred should be approved and signed by the person responsible; all names of persons authorized to transfer money in each ministry and public institution should be circulated in all departments and units in the finance ministry.

10- The need to have all revenues and expenses of PA institutions and companies along with their financial performance under the monitoring and auditing of concerned official parties.

The Committee paid close attention to the issue of medical expenses abroad between the period from January 1, 1995 to July 31, 1997, which came up to $24 million; the Committee believes that this amount constitutes a relatively big percentage (around 20%) of the health ministry's total budget, which led the Committee to hold a meeting with the Deputy Health Ministry who attended upon authorization by the minister himself to discuss the methodology and working mechanism of abroad medical treatment department. The Committee came up with the following findings after the meeting and after having access to what was provided in terms of information and documents :

1- The Health Ministry has two offices in charge of transferring cases to outside Israeli hospitals.

2- Certain transfers, which were made without notifying the Health Ministry, came straight from the President to the Finance Ministry and money was deducted from the Health Ministry budget.

3- Some hospitals in Jordan filed complaint letters against Dr. Ibrahim Abu Hmeid, who was appointed general director in the Health Ministry and was assigned to coordinate distributing transferred patients to hospitals in Jordan; the complaint letter included accusing him of receiving bribes and of embezzlement, at which point an inquiry commission was formed  from the General Control Office, the Public Employment Department, and the Health Ministry. The inquiry commission found out that pressure was exerted to acquit him from the charge of embezzling 17,000 Jordanian Dinars. The file was kept then at the Public Employment Office. Later, a new committee was formed including Mohammad Abu Shari'a, Dr. Imad Tarawiyye, and Dr. Riyad Al-Za'noun to take a decision concerning Dr. Abu Hmeid. The decision did not agree with the recommendations of the Inquiry Commission and with the size of the violation.

Based on the above mentioned information, the Committee recommends the following :

1- To request from the Executive Authority to open an investigation file in the case of Dr. Ibrahim Abu Hmeid and to look into the investigation findings and attached documents which prove that there were accomplices involved in the case, and to transfer the whole file to the judiciary.

2- To confirm what has been mentioned in the Health Ministry response that it formed central committees for medical treatment abroad that are supposed to work according to unified and public criteria.
 

B- Medicine:

1- The GCO report agrees with the findings arrived at by the PLC Special Committee concerning some cases where bad or expired drugs were used to treat cancer patients in medical services centers of the Health Ministry, which shows negligence in terms of inspection and monitoring on pharmacies and drug stores of the ministry and that officials in the ministry are involved in this issue.

2- The Committee concluded, through field investigation tours and from the hearing session with Health Ministry Deputy, that certain drugs were accepted and used by the ministry in Gaza while refused in the West Bank because they did not meet the specifications chart and were not registered at the ministry. This matter raises suspicions and doubts that executive officials in the ministry were involved with the parties importing the drugs.

3- Tenders purchasing drugs to the ministry and the case of Al-Shifa' Company drugs in Gaza :

The GCO report made a general comment saying that purchase of drugs was done in violation to the regulations in effect without specifying the violations or those responsible; the Committee found out, through the documents received by the ministry and the sub-committee formed to investigate the issue and the testimony of Health Ministry Deputy, that Dr. Ziad Sha'th, general director of the pharmacy, allowed Al-Shifa' Company into the tender to purchase the drugs to the ministry with unregistered drugs and under the claim that the drugs are in the process of being registered, thus deciding upon certain kinds of drugs; the Committee reached the following conclusions :

a- Al-Shifa' Company sent the Health Ministry unregistered drugs that were accepted and used by the Health Ministry in Gaza while the same drugs were rejected  by the Health Ministry in the West Bank, which raised suspicions that executive officials in the ministry were involved with the mentioned company, taking advantage of their positions.

b- The Health Ministry received certain kinds of drugs that did not match the specifications chart in terms of packaging, expiry dates and issuance document; all this was made possible with the help of certain executive officials in the health ministry, in addition to the pressure exerted by the concerned company and the threats against the ministry employees, namely Mohammad Al-Zamili, a manager in the pharmacy department in Gaza. Pressure was also exerted on the West Bank Health Ministry to pay bills of these items which were rejected in the West Bank because they did not match the specifications.

c- The Company used twisted ways in collaboration with Khamis Najjar, a General Director at the ministry in Gaza, and the Civil Affairs Ministry to bring in several kinds of drugs, considered to be donations from Egypt, to the ministry through Al-Shifa' Company through Rafah Crossing. All documents and testimonies available point out to the fact that certain fraud ways were used in getting Customs exemption and Value Added Tax (VAT) exemption. The items were then sold to the Health Ministry including Customs and VAT taxes, which were never paid in the first place.

Based on the above information, the Committee recommends to request from the Executive Authority the following :

1- To open an official investigation and to transfer Al-Shifa' Company drug case to the PA Attorney General to prosecute those involved, taking into consideration that the Committee found out evidence which raises suspicion that there is financial and administrative corruption and abuse of authorities and public funds, in addition to misinformation tactics used by executive officials in the Health Ministry, namely Ziad Sha'th, general director at the pharmacy and Khamis Najjar, a general director in the Health Ministry and Civil Affairs Minister Jamil Tarifi.

2- To inquire from Health Minister Riyad Za'noun about poor performance, negligence and lack of legal action taken against those involved.

The Committee was contented with the response which appeared in report prepared by head of the General Control Committee. The committee has founded that the absence of suspected offenses need mentioning. The Ministry implemented recommendations and notes which appeared in report of the Committee's Head.

It is clear from report of Head of General Control Committee that the Committee did not conduct an eager search in Ministry of Agriculture. The only case which appears in the report, the case of the delay by Assistant Deputy Minister of Agriculture, Atta Abu karsh, in paying the due fees of one of the mandated Citrus Exporters, Ibrahim Abu Hamsheh estimated at $ 30,000. Head of the General Control Committee considered that lenience in gathering public money.

The Committee sees that there are a lot of essential issues which the Committee should review particularly the presence in Ministry of Agricultural to three competing centers semi-independence, the first group in Ramallah and run by Minister of Agriculture and the second in Nablus and run by Deputy Minister of Agriculture. The last in Gaza Strip an run by Assistant Deputy Minister. That was due to the hearing session presented by Minister f Economic and testimonies he gave before the Committee which appeared in report of the Council's Economic Committee.

2. It appeared in the Council's Economic Report and through hearing sessions with Minister of Agriculture and Deputy Assistant of the Ministry that there are many violations which give the impression of the presence of administrative corruption in the Ministry. The Committee is therefor recommended your respected Council to demand the Executive Committee that the report of the General Control Committee to conduct a comprehensive and eager inspection  in this Ministry in order to achieve reality and bringing the offenders before the Attorney General for inspection.

Reviewing the report of Head of General Control Committee pertaining Ministry of Public Works, the Committee discovered the presence of many offenses. The report finds that most of purchases were conducted with direct orders and instead of conducting tenders and dealing with restricted numbers of importers and repeating purchases from them. Minister of Public Works did not denied in his response and signed that all the notices which appeared in report of Head of the General Control Committee have been made during the time when there was no minister for  the Public Works. It is not clear from Head of the General Control Committee whether the Committee has followed up and adopted the measures needed to be pursued in such cases and identifying the responsible part for the offenses.

The Committee recommended your respected Council to demand PNA to form an investigating committee to detect the Ministry's purchase file and identifying the part or the responsible people for the offense against the enacting Financial standards and accountants in the PNA.

While reviewing the report of Head of the General Control Committee and responses of Ministry of Social Affairs, the Committee discovered that the General Control Committee did not act as it is supposed in regards to administrative, financial, and legal inspection particularly in what is related to destiny of great  donations and contributions which were received to Ministry of Social Affairs or bared the name of the ministry and whey they were treated. Concerning supply storage which belong to the Ministry in Khan Younis, the Committee confirmed what appeared in the report of recommendations. The Committee also sees that it should not find excuses that there is no fund for improving conditions of the storage so that they will  be liable for storing food. The ministry should also implement what it is needed for protecting food which is received as donations for distributing among beneficiaries. Also, it should not distribute food among beneficiaries only after being sure of their liability. Ministry of Social Affairs should examine all food in storage every now and then in order to be sure of its liability before distributing it among citizens and to work corresponding to the rule (which is received first will be distributed first).

Recommendation:

The Committee recommended that Monitoring Committee in Ministry of Finance and the General Control Committee to conduct a consecutive inspection in Ministry of Social Affairs throughout all of its apparatuses and to inspect its files and to identify all donations and other aids received in the Ministry and to present a consecutive report and to punish all officials responsible for the offenses and bringing them before court corresponding to law.

First: The Committee reviewed the report of Head of the General Control Committee and directed a message to brother Minister of Post and Communication demanding in it to respond to what is appeared in this report of information confirming and signing to the presence of several legal, financial and legal offenses in this Ministry. The Committee also confirms the necessity that the Minister will bare responsibilities because he is the first official in the Ministry. The Committee looks with surprise for not making any response by any official in the ministry regarding the report of the General Control Committee regarding their ministries which was confirmed by Head of the General Control Committee in his report  particularly the critical offenses related to suspicions of misconduct of an official position for the sake of companies which work with the Ministry. When reviewing the Minister himself by the committee, he answered that he was not Minister for Post and Communication during the time when offenses took place and that he demanded from Deputy Assistant of the Ministry Zuhair Allaham and Director General of the Ministry Muhammad Skaik to respond to what is appeared in the report since they were the two main responsible officials in the ministry by then. However, up to that date the Ministry did not receive any response from the Ministry.

The Committee recommended your respected Council to demand the Executive Authority to start an official investigation with Mr. Muhammad Skaik, Director General in Ministry of Post and Communications regarding what is appearing in report of the Head of the General Control Committee concerning the presence of suspicions pertaining his misconduct in the Ministry by making deals with local and Foreign Companies on the expenses of public money. The Committee also recommended handing over the full file of the General Control Committee on his misconduct to the Attorney General particularly on the issue of expanding Gaza Operator and circumstances of establishing a new building for Ministry of Post and Communications in Gaza. The Committee recommended also seizing both architects Bassam Hamdouneh and Ayman Matar and to form an official investigating committee to identify their responsibilities for the offense mentioned in the report relating to the building of the ministry's headquarters in Gaza.

Second: The Committee has found through the branched investigating committees that there are a lot of governmental phones supposed to be use in governmental, civil, security and military headquarters and centers, are used in homes of some officials, employees, workers in associations and apparatuses belonging to the authority. The phone bills are paid for from public money through those parties.

Therefore, the Committee recommended your respected Council to demand Ministry of Post and Communications to limit those offenses, correcting the status quo and presenting a list of offenders to concerned parties in order to return all amounts of money paid from public money and to account for officials responsible for that.

Third: The Committee looks with seriousness and astonishment for the refrain by Minister of Post and Communication from presenting the signed agreement between Ministry of Post and Communications and Palestinian Communication Company to the PLC corresponding to orders. Consequently, the Committee recommended your respected Council to direct blames to Minister of Post and Communications and confirms PLC right to study and review that agreement.

The committee revealed that there has not been any administrative or technical development in the ministry in the previous period which is proportional to the amount of work in this ministry, especially the Palestinian judicial system, the Department of Trade Records and Patents , registering companies, licensing of accountants, Department of Justice Records,  and the Department of Land Registering; according to the report presented by the Public Monitoring Board.

The committee recommends: The necessity of unifying company records and isolating them in one ministry and putting an end to the power struggle over this between the Ministry of Economics and Trade and the Ministry of Justice.

The committee also recommends: the necessity of unifying the special laws of registering and classifying lands and settling the rights between the Gaza Strip and the West Bank; also to determine a unified law as soon as possible. The committee reiterates the necessity of having specialized committees in land speculation in all districts of the country and to put a certain  system for this purpose.

1. The committee is satisfied with the findings of the Public Monitoring Board and the responses of the other ministries concerning this matter. The committee stresses that the ministry must abide by the recommendations in the report and the commitment to the financial and accounting regulations in all its financial and administrative matters, and in particular, abiding by the General Budget Law for the fiscal year 1997; including all foreign aid given to the Ministry of Labor.

2. The committee affirms the necessity for the ministry to take responsibility for granting work permits for the influx of workers according to the approved policy.

3. The Public Monitoring Board report points, in more than one place, to the loss of rights for Palestinian workers who work for the Israeli side. The committee sees the immediate necessity to request of the executive authority to form a committee to study this matter from all aspects. The Minister of Labor must present a report to the Legislative Council regarding the results and conclusions of the study  and the measures taken to ensure the rights of the Palestinian worker.

The Minister of Economy and Trade reiterated that the separation between the Ministry of Economy and Trade and the Ministry of Industry and Transportation; i.e. transferring all the financial officials in the ministry to other PA institution before assuming their positions, has largely affected the follow-up process of documenting financial records during the period which this report covered. The current financial records depend on disbursement items according to the approved general budget or the fiscal year 1997. The minister reiterated in his answer to the committee that there is one party in the ministry which currently handles the management of tenders and expenses of the ministry through a unified bank account according to law.

First: The committee stresses in  the special recommendations for the Ministry of Islamic Waqf which  were found in the report of the Budget Committee and Financial Affairs concerning the general budget for the fiscal year 1997, that all tenders and expenses of the ministry must heed to the supervision, checking and reviewing by the Department of Supervision and examining in the Ministry of Finance and the Public Monitoring Board.

Second: The committee discussed the complaints and accusations revolving around the Islamic Waqf lands and  properties and how they were invested and used and the financial and administrative condition of their employees. Consequently, the committee recommends of the council to request of the executive authority to form a special committee for Ministry of Islamic Waqf, the Ministry of Justice and the Ministry of Finance. The Public Monitoring Board, the Department of Employees and a few experts will have the responsibility of examining and checking all the matters and cases mentioned above and presenting their recommendations to the Ministerial Council to determine a clear policy for this ministry in this concern.

The committee considers that the response it received from the Ministry of Housing concerning the report of the Public Monitoring Board which contained  grave administrative, legal and financial violations committed by the ministry, is insufficient. The ministry did not present the documents requested by the committee and did not answer to the inquiries and inquisitions concerning the matters in questions such as: the construction on the "Awda City" project and the lands which were granted or allotted for some investment projects, individuals, and governmental apparatuses; the ministry's earnings from the Israeli side and the tenders received by the ministry. Most of the violations which the Public Monitoring  report indicates to were committed during the term of the former Minister of Housing, Dr. Zakarieh al-Agha. The committee affirms what was found in the Public Monitoring Board report in terms of recommendations from all administrative, financial and organizational aspects. However, the  committee discussed some serious violations which call for investigation and examining.

a. The "Awda City" Project:

The Public Monitoring report affirms that this project was carried out in violation of the general rules and regulations without any supervision or follow-up from the Ministry of Housing or any approved plan. Also the construction materials were not identical to the descriptions. Therefore, the committee recommends the necessity of forming an official investigative committee to determine the persons responsible and punishing them by legal methods according to law.

b. State lands:

The committee found that what was revealed in the Public Monitoring Board report concerning the misuse of public money in order to decrease the estimated price of government lands allotted for investment projects, is inaccurate and the amounts which were estimated in this field as a result of comparison between the estimates of the price of lands allotted for investment and development projects and the amount actually estimated is vague. That is, since the Public Monitoring Board did not take into consideration all the factors, changes and other economic, social and developmental considerations and their ramifications on the economic and investment policies. However, the committee agrees with most of the reports other points and recommendations concerning this issue. It affirms the necessity of creating and depending on a fixed policy relating to granting and allotting state lands either for individuals, institutions, projects or governmental systems according to a general plan for usage and services of government lands.

The committee recommends: The Legislative Council to request of the executive authority to form an investigation committee about the methods and principles which were applied and will be applied in granting and allotting government lands. It reaffirms that the measures taken in this concern are according to the existing laws. The violations and their perpetrators will be determined and the necessary measures will be  taken against them according to law.

In this concern, the committee affirms the Legislative Council decision number 1\26\129 which calls for the necessity of presenting all agreements and contracts signed by the executive authority with international or local parties for the Legislative Council to approve, especially those which have ramifications on the land, economics, security and social situation in Palestine.

c. Sand Dunes:

The committee affirms the recommendations of the Committee for Energy and Natural Resources in this concern and requests of the executive authority to form an investigation committee for the sales deals of sand in order to prevent the wasting of this nonrenewable national treasure. This waste has disastrous environmental effects on the future of the Gaza Strip, especially where relating to the destruction of the water sources in the Strip. The persons responsible shall be made accountable in court. The committee holds the Ministry of Housing fully responsible because it did not undertake its duties in this concern and did not prevent the security apparatus from intervening.

To start, the committee values the positive and reliable response it received from the Interior Ministry and would like to affirm the following:

a. The necessity of issuing the special law for charitable societies due to the competition and overlapping of jurisdiction between the Interior Ministry and the Ministry of Social Affairs.

b. To request of the Department of (supervision and checking) in the Ministry of Finance and the Public Monitoring Board to review and examine the accounts of the Civil Defense Governerate in Gaza and to ensure that all tenders have been sent to an account in the treasury in the Ministry of Finance according to law, until they are financially and administratively processed  in the Interior Ministry according to the recommendations included in the General Budget Law for the fiscal year 1997 which is similar to that of the Civil Defense Governerate in the West Bank. The committee also affirms what was found in the Public Monitoring report and the response of the Interior Ministry concerning this matter and calls for the persons responsible to be made accountable for the administrative and financial violations, and in particular, the Brigadier General Mohammed Mahmoud Abu Marzouq "General Director of Civil Defense" in the Gaza Strip, and to bring  these persons before a court because of suspicions concerning the manipulation of state money.

c. The committee affirms what was found in the Budget and Financial Affairs Committee report which is included in the General Budget Law for the fiscal year 1997 concerning the financial and administrative subordinancy(?) of the Borders and Crossings Administration to the Interior Ministry. The committee recommends: a request to the Department of Supervision in the Ministry of Finance and to the Public Monitoring Board to review and examine the files and accounts of the Borders and Crossings Administration and to ensure that all tenders are processed in an account in the treasury of  the Ministry of Finance, according to law.

The committee reviewed the report prepared by the Public Monitoring Board and the statements by Deputy Culture Minister Yahya Yakhluf and the Minister of Culture Yasser Abed Rabbo about the measures which have been taken to amend the administrative and financial situation in the Ministry. The committee reported that it had paid the sum of NIS 26,851,5 on January 26,1996 for the procurement and installation of a central heating system for the house being rented by the Minister of Culture. The committee found this a major violation of the financial regulations and accounts procedures of the PNA, and the committee recommends:  to request the Executive Committee to retrieve the amount in question from the ministry and to deposit it in the treasury of the Ministry of Finance; a committee would also be formed to investigate the financial violations found in the report.

The committee views seriously and denounces the Ministry of Culture's organizational structure, which contradicts all administrative and organizational principals. It considers the ministry's response, that it appointed the higher positions at the start is unacceptable. There cannot be, under any circumstances, 87.5 percent (63 of 72) of ministry employees in administrative positions, especially when many of them lack the educational qualifications for the administrative positions they hold.

After reviewing the report of the Public Monitoring Board and the detailed responses received by the committee from the Deputy-Minister of Information Mutawakal Taha and the head of Administration and Finance, Ibrahim Sajdiyeh, the committee found that there is a large sum included in the budget of the Ministry of Information during the period covered by the report which violates approved budget lines. For example, the $10,000 personal allowance of Yasser Abed Rabbo, which is no way part of the Ministry of Information; the $10,000 allotted for public relations; the NIS 79,600 for printing a book which was transferred from the presidential office; and the NIS 31,800 allowance for the Aqsa newspaper issued by the National Security Forces.

Therefore, the committee recommends that the Ministry work on abiding by approved budget items and not to spend any sum in violation of the financial and accounting regulations of the PA. It also recommends the finalizing and closing of all personal accounts in the Ministry of Information.

 a. College of Science and Technology-Khan Younis:

The committee noticed that the report of the head of the Monitoring Board did not mention the comprehensive administrative and financial report which the Board prepared in October of 1995 which showed the existence of administrative and financial corruption by the president of the college then, Dr. Riyad al-Agha. The Board had asked in its report for him to be brought before court. The minister of Higher Education also presented a  report which was sent to the president about the violations of the former administration of the college and requested that the former Dean, Dr. Riyad al-Agha be brought before court. Consequently, the committee recommends the council to request the executive authority to turn in Dr. Riyad al-Agha "former president of college) to the Vice-General in preparation for his submission to a court of law for conviction of being accused of misusing state money

b. al-Azhar University-Gaza:

The committee studied and reviewed the report presented by the Public Monitoring Board in regards to al-Azhar University in Gaza and also the response of the Ministry of Higher Education and the ministry's correspondence with the university. This is in addition to the many complaints which were presented to the Legislative Council in which the administration, and in particular the president of  al-Azhar University , Dr. Riyad al-Khudari, is accused of not abiding by the rules and regulations of the university or the instructions and regulations of the Ministry of Higher Education. The president was also accused of some administrative, financial and legal violations. Consequently, the committee recommends the council to request of the executive authority to form an investigative committee for the Ministry of Higher Education and the Ministry of Finance. The Public Monitoring Board will take the responsibility of making a comprehensive administrative and financial checking for al-Azhar University which also includes the projects proposed by donor countries and other Arab and Islamic sources. It also includes the money allotted to the university by the Ministry of Higher Education and by the PA president Yasser Arafat and the university's other earnings from projects, in particular the Luxembourg project, the Beit Hanoun farm, the water and soil laboratory and the nutrition laboratory. There are also the tenders in Al-Azhar University which mostly do not follow the rules and regulations of the university or of the Ministry of Higher Education. The Board calls for all those guilty of manipulation of state money to be presented to the District Attorney in preparation for trial.

The committee found that the ministry has committed many legal offenses, including:

1. The refusal to abide by the instructions of the Ministry of Finance and the Budget Law, which commits the ministry to opening a separate account for each project with the Ministry of Finance, which holds the money given by funders allocated for the project. Instead, private accounts were opened which were not under administrative and financial supervision. The last of these, in July of 1997, was a signed agreement with the Spanish government when a bank account was opened for this project, without the knowledge of the Ministry of Finance, in the names of Assistant Deputy, Anis al-Qaq, Mr. Ahmad Suboh, Director-General of the ministry, and an employee of the Spanish Consulate in Jerusalem. This followed the issuance of the General Budget Law for the fiscal year 1997 and the pledge of the Minister of Planning before the Council to abide by the law. With such incidents, (those monitoring) lose their ability to follow-up and supervise, and this provides opportunities and leeway for manipulation of state funds (to occur). It also allows for double positions, since those who work in these projects are official employees receiving a salary from the government payroll and also receive huge financial rewards from their job description in these projects, which is against the law. Also some contracts are signed with employees for these projects for a certain amount of money; they are paid less than what is written down and the difference is put in a safe called the "Black Box". This (practice) led to resignations of some former employees of the ministry. This practice caused problems which damaged the PA's reputation and credibility with funders; one example being the UNDP's evaluation report presented to the Ministry of Finance concerning the government computers project implemented by the Ministry of Planning.

2. After reviewing the report of the Public Monitoring Board, the committee found that there are numerous suspicions surrounding chief officials in the Ministry of Planning and International Cooperation, and in the Team Company and Balco Company (which is related to Team), due to many tenders being granted to these companies under circumstances which call for investigation.

Therefore, the committee recommends that the Legislative Council request the Executive Authority to form a legal and technical committee to investigate these cases, taking into consideration some of the owners of these companies are either employees in the Ministry of Planning or close relatives of Ministry employees.

3. The committee found by reviewing a number of projects executed by the Ministry of Planning, that expenditures were made without adhering to fixed budgets and that specifications of needs and tenders were based on poor technical assessments and costly purchase prices, an absence of competition and a lack of transparency which resulted in mistrust, suspicion and criticism from the donor countries and a number of other related ministries, particularly the Ministry of Finance.

4. The committee affirms the existence of a "Black Box" into which money is channeled illegally from projects, especially from special projects in public administration.. in the Ministry of Planning. This "Black Box" is directly under the control of the Minister and Director-General of the Ministry and it was hidden from the Public Monitoring Board.

5. The committee found that there has been a diversion of public funds for personal use, funds exclusively for projects which were used by the ministry in order to cash personal checks for the Minister.

Therefore the committee recommends that a special committee be formed of technical experts to review , supervise and check the opening of tenders in all ministries and organizations of the PA. The committee also recommends that the council request the Executive Authority to form an investigative committee for the Ministry of Finance, the Public Monitoring Board and the Employment Department to review, check and revise all financial records and to bring the offenders before court.

6. The committee affirms what was stated in other recommendations in the report of the Public Monitoring Board regarding the financial, administrative and legal violations of  the Ministry of Planning. Consequently, the committee recommends the council request the executive authority:

a. to review all implemented joint agreements between the Ministry of Planning and donors.

b. to open an investigation into the expenditures of project funds and other expenditures and to bring before the Attorney-General all those proved to be involved in financial, administrative and legal violations, in order for them to be tried, and in particular to investigate the Minister, Nabil Sha'ath and the Assistant Deputy Ministers Anis al-Qaq and Ali Sha'ath and the Director General of Environmental Planning, Mohammed Ajour.

After close review of the Public Monitoring Board report, the committee found that the Board did not closely examine the records of the Ministry of Civil Affairs despite the many indications which were found in the report concerning the violations committed by this ministry in particular when discussing the special reports of the Ministry of Finance or of other  ministries. The coordination manager of the Customs Exemption Department in the Ministry of Civil Affairs and the General Director of the ministry stated that the Public Monitoring Board did not examine their ministry nor were the ministry's files examined directly by the Public Monitoring Board or from any other official party. Regardless of this, there were serious parts in the Board's report related to the misuse of state money in the Customs Exemption Department which led to the PA's  loss of large amounts of money. A significant number of these exemptions were granted by way of the Ministry of Civil Affairs without the knowledge of the Ministry of Finance or the Customs Department in the Ministry of Finance. The committee reviewed and examined  this file in detail with all the official parties related to this issue, including the Ministry of Civil Affairs, it being the party responsible for coordinating these exceptions with the Israeli side in order to be allowed to cross the international borders without customs.

The Committee has founded:

First: Exemptions concerning cars and furniture:

What appears in the General Control Committee's report concerning impinging upon authorities of Ministry of Finance by Ministry of Civil Affairs through granting customs exemptions in violation to law which gave this right to Ministry of Finance. The Committee go through several files and document sin Ministry of Civil Affairs and Customs Department Ministries of Finance, Transport and Health and concluded after reviewing them to:

a. Finding several letters sent by Minister of Finance, Deputy Finance Ministry and Head of Customs Department in Finance Ministry directed to brother Minister of Civil Affairs asserting dangers of what the Ministry of Civil Administration conduct of customs fees without the permission of Ministry of Finance or even reporting to it. The Committee also asserted that this is an infringe against authorities of Ministry of Finance which is mandated for and have the right according to law and the enacted regulations.

b. Minister of Civil Affairs has not responded to repeated demands from Ministry of Finance for the need to comply to law and he continued his offenses in this regard.

c. Minister of Civil Affairs is personally  sponsoring taking decisions pertaining customs exemptions which include cars, furniture, material contributions and donations for the Palestinian territories, according to Director General of the Ministry and Director of the department for Coordinating Customs Exemptions in Ministry of Civil Affairs.

d. There are violations pertaining customs exemptions which took place in the mentioned ministry raising suspicions and aiming at reinforcing the personal authority of the minister on the expenses of public money a thing which urge for an official investigation in it.

e. The total number of governmental cars exempted of customs for the benefit of ministries, public institutions, governmental security and military apparatuses and the returnee brothers exceed 4300 cars. Many files of these imported cars which was exempted from customs have no complete appropriate documents corresponding to conditions of exemptions from the government.

The Committee would like to cite the following cases as examples:

1. Many of the exempted cars and materials belong to official parts or individuals whose files  in the ministry do not sign that that took place with their knowledge or corresponding to their demands or the concerned parts. After questioning many of  these parts, it was confirmed that they do not know anything  about that and they considered what have taken place  illegal an rejected by them.

2.  Issuing customs exemptions for cars under names of security apparatuses and used by ordinary people. In one example, a BMW was exempted and registered for Ministry of Finance.

3. Issuing exemptions for employees in the state whom conditions of exemptions do not apply and being registered under the name of a governmental part. The cars, after being imported exempted of customs were later converted to private properties. An example is the Mercedes car which belong to Coordinator Director of Customs Exemptions in Ministry of Civil Affairs.

4. Ministry of Civil Affairs did not comply to the Cabinet decision for the need to buy cars from a Palestinian mandated Agent. Rather, the Ministry offered customs exemptions for a number of cars bought from an Israeli car agents. There are many examples on this regard.

5. Some cars were imported and exempted from customs while it did not meet resolution of the cabinet that their motors' capacity should no exceed 2000cc for petrol and 2500cc for diesel.

6. Coordination took place for sending some governmental cars abroad (to Jordan) for the personal usage of some officials or their families such as Mr. Abdel Aziz Haj Ahmad, Ex Minister of Communication, Mr. Dr. As'ad Abdel Rahman, Head of Returnees Department and Mr. Jamil Al-Tarifi, Minister of Civil Affairs and others.

7. In violations to law and regulations on this regard, Ministry of Civil Affairs conducted customs exemptions for cars under the names of security apparatus members and were registered under names of other ministries in order to receive customs exemptions without the knowledge of the concerned ministries. The cars were later used by those members of others with their knowledge. The Committee has a list for those cars used by officials or members of security apparatuses and names of ministries, the cars registered under their names. The committee also has a list of the cars types.

8. There are a lot of luxuries cars such as Mercedes, Shirouki and BMW exempted of customs by Ministry of Civil Affairs for the sake of security apparatuses or their members without clarifying who is the or are the persons of the security apparatuses mandated to sign the demand. The committee noted that their were used by members of security apparatus as their special cars.

9. Mr. Minister demanded Ministry of Communication to convert possession of some cars,  registered as governmental cars, for the sake of individuals in contradiction to law. An example is the car which belong to Rasem Abdel Jawad and the other belong personally to the Minister and others.

10. The Committee would like to not that Returnees' car had been exempted through the Technical Committee which was formed by the cabinet through its previous decision issued on 19 August 1996 which conditioned the exemption decision with signatures of Ministers of Finance and Transport. Despite that, those conditions have not been respected up to this date. The conditions have not been abide by neither corresponding to qualifications or conditions of granting or using them because of interference from irregular security apparatuses, according to Minister of Transport. On the other hand, due to the apparent depression of Ministry of Civil Affairs regarding approved regulations, rules, decisions and instructions, deceiving law and the misuse of power or showing lenience regarding measures of implementing exemptions. As example, customs exemption of a Jaguar 96 luxury car under the name of the Returnee Ibrahim Awad Abdel Qader Salameh, Al-Tireh Village's Chief, who resides in Jerusalem and aged 75. The car is used by first class relatives for the Minister in contradictions to the cabinet decision. Also, there are many cars registered for the President Office which were demanded by persons working in the office. However, there are no official documents signed by a mandated part noting that the President is knowing about it.

11. Not all the exempted of customs cars were registered in files of Finance Ministry's Customs Department corresponding to regulations.
 

Second: Customs exemptions relating to Job donations and contributions

1. Ministry of Civil Affairs granted customs exemptions in some cases without the knowledge or approval of Ministry of Finance.

2. This subject is no dealt with corresponding to clear standards, bases and  instructions and special samples, a thing which open the way for importing things illegally exempted of customs. In one example, the minister exempted of custom a shipment of medicine belonging to Al-Shifa Company as a donation to Ministry  of Health. The shipment was exempted of customs and additional value tax, knowing that the signed agreements by Minister of Health and testimony of Deputy Health Ministry, before the Committee, clarified that the shipment was commercial for the sake of Al-Shifa Company, That arouses suspicions regarding presence of collusion with the company on the expenses of pubic money.

3. Files of Ministry of Civil Affairs do not sign that these demanded exempted materials by the official party and couldn't be proofed to reach the official party and the way their were handled. Due to what this subject had brought about in the past of problems regarding the presence of these materials in commercial market, the Committee recommended the Council to demand the Ministry of Finance to form an investigating committee. This is for the sake of classifying all contributions and other donations which Ministry of Civil Affairs exempted of customs and identifying the part which received it and the way they were treated and to made the officials accountable for any offenses they had commit in violation to law and order.
 

Third: Residency and work permission:

1. Ministry of Civil Affairs has interfered into authorities of Ministries of Work, Interior which are mandated corresponding to law, by issuing work permission and residencies for the influx of workers. Ministry of Civil Affairs has contented with granting working and residency permissions issued by the Israeli Civil Administration without informing the two concerned ministries about that.

2. Its is clear for the Committee after reviewing the list of the incoming workers who received working permissions through the Civil Affairs that it does agree with PA general policy regarding  the use of the influx workers.

Consequently, the file should be returned to the concerned parties represented by Ministry of Work to issue working permissions and Ministry of Interior for issuing residency permissions.

Fourth: Files of returnees names:

It is not clear for the committee while reviewing this file which is the governmental part mandated to prepare a list of names demanding national number and identifying priorities in obtaining this number. The committee see that the file should remain in the possession of PLO and restricting the role of Ministry of Civil Affairs in coordinating this file with the Israeli part.

Fifth: The role of Ministry of Civil Affairs regarding trade crossings:

It is clear for the committee that Ministry of Civil Affairs had put fees on loading trucks which transferring goods from and to Jordan without the presence of law and without coordination with Ministry of Finance. This measure was not implemented on Rafah Crossing.
The Minister has taken advantage of his personal authority when he issued  a decision signed by his private secretary addressing in it the Israeli part. The Minister's secretary demanded to reserve the border crossing for two weeks for importing cements belonging to Al-Karmel Company (Yousef Jamil Al-Tarifi) without a prior warning for importers which cause the damage of goods belonging to other importers on the borders with Jordan. This was the first step towards ending the circle of cement monopoly which was restricted later to Palestinian Company of Services run by Mr. Khaled Islam who pay an amount of two and a half millions of dollars to Mr. Yousef Jamil Al-Tarifi for every ton of imported cement. Consequently, suspicions were raised regarding the presence  of a deal which restricting importing cement through Al-Karameh Bridge in the Palestinian Company of Trading Services in exchange for the above mentioned commission  for every ton. With the knowledge that 500,000 tons of cement is expected to be imported during this year. Consequently, the Committee recommends limit import and export permits in the Ministry of Trade and Economics and restricting  collecting customs in the Ministry of Finance and the Crossings Administration by the Interior Ministry with the presence of coordinators for ministries including a coordinator for the ministry of Civil Affairs.

Sixth: File of Civil Registrar:

The Committee has noticed that the file of Civil Registrar which included several cases concerning the citizen directly, particularly concerning issuing personal documents such as ID cards, Birth Certificates and others are still suspended with  the Israeli part in contradiction to signed agreements with the Israeli part. As a result, work has been confused between Ministry of Interior, Ministry of Civil Affairs and Ministry of Planning and International Cooperation. Also, the taller hand in many cases was kept with the Israeli part such as changing the place of residence, typing the personal ID, changing the social situation, adding new borns, finishing application  of family reunification and others which affected negatively the residents and completing their applications due to disputes between PNA and Israel over the imposed fees and stamps. Henceforth, the Committee recommended with the necessity to transfer this file to PNA  as soon as possible and not keeping it in the hands of the Israelis and ending the situation of authorities conflicts between the various ministries of the PNA.

Seventh: Extravagance and wasting public money:

Through its visits to Ramallah headquarters of the ministry, the Committee noticed that there is a unjustified waste of money while furnishing the ministry which does not concede with the humble PNA financial abilities. That cannot be justified by maintaining that the imported furniture was exempted of customs fees due a decision issued by Minister of Civil Affairs.
As a result of all what have been mentioned of blatant offenses committed by Ministry of Civil Affairs in violation to law, regulations and instructions, the committee recommends with the following:

* Holding full responsibilities on Minister of Civil Affairs for all of the above mentioned offenses which form a blatant attack on public money, which urge for official investigation with the Minister and presenting all the cases which raise suspicions to General Attorney and punishing who is convicted corresponding to law. The Committee has concluded to the presence of some suspicions related to tricking law, misuse of power and disrespecting approved laws, regulations and instructions.

A. The case of confiscating supplies distributed by UNRWA:

After reviewing the report of Head of the General Control Committee and the response of Ministry of Supplies regarding confiscating supplies distributed by UNRWA among Palestinian Refugees on allegation that it have been sold in markets by some merchants, the Committee sees that the way in which the case was treated to be full of disrespect and misconduct particularly that the  supplied food has an expiring date, a thing which urge for the rush in making decisions in this regard. The Committee also sees that the both the former Attorney General and Director of Financial Department of the Security Forces and Police bear full responsibility and the delay in implementing the court decision which was issued on 13 April 1997 up to 29 May 1997 knowing that the supplies have been confiscated on 21 July 1997. Consequently, food was expired causing big loses to its owners who have not been compensated.

In this regard, the Committee recommended your council to demand the Executive Authority to compensate owners of these goods for the loses they suffer of and to hold both the ex-Attorney General and Director of Financial Department in Security Force and Police full responsibilities.
 

B. Department of weigning, standards and measurement:

 The Committee has noticed that  Ministry of Trade bares full responsibility for the non implementation of the President decision to transfer this department with all of its employees to Ministry of Supplies (formerly Supplies Department) and delaying that from 12 December 1995 to 10 March 1997. The delay has consequently interrupted work in monitoring weighs, measures and petrol stations and gold wares through out that period.
 

C. The case of expired flour

After reviewing the file of this case, the Committee has concluded that Ministry of Supplies continue to interfere in distributing flour and selling it in violations to the PLC decision on this issue. The Ministry sold it in cooperation with persons of high official rank in Ministry of Finance namely Deputy Assistant of Ministry of Finance, Muhammad Jaradah (Abu Usamah) using by t that public  money in importing flour through the Palestinian National Company for Economic Development which Mr. Muhammad Jaradah heads its Boar of Directors and Al-Dirawi Company. The Ministry also interfered in blocking the crossings in front of importing this substance, monopolizing by that the local market for the sake of the mentioned company. Therefore, the Committee recommended your respected Council to stress resolution of the Palestinian Legislative Council No. 156/3/2 on 3 April 1997 which stipulates that the role of the Ministry of Supplies in monitoring liability of supplied substances and monitoring the presence of strategic reserves in homeland and the commitment of the Executive to refrain from interfering in the policy of the market working with principles of free market and the commitment to implement standards of regular financial bases pertaining general purchases for the PNA. The Council finds the Ministerial Council responsible for refraining from adopting any measures in this case, and it demands the Executive to adopt essential measures to halt such overtaking.

The Committee recommended your respected council to demand the Executive Authority  to establish an investigating committee for investigating Deputy Assistant of Finance Ministry, Muhammad Jaradah (Abu Usamah)  and Mr. Director General of Trade and Commerce Ministry, Nasser As-Sarraj for the presence of suspicions of misuse of power and public money and blocking the crossings in front the merchants to import flour in mysterious circumstances while permitting Al-Dirawi Company to import without restrictions.

The Committee have noticed due to its finding that :

1. The Ministry lacks for a clear policy and a fixed system clarifying the way of treating governmental cars in respect of repairing and the way they should be handled, Also, there is big chaos and critical financial and administrative misconduct which urge for investigating the issue.

2. While studying files of the Ministry in Ramallah, the Committee has noted that the Ministry lacked for unified file for registering all governmental cars, particularly those used by military and security apparatuses which make the authority to loose total control in the follow up and identifying these cars, knowing that the National Authority covers costs of insurance, repairs, petrol and exempted them of licensing fees despite the fact that most of these cars are used for personal affairs only, a thing which considered as a blatant aggression against public money.

3. The Committee has noticed that some of the governmental cars was transferred to Jordan without any convincing justification and with the knowledge of the Ministry of Communication, a thing that forms a blatant violation.

4. Ministry of Communication and in violation to law, converted ownership of some governmental cars to people of authority without the prior knowledge of Ministry of Finance the concerned body for sponsoring public properties. Consequently, the Committee recommends identifying all cars bought under the name of the PNA or donated to the Authority or to any of its ministries, public associations, or its security and military apparatuses and registering them under the name of PNA, represented by Ministry of Finance and redistribute them in accordance to true needs of PNA Ministries and associations, security and military apparatuses since they are in their guardianship.

The Committee also recommended Ministry of Communication to return the cars which their ownership have been converted and those have been transferred to Jordan.

5.  The ministry did not commit to the decision of the  of the Ministerial Council in not specifying more than one car for the use of any official of the PNA. Therefore, the committee recommends the Ministry of Transportation to relinquish any additional cars which were granted to officials in the PNA, which violates this decision.
6. The Ministry of Transportation did not establish a department for governmental transportation in the northern districts which led to chaos in the field of public maintenance in governmental transportation.
7. Technical inspection for licensing of vehicles is limited to one private inspection office: the Samer office for all the districts in the Gaza Strip. There is no set system for technical inspection fees in licensing offices which bred pressure on the work and exhausting of citizens in remote areas.
8. The committee did not find any justification for the ministry's delay in changing the license plates in the northern districts to Palestinian plates such as that which was implemented in the Gaza Strip districts.
9. The committee affirms the necessity of activating the special insurance fund for victims of road accidents which insurance companies do not cover, with the knowledge that there is a special charge for this which is deducted from the insurance policy issued by the insurance companies working in the PA areas.
10. The Ministry of Transportation did not take the measures to guarantee the follow-up of licensing and collecting licensing fees for cars which have been issued licenses by the Police Headquarters and other government, security and military apparatuses.
11. The committee denounces the Minister of Transportation's approval to issue licenses to some cars which do not meet the descriptions and conditions of licensing i.e. tourist cars with temporary entry which entered the PA areas under mysterious circumstances raised suspicions; regardless of his (the minister's) knowledge of this violation's seriousness, he requested of the General Director of Customs to collect the custom's fees for them as an exception to the law, in or to license them as private cars.
Therefore, the committee recommends of the council to request from the executive authority to form an official investigation committee concerning this matter with the Minister of Transportation, Mr. Ali Qawasmeh.

The committee revealed that the Monitoring Board did not conduct an active examination of this ministry and the violations which the report indicated to can be summarized in the absence of regulations and organized instructions for its financial and administrative work. Also the ministry did not commit to the special financial regulations and those regarding travel expenses and to holding account records according to financial and other accounting regulations.
The ministry reiterated in its response to the findings of the Public Monitoring report that it has dealt with the violations against it.

After reviewing the Public Monitoring Board's report which points to violations in the budget approved by the Ministry of Youth and Sports, the spending of additional amounts as a result of financial and accounting mistakes, the lack of using payment vouchers with serial numbers despite the existence of banking accounts specially for the ministry and lack of deducting the due income tax in some cases. They also found sums of money allotted for helping sports clubs were used for covering the ministry's expenses and a misuse of money  which go against the ministry's spending laws for travel expenses for some of its employees. They also withdrew money from their bank accounts and used it as if it were money from the donations and aid for renovating playgrounds safe, in order to fund the private expenses of the ministry. Consequently, the committee requested the Deputy of the Ministry of Youth and Sports, Dr. Ahmad al-Yaziji, to respond to the findings of the Public Monitoring report concerning the financial and administrative violations. However, the committee did not receive any response to this. Therefore, the committee recommends : the council to direct the blame towards the Deputy of the Ministry of Youth and Sports for his failure to respond to the committee and it stresses the necessity of both the Ministry of Finance and the Public Monitoring Board to ensure the ministry's commitment to abide by the financial and accounting laws and other regulations and instructions.

a. The committee revealed that the violations which the Public Monitoring report pointed to in this ministry resulted from the absence of regulations, charters and organized instructions for its administrative and financial work in many cases. The ministry also did not commit to the regulations, instructions and charters in other cases. In its response to the committee the ministry showed its complete cooperation with the recommendations of the Public Monitoring report and it dealt with what was found in the recommendations.

b. Some of the information indicates the smuggling of Palestinian antiquities outside the country or were given as presents to some foreign parties. Therefore the committee recommends : that the Public Monitoring Board should investigate and examine this information.

The committee sees that the Public Department of Employees bears certain authority and power in light of its present legal situation and the delay of the application of the Law of Civil Service which was approved by the Legislative Council. This gives them control in all  ministries and PA institutions, especially in relation to the organizational and functional structures and those pertaining to appointing, promotion and salaries, without there being a superior supervising party to review and examine what the department is doing in these sensitive matters.

The Public Monitoring report also mentions that the head of the Department stalled in permitting the Board to carry out a comprehensive inspection of the Department. The Board was not able to begin the inspection until the end of Dec. 1996 and did not find cooperation with the Board's inspector during the inspection. The committee requested the head of the Public Monitoring Board to present the committee with a copy of the detailed report which the Board prepared about the Department of Employees; a copy of which was sent to the President as indicated by the Board's report. The committee also requested from the head of the Department of Employees a written response concerning the findings of the head of the Public Monitoring Board, although there was no response to the repeated requests of the committee in this concern.

First: the committee recommends of  the council to request  the executive authority the following:

1. To speed up activity in the Civil Service Law which was ratified by the Legislative Council in the second reading.
2. The commitment of the Department of Employees administration to fully cooperate and answer to the requests of the Public Monitoring Board, the Ministry of Finance, the Legislative Council and its specialized committees.
Second : To form a fact finding committee from the Legislative Council to review the work of the Department of Employees and its role in employment which does not take place according to the approved standards and principles.

The committee values the special role of the Department of Statistics and its total cooperation with the committee. In reviewing what was found in the Public Monitoring Report and the response of the Bureau of Statistics concerning the violations found in the report, it was revealed to the committee that the violations were limited to the former head of the Bureau of Statistics in Gaza, Mr. Mazen Anan who was relieved of his services and who later began working in the statistics department of the Sea Company.

1. The committee affirms the necessity of the Energy Authority to abide by the General Budget Law for the fiscal year 1997 and the instructions of the Ministry of Finance in terms of the importation of all money which goes back to the Energy Authority through the projects carried out from grants and foreign aid into a private account for these projects, as part of the Treasury account in the Ministry of  Finance. This is so it may undergo supervision and reviewing by the Department of Supervision in the Ministry of Finance.

The committee also affirms the necessity for the Public Monitoring Board  and the Department of Supervision to review and check the project accounts which were carried out by the Energy Authority and how they should be handled; to ensure that it was done according to fixed budgets and precise rules and that the determination of needs and the specialization of tenders are carried out according to sound technical decisions from the special committees of technical experts who rely on the principles of clarity, transparency and competition. This applies to all other public institutions which receive loans, grants or foreign aid to carry out projects, such as: PECDAR, the Water Authority, and the Environmental Authority, the Central Bureau of Statistics, the Palestinian Geography Center in the Ministry of Transportation, the Palestinian Council for Housing, the Palestinian Council of Health, universities, municipalities and other public institutions either governmental or non-governmental.

b. In regards to the findings of the Public Monitoring report concerning the private memberships which the Energy Authority offers directly without coordination with the municipalities and presiding village councils, the committee sees the necessity of quickly establishing the Palestinian Electric Company by a law which makes it a public cooperate company in which the municipalities, village councils, the Energy Authority share and which the private sector would take the responsibility of generating transporting and distributing electricity without impinging upon the rights of the Jerusalem Electric Company.

a. The committee requested of the Ministry of Local Governance a written response to the findings of the Public Monitoring report which contained administrative, financial and legal violations committed by municipalities and village councils, since the ministry is considered the official party which supervises and follows up on the work and situations of these councils. The committee did not receive any response or answers to its inquiries from the ministry nor did the ministry show any cooperation with the committee concerning this matter.

b. The committee noticed that the Public Monitoring report did not carefully examine the conditions of the Ministry of Local Governance, such that the report indicated to the notes of the Board concerning a limited number of municipalities and village councils (only 30 municipalities). It overlooked important issues which the report could have treated  related to the performance of the ministry in the fields of organization and construction and to the fields of financial rights and commitments - in relation to tenders and expenses of the municipalities and village councils.

c. The Public Monitoring report does not point to general conclusions concerning the performance of the municipalities and village councils from their administrative, financial and legal aspects. Nor does it deal with their relationship with the Ministry of Local Governance or the ministry's responsibility for the violations and how to follow up on them according to the law , charters and other regulations.

d. The Board's report points to a number of financial violations which call for an official investigation and court hearing. The head of the Monitoring Board questions in his report about the fate of these matters which the Ministry of Local Governance was supposed to follow up and bring forth some of these matters in light of the given information to the Deputy General in order for him to complete the necessary measures according to law. This is especially necessary because some of the violations concern embezzlement of money and administrative corruption.

e. The committee points out that some of the municipalities did not abide by the instructions of the Ministry of Local Governance which is against the law. For example, the Gaza Municipality. Some committed serious violations in denying permission for  the Public Monitoring inspector to conduct an inspection such as the Nablus Municipality against which a complaint against them arrived to the Legislative Council from the General Director of the Public Monitoring Board in the West Bank concerning this matter.

f. The Public Monitoring report points to the existence of a power struggle between some village councils and the Energy Authority concerning electricity generators. It was not clear from the report if the ministry is responsible for dealing with this matter since it is the official ministerial party in charge of supervising the municipality and village councils.

g. The Ministry of Local Governance did not receive the their share of tenders for fuel allotted for municipalities and village councils according to the law.

Therefore, the committee recommends of  the council to request from the executive authority:

1. To direct the blame to the Minister of Local Governance for not cooperating with the committee and the ministry's obvious shortcomings in performing their duties according to law.

2. The request to the Public Monitoring Board and to the Department of Supervision in the Ministry of Finance to review and check the tenders and expenses of the Ministry of Local Governance and all municipal and village councils, to ensure that they abide by the financial and accounting regulations. Also to determine the financial, administrative and legal violations and their perpetrators.

3. To form an official investigation committee concerning the violations found and to bring those convicted before court.

Report of Head of the General Control Committee signed concerning the Palestinian Monetary Authority and after the two phase inspection conducted by Monitoring Committee on the Monetary Authority (the first phase covers till the end of 30 June 1996), the Committee has reached to the following conclusions:

* The presence of unnecessary excess of expenses such as rent, salaries and cost of travel.
* Monetary Authority do not commit to the enacted financial charters.
* A presence of defect in financial files which are not identical to what is registered in daily books.

 For the second phase on 16 October 1996 which aimed at finishing the consecutive report on Monetary Authority and identifying its financial position. The report confirms the continuation of the previous offenses.

Report of Head of the General Control Committee did not stop before many offenses and range of personal responsibilities despite that the report of the sponsoring committee on the Monetary Authority signs directly to a number of offenses related to misuse of public money and administration by Head of the Monetary Authority Dr. Fuad Bseiso and demanded him to return the money spent without a need. Also, it is not clear for the committee the which the General Control Committee has pursued such offenses and implementing recommendation of the sponsoring committee knowing that Head of the General Control Committee is himself Secretary of the Sponsoring Committee on Monetary Authority.

Consequently, the committee the creation of an official investigating committee in the mentioned administrative, financial and legal offenses in reports of the General Control Committee and the Sponsoring Committee and bringing before trial whom are proved to be convicted.

The Committee finds through report of Head of the General Control Committee that any of the concerned monitoring parties have not conduct any monitoring measures or financial and administrative inspections on the General Control Committee. The Committee has noted the following:

a. There is a dispersion of efforts exerted by TV and Radio Broadcasting Agency due to the many centers of responsibilities inside the Agency and competition over specialization and authorities and the contest over influence. Consequently, a way was open in  front of internal  disputes and random administration and the misuse of influence for personal benefits and the absence of the principal of observation, inquiry and accountability.

b. Measure of purchases and tenders in the Agency are not a subject of financial and administrative observation and do not conducted corresponding to correct accounting standards which open the way for misusing public money.

c. Other contributions which received to TV and Radio Agency, listed in files of customs exemptions in Ministry of Civil Administration have not been proved to the Committee that it have been dealt with corresponding to standards.

d. The Committee was assured that the Agency did not transferred the money it received whether local income or foreign donations to the general treasury violating by that financial standards, the general regulations for budget and instructions of Ministry of Finance.

Therefore, the Committee recommends the Control and Auditing Department in Ministry of Finance and the General Control Committee to conduct a general inspection in TV and Radio Broadcasting Agency, inspecting all of its files and statistics, and identifying all of its donations and financial, other interior and foreign donations which have been received by the Agency and to present a consecutive report on those responsible for those offenses and bringing them before court corresponding to law.

First: The absence of Cabinet's role in preparing rules; ratifying regulations organizing performance of ministries, public associations; clear identifying of authorities, responsibilities and missions for each; the absence of a framework for the cabinet, have all directly guided to the continuous conflicts, interference and the frequent authorities between ministries and the various public associations without justifications. They also augment employing apparatus and maintain the situation of haphazard in organic apparatuses for all ministries and public associations of the PNA. In addition,  they lead to ambiguous performance and absenting the principal of inquiry in bases of specializing expenses. All of that lead to administrative and financial corruption and abuse of authority and public money by some officials.

Therefore, The Committee stresses on the need for the PA Cabinet to overcome this stage in order to perform the assigned duties and to provide the qualified cadres to run this comprehensive process immediately; in addition to reviewing all jobs and recruitment in higher leadership positions in all PNA ministries and institutions.

The Committee recommends to your respectful Council to request from the Executive Authority the following :

1- To develop the General Budget Department and the Monitoring and Auditing Department in the Finance Ministry; to provide the qualified cadres and technical expertise to enable a proper follow-up on the particular budgets of each ministry and public institution in a way that secures internal monitoring and prompt intervention to stop any violations or practices that contradict with the General Budget Law.

2- To form a new department to be responsible for preparing executive regulations and laws pertaining to united criteria and principles in preparing budgets and spending mechanisms, in addition to defining responsibilities, jurisdictions and the authorized parties to implement such regulations in each ministry and public institution.

3- The need to conclude the financial legislature that can contribute to the unity and general administration of the PA's financial fields. The Committee requests from the Executive Authority to conclude the following financial legislature :

-The Law to organize the general budget and finance.
- The General Supplies Law.
- The Increments Law.
- The Salaries and Insurance Law.
- The Customs Law.
- The Internal Monitoring Law.
- The Job hierarchy system.
- The Lands and Landscaping Law.
- The Law of Civil Service
- The Financial Law
- The Law of Transportation and Travel
- The Law of Government Works
- The Income Tax Law
- The Law of Free Areas
- The Law of Investment Encouragement
- Instructions of Internal Supervision and Examination
- The Law of Personal Accounts

4. The necessity of concentrating on administrative reform by putting administrative regulations and building modern technological equipment in this field and by providing opportunities for training and rehabilitation. Also to put a limit to unnecessary and unstandard appointments.
5. To work towards achieving the Palestinian rights from the Israeli side, especially those related to workers compensations, social security and the tenders which particularly come directly from the Israeli side.
6. To work towards unifying the PNA accounts in the Treasury account so that all tenders of any type (including the money received from grants, aids and loans which are exclusively for the PA expenses no matter what the nature, according to law), may be placed in it.
7. The request to the Ministry of Health to conduct official and technical investigations in many of the job-related violations which are committed by a number of doctors and  employees in the Ministry of Health against the patients as a result of negligence or money-earning. Also regarding using the Health Services institutions for personal reasons and sending the patients to private clinics, which is against the morals of the profession. This is to the knowledge that many of the complaints from the people which were sent to the Legislative Council and of which a copy was sent to the Ministry of Health indicate that there are a number of violations which led to permanent handicaps, paralysis or death. The Ministry of Health did not take the appropriate punitive measures against the perpetrators of these violations.
8. To abide by the presidential decision concerning the misuse of  government cars which dictates that these cars should be registered by the Ministry of Transportation and their use supervised. Also to abide by the recommendations of the committee (the Ministry of Finance, the Ministry of Transportation and the Public Monitoring Board) found in the Public Monitoring Board report on pages 23-24.
9. The prohibition of any PNA employee to participate in the establishment of or becoming a member in the council of any  current company administration or to undertake any  suspicious business  or other deals of any kind which would lead to or give the impression of the existence of conflict of interest or misuse of power.
10. To commit all leaders in higher positions in the executive and  legal authority and heads of the security apparatus to submit a financial report to be presented to the high court, in accordance with the principle of transparency and clarity and financial dignity.
11. To issue the necessary instructions to the responsible positions in the PNA so as to submit a financial warranty from all employees in the field of state money to ensure the correct financial administration and its maintenance.

Second: Despite the fact that the Public Monitoring report pointed to more than one place and institution where there is an overlapping and struggle over authority resulting from the  exaggeration in job descriptions, random appointment in the high  and decision-making positions, an increase in power holding positions ( a number of recommendations were presented concerning this phenomena), unfortunately these phenomenon  and the problems they entail were not dealt with or targeted. So, the committee affirms the seriousness of the continuation of this situation and its negative ramifications on the general performance of the ministries and the PA institutions from all their administrative, financial and legal aspects. The committee recommends of the council to request the executive authority to halt all appointments in high places until the approval of the organizational structure by the Ministerial Council and the application of the Civil Services Law which was approved by the Legislative Council in the second reading. This is in order to put an end to the chaos in the organizational structure and the random appointments and also to the phenomenon of appointing relatives of people in high positions to decision-making positions and to the obvious bias of many of the ministers and officials in the ministries and PA institutions in appointing their relatives and friends in these institutions. They, in turn, carry out the supervision and administration of these institutions  which led to the cancellation of the principle of equal opportunities.

Third: The committee was not  clear from studying the Public Monitoring report, if the Deputy General had any part in the investigation concerning any violations which were found in the report. This led to the absence of the principle of inquiry which resulted in the indifference of the people responsible to what the actions and report of the Public Monitoring Board. This nonchalance of the intended people was interpreted by taking reforming and deterrent measures. As a result of this, many recommendations were made to the committee in more than one place in the report to form an official investigation committee to be brought before the Deputy General, ensuring the insistence that the Deputy General does his part in inquiring and presenting the convicted persons before a court of law.

Fourth: The Public Monitoring report points to the general principles  which controls the Board's work, to the principle of non-intervention from the Public Monitoring Board in the affairs of the government, security and military apparatuses and its supervision and inspection. The committee affirms in this regard the necessity of the Board to carry out its duty in supervision and inspection of the government, security and military apparatuses and to ensure the soundness of their financial, legal and administrative performance, since their budget is part of the General Budget of the PNA.

The Committee sees that there is a big defect in performance of the military and security apparatuses. That was clear through documents and financial reports which was provided for the committee regarding many applications between those apparatuses and many ministries, public associations as it appeared in report of Head of the General Control Committee. It recommended brother President Yasser Arafat to put an end for meddling by the security apparatuses in affairs unauthorized to in additional to illegal practices of some of their officials and individuals and to halt the situation of competition to enhance individual influence for their officials and the contest of authorities between them to bring offenders before trial.

In conclusion and as a result of what have mentioned, the Committee recommended your respected council to demand Head of PNA to dissolve the ministerial council  and to form another new council of Technocrat and experts. Also, to assert the non return of any of the convicted ministers or those who did not perform well or might had shortcomings relating to their duties. Moreover, to fully authorize the new cabinet to conduct consecutive administrative and structural reformations and to follow up the implementation of what is appeared in this report of special and general recommendations. Also, to separate between meetings of the cabinet and the Palestinian leadership so that the cabinet will conduct its responsibilities and duties fallen on their shoulders in building the state of institutions, the rule of law and establishing the civil society. The Committee also confirmed that brother  President Abu Amar should issue his instructions to immediately bring before court those who are convicted in order to restore bridges of confidence between the leadership and the people and to reinforce the internal font corresponding to national higher interest.
 

Committee Members

 Budget and Financial Affairs Committee

1. Sa'di Al-Karnaz
2. Yousef Abu Safieh
3. Azmi Al-Shuaybi
4. Fakhri Shaqoura
5. Hikmat Zeid

General Control Committee

1. KAMAL Al-Shrafi
2. Hassan Khreisheh
3. Hatem Abdel Qader
4. Jamal Shati