Highlights of Bahrainís National Audit Office Report for 2016-2017
2018-03-09 - 9:50 p
Bahrain Mirror: Bahrain's National Audit Office issued a report for the years 2016-2017 at the end of December 2017, listing a number of violations committed by various Bahraini state bodies and agencies, from the Electricity and Water Authority to Labour and Health Ministries.
Electricity and Water Authority Violations
The report recorded many violations committed by the Electricity and Water Authority, highlighting that the Authority exceeded the approved ceilings for the number of overtime hours, despite the fact that these ceilings are raised annually for a large number of employees on an exceptional basis, in addition to not committing to the internally approved ceilings for administrative positions.
The report said that the number of overtime hours that exceeded the legally approved ceiling amounted to more than 126,000 hours, i.e. exceeding a total sum of 698,000 Bahraini dinars, which does not reflect a persistence by the Authority to control and rationalize overtime work expenses. The report noted that the Authority paid overtime compensation in a sustained and monthly manner to 47% of its employees.
It also recorded several other violations committed by the Electricity and Water Authority, including the issuance of decisions paying financial compensation for work injuries suffered by its employees, amounting to 456,000 dinars, although compensation for work injuries is the responsibility of the General Organization for Social Insurance.
The report noted that the Minister of Electricity and Water adopted a number of decisions based on the recommendations of the administrative body, despite the fact that it violates some laws and does not comply with the regulations in force. He adopted a number of decisions whereby compensation was paid to a number of employees for work injuries, although their insurance, pursuant to the provisions of Chapter 9 of "Work Injuries Insurance" of Law No. 13 of 1975 on the organization of pension and retirement benefits for government employees, covers the injuries, which means that the material compensation and treatment costs are covered by the General Organization for Social Insurance.
Financial Losses: General Organization for Social Insurance and Gulf Aviation Academy
The NAO report confirmed that there is a decline in the percentage of the financial revenues of properties owned by the General Organization for Social Insurance, ranging from 1.1% to 2.7% during the period between 2012 and 2016.
The report pointed out that the low rates of return from the real estates of the Organization due to the fact that the Amlak company- the body responsible for managing the properties of the insurance organization- failed to use 19 estates with a market value of 289 million dinars, despite the fact that 3 years had passed since the company started its activity with the Organization.
Regarding the Gulf Aviation Academy, the report said that the accumulated losses of the Academy amounted to 9 million dinars from 2009 to 2016, although Mumtalakat Holding Company expected the academy to achieve a profit of 17 million dinars.
The outstanding loans amounted to 15 million BD, which resulted in covering a total interest of 7.6 million BD. The number of employees of the Academy increased over the course of 3 years, amounting to 68 employees at a cost of 2 million BD, a number which was later reduced to 44 employees. Therefore, the average employee expenses decreased to 1.3 million BD.
Bahrain Airport Company's Lack of Contracts
As for the Bahrain Airport Company, the report pointed out that the company did not amend its statute to reflect the actual status of the company's paid capital. The report said that Bahrain Airport Company has many shortcomings in the operation of the ground support services system, which provides the aircraft with electricity, cooling and water drainage used by the aircraft through installed ground devices, and according to the company's records, this amounted to about 21 million dinars.
The report highlighted the absence of contracts signed with Gulf Air for the use of several facilities at the airport, which does not help to determine the responsibilities and rights of the contracting parties. The company also designed the aircraft maintenance yard in accordance with the needs of Gulf Air, which reached 3 million dinars in cost, without any concluded agreement. Gulf Air has stopped as well paying anything to the company since 2016, including the sums related to rent and landing fees, amounting to 1.9 million dinars.
Ministries of Justice and Health: Unlawful Payments and Arrears
The NAO report noted that the Ministry of Justice, Islamic Affairs and Endowments paid amounts to contractors amounting to 80,000 dinars "unlawfully", since the Ministry did not comply with some of the tender requirements related to the cost of materials classified under the initial costs term, in addition to paying the costs of a number of materials and works in sums exceeding the actual cost.
It further stated that the Ministry of Health delayed taking the necessary legal procedures in coordination with the concerned authorities against companies who failed to pay due primary health care fees, which amounted to 13 million dinars up to July 2016. The report also said that some of these payment backlogs account for a period of seven years.
In its response, the Ministry of Health explained that it had taken the necessary measures to demand the owed sums reducing indebtedness by submitting a letter to the legal affairs commission to take the necessary legal action against 627 companies.
Due Traffic Violation Fines
It was also stated in the report that there are some shortcomings in the follow-up, settlement and collection of fines for minor traffic violations, which can be reconciled, which contributed to their accumulation, as the total due fines for these violations amounted to about 9 million dinars of approximately 239 violations.
The report pointed out that there are around 69,000 traffic accidents that remain unresolved, and the total amount of due fines is about one million dinars, a matter that may lead to the cancellation of owned payments three years after the date of committing the violation.
It added that there are some shortcomings in the follow-up of the renewal and imposition of penalty fees on the delayed registration of vehicles and driving licenses, as the number of vehicles with expired registration reached about 170,000, and the number of expired driver's licenses reached about 81,000 in November 2016.
Delayed Inheritances: 45% Passed 10-Year Mark
The report noted a weakness in the procedures carried out in the handover inheritances, whose beneficiaries all reached the legal age, which led to their accumulation until they amounted to 3670 inheritances, representing 57% as a total It further said that the inheritances include 27,463 accounts with a total of 3.3 million dinars, 45% of which have crossed the 10-year mark since all parties reached the legal age.
The NAO report pointed out that the weakness in the handover of inheritance is due to the failure of the administration of minors' funds to enumerate the inheritances whose beneficiaries reached the legal age regularly, as well as address the inheritors with written letters informing them to show up and receive their shares and then deposit the shares of those who fail to attend in the treasury of the competent court six months after they have received the letter.
Unimplemented Recommendations: Sunni and Jaafari Endowments Directorates
The report highlighted as well that the Sunni Endowments Directorate and the Department of Minors Affairs did not implement many of the recommendations that were issued against them, despite the fact that 12 years have passed since these observations and recommendations were issued.
It also said that despite the assurances announced by the two sides regarding the implementation of the recommendations in their responses to the observations, they did not take the necessary measures to implement the recommendations of the Office, which led to the continuation of weaknesses and shortcomings in the performance of the two departments.
The report mentioned that the Sunni Endowments Directorate did not seek to execute two judicial rulings in their favor against the company renting the Al-Hidaya towers in Al-Houra, which ordered the evacuation of the two towers and paying up the due rent payments amounting to 594,000 dinars until December 2015.
The report stated that despite the two rulings issued against the leased company to vacate the property and pay up the due rents and although the management was informed about the company's lack of commitment in paying the rent, it signed, on December 15, 2015, a new lease for the same property over a period of 8 years starting from January 1, 2016, with a monthly rent of 23,100 dinars for the first three years and 24,255 dinars per month for the final couple of years. The sum is less than the monthly rent amount estimated by one of the real estate firms per year in 2015 that amounts to 36,700 dinars per month, so the total difference in rent for the duration of the contract amounts o t1.2 million dinars.
The report confirmed that the Jaafari Endowments Directorate did not implement the 12 recommendations raised in the previous reports. The report stressed that the Chairman of the Endowments Council continued to make unilateral decisions in leasing, exemption and privatization without referring to the Endowments Board of Directors. The report confirmed that the Chairman of the Endowments Council continued to lease some of the Endowments properties without referring to the Board, in addition to the decisions taken on the exemption of some tenants from the due rent payments without referring to the Board as well. The report further pointed out that the directorate implemented the maintenance and development project of the Sheikh Aziz Mosque at a total cost of about 476,000 dinars by dividing the work of the project into 21 agreements instead of implementing one project through a public tender.
The report pointed out that the Directorate rented a building in Al-Seef area that is a Waqf for two mosques, for a period of 5 years, starting from January 1, 2017, at 417 dinars per month, considering that the amount is small compared to the location of the building and its size of four floors and parking lot, as it only amounts to 1% of the rent paid by the previous tenant which was 16,482 per month.
Ministry of Municipalities
According to the NAO report, the Ministry of Municipalities and Urban Planning Affairs signed projects worth 6.8 million dinars without getting the approval of the Ministry of Finance and reserving amounts from the approved budgets. The report pointed out that the Ministry only obtains written confirmation from the Ministry of Finance for providing the necessary funds to cover the estimated cost of the project tenders before their proposal, and then established them and signs the contracts with the suppliers and contractors before reserving their costs from the allocated budgets.
The National Audit Office also confirmed that this practice violates the requirements listed in the unified financial manual issued by the Ministry of Finance, which does not allow taking on commitments except after obtaining approval for the conclusion of contracts and the reservation of funds from the budget.
The report stressed that there is a lack of commitment by the Amlak company in collecting the due rent payments for the General Authority for Social Insurance, noting that the outstanding rent balance has increased from 1.83 million dinars to 2.19 million, i.e. an increase of 20%.
It further stated that arrears of rents that passed the one year mark reached 65% of the total arrears.
On the review of internal control and adherence to laws and regulations, the report mentioned that four government agencies failed to implement 40 recommendations.
Mumtalakat Holding Company has failed to implement 7 previous recommendations, most notably is that the Board of Directors of the company still makes and passes investment decisions without holding actual meetings to study those investments before they are approved. It was noted that within nine months, the Board approved three investments amounting to 20.6 million dinars.
As for the municipal properties of the Ministry of Works and Municipalities, the report confirmed that the Ministry has failed to implement 8 recommendations indicating the failures in inventory the properties by the Capital's secretariat and the three municipalities, and the continued administrative violations in the conclusion of contracts as well as the violation of the law of tenders and auctions.
Meanwhile, the Ministry of Works and Municipalities had the lion's share in the failure of implementing the recommendations with 23 unimplemented recommendations. However, the Telecommunications Regulatory Authority (TRA) failed to implement two recommendations.
Lack of Annual Planning: Financial Directorate for Minors' Affairs
The report said that despite the large investments of the financial directorate for minors' affairs, amounting to 39 million dinars, 18 million of which as fixed deposits, and the remaining 21 million dinars as investments in bonds, records, public shareholding companies and investment funds. However, it was noted that there were no annual plans for those investments that identify investment directions and sectors and the amount of funds to be invested, which goes against the investment guide.
The report noted that during the past years, the number of employees whose service at the directorate ended increased by 622 employees during the period from January 2014 until September 2016, 86% of whom had their service terminated due to early retirement or administrative resignation. Despite the significance of the services provided by the directorate and the necessity for it to continue operating, it did not develop an integrated plan for the succession of posts.
The report also noted some irregularities and weak points in the granting of leaves and dealing with them. Some employees were granted leaves contrary to the Civil Service Law Regulations. A staff member was granted a paid special leave for a period of 3 years to study and obtain a PhD from the United States of America, and another staff member was granted a paid study leave for a period of 3 months.
Questionable Promotions, Raises and Leaves: House of Representatives
The report noted the administrative aspect of the Shura Council's work. The Shoura Council promoted five officials to heads of departments without presenting these promotions to the Personnel Affairs Committee for recommendation.
The Personnel Committee has also made a number of unilateral decisions on the allocation of scholarships at the expense of the Council without a decision issued by the President, for three staff members, namely the Head of the Member Affairs Department, who was given a PhD scholarship.
The report made several remarks addressing the House of Representatives, the most prominent of which is the monthly bonuses offered to members of the Council, which does not conform to the principle of justice and equality among all members.
The report said that the House of Representatives has set the salaries of some of its employees that exceed their employment degrees by up to 100%, although the list of personnel affairs of the House of Representatives stipulates that the salary of an employee is only allowed to be raised 20% by a decision made by the Speaker of the House of Representatives, also based on the recommendation of the Personnel Affairs Committee.
The report stated that the Council had introduced an employee of the month bonus of 75 dinars, without a decision issued by the Council's office. The Speaker of the House also issued some decisions regarding the assignment of a number of employees or appointment of directors and others without presenting them to the Personnel Committee for discussion and recommendation.
The report also pointed out that the House of Representatives has appointed an employee without announcing the position in the local newspapers or hiring a private employment agency, knowing that she did not undergo any personal interview or exam that other candidates had to take to apply for the post. She was employed with a salary of 600 dinars, and was signed a long-term contract with a salary of 750 dinars after only two months. The report also revealed that the Council appointed a number of employees without any examination, which does not meet the principle of employment on the basis of competence.
Finally, the NAO report stressed that there was no fairness in granting staff promotions, as the same promotion category was awarded to employees despite varying performance evaluations, while different promotions were awarded to other employees despite having similar performance evaluations, which violates the principle of justice in granting promotions.
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