To improve governance of both funds and maintain best resource management
Ramallah – The Civil Society Team for Enhancing Public Budget Transparency has followed up on a set of recommendation it submitted in two reports on the environment of integrity in the work of the Palestinian Employment and Social Protection Fund and Palestinian Agricultural Disaster Risk Reduction and Insurance Fund. The Team sent recommendations to the management boards of both funds, together with copies to the Prime Minister’s Office and relevant line ministries. These recommendations need to be implemented to strengthen the governance and management of these funds and to ensure best resource management.
In its letter to the Ministry of Labour, the Team recommended that the legal and regulatory frameworks of the Palestinian Employment and Social Protection Fund be finalised. Laws on other funds need to aligned with a view to bridging gaps in the current Law on the Palestinian Employment and Social Protection Fund. In particular, attention should be paid to goals, tasks, lines of responsibility within the Fund. A structural imbalance is caused by the Fund’s board of directors and executive board, which include the same members. Amendment should reflect the principles of accountability and separation of powers between the board of directors and executive board. It will provide safeguards for control over, and auditing of, the Fund’s properties and management, strengthen the Fund’s capacities, and secure needed professional expertise, including by relevant experts and consultants. The Fund’s policies and operating manuals will be developed and approved in due form. A computerised system will be built, with service standards tailored to reduce personal influences, eliminate conflicts of interest, and ensure compliance with the principle of transparency.
The Team’s recommendations further addressed the improvement of the Fund’s control over relevant projects. In addition to conflicts of interest, these projects are affected by the lack of monitoring and data processing. Interest rate caps need to be reviewed, ensuring they are fair and binding on lending institutions. Penalties will be imposed in cases of noncompliance with the Fund’s decisions.
According to the Team’s recommendations, the values of integrity in the Fund’s operations should be promoted. To this end, a code of professional conduct will be adopted and maintained by the Fund’s staff and board members. Separately from the administrative regulation, the code of professional conduct will address conflicts of interest, sensitisation of cases of corruption, whistleblowing, and acceptance of gifts. It will provide for promoting transparency by publishing information and documents on the Fund’s operations, including respective bylaws, regulations, budgets, reports, decisions, and remunerations paid to board members. It will also outline approved standards, mechanisms and procedures for receiving services delivered by the Fund.
Additionally, the Team sent recommendations to the Palestinian Agricultural Disaster Risk Reduction and Insurance Fund. The tasks and powers of the Chairman of the Fund, which are provided for by the Law by Decree No. 12 of 2013, should be amended. The Law by Decree itself also needs to be amended, ensuring that the board of directors is given supervisory responsibilities for financial and administrative operations of the Fund. The Team recommended that the Fund’s Financial and Administrative Regulation be amended because it contradicts the Law by Decree. A case in point is Article 2 of the Regulation, which vests the Chairman of the Fund with broad powers at the expense of the board, particularly in relation to concluding contracts and signing agreements. The Team also called for making a clear policy with a view to preventing conflicts of interest, which may arise in the process of approving implementation projects, compensations, or remunerations.