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					Investigative Report conducted as part of the training component of Arab Thought Forum Project: Laying a foundation for investigative reporting in the Palestinian printed press

NGOs Use Layoffs to Keep Financial Mismanagement and Fraud Under Wraps
by Emtiaz Mughrabi Ramallah—After serving as editor-in-chief of a magazine issued by an NGO, Adnan Dagher never expected he would join the ranks of the unemployed along with many of his female peers who were laid off without justification. One of those women, “Tahreer,” said: “These NGOs were formed for us and to serve Palestinian society, but unfortunately they abused me.” Dagher added: “If the NGO faces any financial problem, it is due to the $3,000/month salary of the director, which is considered very high as it equals the salaries of six department heads in any ministry.” Some said the reason behind the layoff was that the NGO did not want them to know the financial secrets of the organization. Dagher’s case begs the question: How do the 522 NGOs spend the millions of dollars that come into their coffers and who monitors such spending? Unjustified Layoffs “Tahreer,” who asked that her identity not be revealed, said: “I have worked in the NGO professionally and very hard as I was looking for a good place to work in. I thought that working with this NGO would relieve me from what other female workers complain about, but this quickly changed after only one month. At the beginning, it was the warmth and fake smiles that prevented me from seeing what was going on. Day after day, I started to get shocked from the pressure of work, low pay, bad treatment, and excessive spending in order to maintain the ‘prestige’ of the female director and the administrative committee, including expenditures to cover gasoline for a private car used by management.” Tahreer recounted how she was laid off: “I accompanied a foreign delegate when they visited the NGO in Jerusalem, which was one of my duties after one week at work. Then the director phoned and said: ‘Today is your last day at work.’ I could do nothing because she does not sign any contracts for more than one year. The public relations officer there does not stay in the job for more than one year so the director can ensure secrecy when dealing with international donors. One year of salary is enough for employees to keep their mouths shut. Then the employees get laid off and replaced before they know what is going on in terms of fraud and financial mismanagement.” Tahreer is not alone. In fact, many employees are laid off after uncovering fraud in some NGOs. Dagher, who was one of those employees, said: “ I applied to the NGO to fill the position of media officer after it was published in the local newspaper. I signed a renewable one-year contract with the NGO for a salary of $800 a month. After my first month, they made me sign a document stating that I got paid for two months instead of one. I was in charge of publishing a


magazine called ‘Yanabee,’ which was distributed monthly with Al-Ayam newspaper. Every year, it was common to employees to receive a warning about the end of their contracts, which were often renewed automatically. I was there for four and half years and I excelled in my duties. When I received the warning, I went on with my job until my boss came in and informed me in person of the layoff. Days after that, I received my salary in addition to severance pay. I was forced to sign a document stating that I had received all that I was entitled to and that I could not pursue any further action.” Courts and the Long Road Dagher continued: “I presented a written request to the NGO’s administrative committee for pay against this unjustified layoff per the Palestinian Labor Law as the work I was doing had not stopped when the NGO published an ad in the newspapers to recruit a journalist with the same job description, but in the form of tender. The NGO rejected my request so I went to court. It has been more than a year and a half and the case is still before court. Four of my female colleagues were laid off at the same time and another one six months ago in the same way.” Many media outlets covered financial mismanagement and fraud by the president of this legal NGO, which was uncovered by donors and presented to the courts. The news came as a shock to many. “The director of the NGO and her staff are corrupt,” said Tahreer. “When you visit them in their homes, you feel very sorry for them as they deliberately buy old furniture to show integrity. Their soft talk leads you to the conclusion that you are in the house of the best woman on earth when in fact it’s all for show.” These NGOs act judge and executioner toward their employees. “When I got laid off, I tried to get my legal rights but couldn’t,” said Tahreer. “That was because of the official documents I signed without knowing what they meant, along with other female colleagues who did the same and who went with their complaints to the official parties of concern. When our lawyers talked to the NGO, the answer was that we had willingly signed these documents. My case has been going on for a while and I’m certain I won’t be the last victim. My lawyer is still promising me that I will get my rights, but I don’t think there is any hope”. ‘Honest’ Thief? Such NGOs use various means to hide fraud, producing financial documents that on the surface appear legitimate. They usually hire accountants who are ready to become part of the “inner circle” of corruption. Most of these accountants remain in their posts indefinitely as they are the secret holders. One NGO that implements many civil society programs had the following revenues and expenditures:
Revenues and Expenditures in 2000
Revenues of 2000 Expenditures of 2000 Administrative and General Expenditures $1,218,892 $1,094,000 $111,228

Revenues and Expenditures in 2001


Revenues of 2001 Expenditures of 2001 Administrative and General Expenditures

$1,070,288 $1,234,454 $175,168

Unethical behavior also happens on the projects themselves, with managers reaping personal benefits from the activities. For example, the director of this NGO routinely takes food from a restaurant run by the organization without paying for it. Role of the PNGO Network Ranad Said, who in charge of programs at the Palestinian Non-Governmental Organizations Network (PNGO), talked about this leading association of NGOs: “Our funds were large but have declined since the establishment of the Palestinian Authority. NGO revenues in Palestine are estimated at $60 million. The latest statistics, from 2002, showed that 829 NGOs were registered in Palestine. In a meeting in August 2004, Interior Minister Hakam Bala’wi said 522 NGOs where registered. These NGOs focus on different sectors such as health, education, and human and women’s rights. All are PNGO members.” The network is taking steps to promote sound financial management within NGOs, Said said: “The current situation has had a negative impact on the ability of NGOs to achieve their expected goals and program outputs in target sectors, whether in rural or urban areas or in refugee camps. Regarding the issue of setting specific guidelines to monitor financial management, we are in the first stages of developing a financial and administrative review program for NGOs with clear systems for financial and administrative inspection. Our goal is to identify and resolve gaps and weaknesses. We also plan to create a manual capturing the best professional practices, which will assist organizations in improving their relations with the local community, the executive authority, and others.” Commenting on whether PNGO can interfere in cases of mismanagement, Said said: “PNGO is a forum of NGOs and a coordinating council that doesn’t have any form of binding relationship with the NGOs. We sometimes receive complaints from NGO employees where we intervene, but it all depends on the type of problem. We consider such problems internal matters and we don’t interfere unless it involves broad issues such as registration with the Ministry of Interior.” Lack of Monitoring Minister of Local Government Jamal Shobaki, who used to head the Economic Committee at the Prime Ministry a year ago, said many complaints against NGOs were reaching the Legislative Council. He received some of these complaints, such as failure to hold annual meetings, and pointed out that there is no one monitoring the violations: “We in the Legislative Council set the laws that lead to monitoring, but we don’t implement them as we are not an executive authority. This makes it possible for the NGOs to evade monitoring and many are not subject to it in the first place. In general, I don’t think there is any kind of monitoring of NGOs in Palestine.” Shobaki added that NGOs keep financial information secret and do not declare salaries or annual budgets. Failure to declare sources of revenue is a violation in itself, he said, adding that: “We know that salaries in NGOs range between $5,000 and $7,000.” 3

The question is: Until when will we tolerate the secrecy and violations carried out by NGOs? Until when will the climate of fear force NGO staff to remain silent as fraud and financial mismanagement continue?


Description: finance