Palestinian Authority Published Accounts

May 10, 2006

One of the achievements of donor countries has been to force a certain level of transparency in the financial accounts of the Palestinian Authority (PA). From January 2003 to December 2005, a monthly summary of the PA’s accounts was published by its Finance Ministry’s internet portal at www.mof.gov.ps.

A summary of these accounts is now provided by the Funding for Peace Coalition, as a resource for interested parties. All amounts are shown in thousands of US dollars.

General Notes

1.      In the PA, a wide network of quasi-governmental and non-governmental organisations, including UNRWA, perform services normally undertaken by governments. Many of these organisations are also funded by international donors. This means that the true level of international aid and public expenditure within the Palestinian Authority is not reflected in the published accounts. For example, USAID has provided over US$1.5 billion to such groups since 1993.

2.      Many of these NGOs have been accused of following a highly politicised agenda, of facilitating violence and terrorist activity, or of exacerbating and extending the conflict between the parties. There is no evidence that some of these bodies are less tainted by charges of corruption than the PA.

3.      The accounts of the PLO and the Palestine Investment Fund (which consolidates and manages PA financial and non-financial assets) are not available. Nor are the levels of reserves held by the PA itself. In the three-year period under review: $171 million was transferred to reserves; the Palestine Investment Fund transferred $173 million to the PA; PLO institutions received $55 million from the PA. Media reports would indicate that these three elements constitute vast undisclosed resources available to the PA.

4.      Many public reports, including from the PA Attorney General, indicate that the transparency of posting accounts on the internet did not prevent large sums being diverted to corruption, violence and terror.

5.      From time to time, significant retroactive adjustments have been made to the accounts as previously published on the internet. No attempt has been made to reconcile internal inconsistencies in the accounts as published.

6.      The PA accounts have not been updated since the election of the Hamas government in January 2006. The summary below shows the accounts as posted on 10 March, 2006.

Expenses and Foreign Aid

From May 2004, certain countries channeled their donations via the World Bank. The "adjusted" column reallocates these amounts against the donor countries, so that a total for each country can be easily located.

PA Ministry of Finance - Summary of Expenses and Foreign Aid $US 000's

 

 

Direct Aid

 

Palestinian Authority Domestic Revenues $US 000's

 

* Personal income rates in the PA range from 5% to 20%. Wages on salaries are deducted at source. The corporate income tax rate is 20%.

** VAT is imposed on all local goods and services at a rate of 17%. Certain projects supported by the PA are exempt from VAT.

*** Clearance revenues are collected by the State of Israel and transferred to Palestinian Authority by force of agreements between the parties. During the period, Israel transferred an additional $476 million, which had been withheld from prior periods.

Detailed Expenses ($US 000's)

Detailed expenses for the period are shown against the ministries charged for the expense. As responsibilities shifted during the period, there are movements between lines. Where possible, the expenditures are shown in the ministry, which had the relevant responsibility at the end of the period.