News
Questions over Muslim charity fund auditing
The recent withdrawal of Rs 1.5 million from the Muslim Charities Fund (MCF) to pay Customs duties on a consignment of imported dates has prompted questions about how monies in the kitty are being managed.
Upon investigation, the Sunday Times found no evidence of the MCF having been recently audited. The Auditor General’s Department said it examines the Fund’s account as a matter of practice. However, it does not pursue a full audit or release a report–as it does for other public institutions–because the law does not require these tasks to be performed for the MCF by the Government Auditor.
The Muslim Mosque and Charitable Trusts or Wakfs Act only stipulates that the accounts of the Fund shall be audited “by an auditor or by any other person approved by the Board”, and shall be accompanied by a report of the person auditing the accounts.
This loophole appears to have been fully exploited. No private sector auditor has been appointed and only some of the MCF’s finances have been disclosed to the Auditor General’s Department.
The MCF is made up of contributions from the total income of mosques, shrines, places of religious worship, trusts or wakfs (a Muslim religious or charitable foundation created by an endowed trust fund). This usually amounts to six percent of the net income of mosques and trusts as well as ten percent from shrines and till collections.
Where, then, is the money that should have accumulated in the MCF during the several decades of its existence? According to authoritative sources, the Fund held around Rs. 26 million in mid-2015. Its current account in the Bank of Ceylon had just over Rs. 10 million while its savings account in the same bank had just over Rs. 16 million–a total of Rs. 26 million.
The MCF had presented only its current account statement to the Auditor General’s Department for examination. At the end of 2015, this contained a little over Rs. 12 million and had received merely Rs. 2.6 million in contributions that year. The MCF had failed to furnish corresponding receipts or any other proof to the Department. It was, therefore, impossible to verify the “who, what, when or how” of any of the monies.
Several independent sources confirmed that the MCF’s accounts have not been properly audited for many years. The trustee of one large Colombo mosque said his organisation alone had paid Rs. 920,000 towards the MCF last year. While not all mosques or shrines are affluent enough to donate similar quantities, he expressed concern about a lack of accountability for the funds that are being gathered. Separately, there were worries that not enough money was being disbursed for charity.
The law defines the purposes for which the MCF can be used: The building, maintenance and restoration of mosques; the relief of poverty among Muslims or any section thereof; the advancement of the education of Muslims or any section thereof; the advancement of Islam generally; any other purpose beneficial to Muslims or any section thereof; and the payment of expenditure incurred in the management and administration of the Fund.
Muslim charitable trusts such as MCF and the Hajj Fund are administered by the Wakfs Board. It is currently chaired by S.M.M. Yaseen, who was private secretary to Ferial Ashraff when she was Minister of East and Rural Housing. He said that quotations have now been called to enlist a private auditor for the MCF.
Mr. Yaseen said he took over the honorary position of Chairman one year ago and that, “We are answerable to God for any red cent”. He insisted that he had not permitted the Fund to be tapped for anything but the payment of allowances to two employees (including the Secretary of the Wakfs Tribunal) during the past one year. While there were many proposals before the Board, he wanted to have an audit done first.
The Hajj Fund was recently audited by KPMG Sri Lanka, said Fahim Hashim, private secretary to Muslim Religious Affairs Minister M.H.A Haleem. He said the MCF will also be audited in the near future. “The Minister wants it to be audited during his tenure,” he explained.
Mr Hashim admitted that Rs. 1.5 million had been withdrawn from the MCF to meet demurrage charges on a consignment of dates from Saudi Arabia. “The problem was that they were not dry dates and had to be stored in a refrigerator,” he explained. “When we went to clear them, the bill came to Rs. 1.6 million.” Wakf Board Chairman Mr. Yaseen had temporarily released money from the MCF. It has now been refunded by the Treasury.
But critics said this move was arbitrary and carried out by the Chairman of the Wakfs Board and the Director of the Department of Muslim Religious and Cultural Affiars without approval by its members. They said three signatures are required to release any money from the MCF and that this regulation had been violated.
“This is misuse of the Muslim Charity Fund,” protested Reyyaz Salley, Chairman of the Islamic Solidarity Front. “This money is collected from Masjids all over Sri Lanka to be used for needy people but it’s going for different purposes. The accounts are not audited.” M.M. Mohinudeen, a Wakfs Board member, confirmed that they had not been kept informed.
And the MCF is also being dipped into for other purposes, Mr Salley alleged. Secretary to the Ministry of Muslim Religious Affairs A.S.M.S. Mahanama recently wrote to the Director of the Department of Muslim Religious Affairs asking for Rs. 59,800 to be released from the Muslim Charity Fund to meet the cost of an air ticket to Egypt.
This was for an Islamic preacher who was being flown to Cairo for an Iftar programme organised by the Ambassador of Sri Lanka in Egypt. The Secretary also asked for Rs. 6,500 to be handed over in cash for visa fees. The request was made in terms of Section 45(d) of the Act which allows for the MCF to be used for “the advancement of Islam generally”.