الرحيم الرحمن الله بسم

غزة – اإلسالمية الجامعةالتجارة كلية

المحاسبة قسم

Islamic University – Gaza

Faculty of Commerce

Department of Accounting

The extent of the application of responsibility accounting system in the Palestinian NGOs

A Graduation Project Proposal

Presented to the

Faculty of Commerce

The Islamic University of Gaza

By

Islam Jamal Kullap 120102409

Mohammed Jamal Elhabash 120102065

Supervisor's name

Dr. Salah Shbair

Date

1

17,Aug,2013

الرحمن الله بسمالرحيم

" منكم آمنوا ذين ال الله يرفعدرجات العلم أوتوا ذين "وال

2

العظيم الله صدق

{ المجادلة، 11سورة }

Dedication:

For Our Palestine…

For Our University…

For Our Teachers…

For Our Family…

We Present This Research…

3

Acknowledgment:

- First of all, we thank Allah for helping us to complete our Research.

- Our ability to accomplish this research is due to the good effort provided by our great university IUG.

- We thank very much our parents, who were granted every thing in their life for us, and also we thank them for push us to success.

- We would like to thank Mr. Salah Shubair for his advice and continuous supports.

- Also we would like to thanks our friends for their help.

- Finally, thanks for every one who contributes in any way to support us

4

List of content:

Averse of Quran…………………………………………………………………………………….2

Dedication…………………………………………………….……………………………………….3

Acknowledgment……………………………………………….………………………………….4

List of Content……………………………………….………………………………………………5

CHAPTER 1: RESEARCH PROPOSAL.

Abstract8

Introduction9

Research Problem10

Reseatch Qeustion ...................................................................................................10

Research Objectives10

Research Importance…………………………………………………………………..11

Variables of the study…………………………………………………………………..11

Research hypotheses12

Research methodology12

Related works13

CHAPTER2: The concept of responsibility accounting system and its importance and its components.

5

Introduction…………………………………………………………………………………………16

Definition ……………………………………………………………………………………….17

Importance of responsibility accounting system ………………………….19

Responsibility accounting system objective …………………………………………20

Responsibility accounting system advantages …………………………………….21

Steps involved in responsibility accounting system………………………………22

Development of measures of performance …………………………………………24

Constituents regulatory responsibility accounting system……………………25

Constituents accounting responsibility accounting system…………………28

Accounting principles responsibility ……………………………………………………29

Chapter 3:the reality of the Palestinian civil organization

The definition of NGOS and civil society …………………………………………….31

NGOS properties ………………………………………………………………………………..31

Palestinian NGOs………………………………………………………………………………..33

NGOI funding …………………………………………………………………………………… 33

NGOI contribution field ……………………………………………………………………..35

Sources and means of finding NGOs…………………………………………………..36

Funding problem ……………………………………………………………………………….36

Palestinian NGOI categorist………………………………………………………………. 38

The organization stricter in Palestinian NGOs…………………………………….38

6

The board of direction in and its function in NGOS…………………………….39

group documentary and book ………………………………………………………….. 42

Financial statements in NGOS……………………………………………………………43

Financial resources in Palestinian NGOS…………………………………………….44

CHAPTER 4: Salah Islamic Society

History and about Us ……………………………………………………………46

Salah Islamic Society aims………………………………………………………47

Sources of Donations and Grants……………………………………………..47

Section accounting system……………………………………………………..48

Test hypotheses………………………………………………………………...49

Chapter 5: RESULTS AND RECOMMENDATIONS.

Results …………………………………………………………………………………………….51

Recommendations……………………………………………………………………………52

References……………………………………………………………………………………….53

7

AbstractThe study aims at measuring application rate the responsibility accounting system in the Palestinian civil organizations in especially in Gaza Strip; in addition to measuring the constituents available in those organizations for such application such as the organizational hierarchy, official positions, strategic-budget system, incentive bonus system, accounting information system, performance-control reporting system. The study also aims at explaining application importance the responsibility accounting system in these organizations. The researcher adopted the descriptive-analytic method.

The study came up with a number of results among which the mostsignificant is that NGOs apply the responsibility accounting system normallywith a relative average of 73% and the constituents of applying thissystem are disproportionately available; the least of which is the strategic budget and incentive bonus systems and the most of which is the accountinginformation system.

Following the results, the researcher recommends the following: 1)The necessity to make NGOs' employees aware of the significance of applying the responsibility accounting system properly. 2)The necessity to apply detailed strategic budgets to each official position and not merely relying on projects funded by foreign bodies. 3) The necessity to gradually link between strategic budgets and the incentive bonus system, and to find a mechanism, and a plan to fund such a project; as well as to make costs and earnings controllable . . 4)Attempt innovating specialized posts in NGOs to satisfy the needs of the civil society with better quality and a higher number of beneficiaries.

5) Calling NGOs gradually to reject centralism and reinforcing. transparency through evaluating and controlling all official positions and their level of how

8

good they use their authority and perform the responsibilities assigned to them.

Introduction

The responsibility itself commissioned, not honor, the more human lives up in his work, the more Powers and thus increased responsibilities and workload, and this in turn needs to be oversight and evaluation level _ Administrative

performance of this individual and relate what is already planned, in order to be done must provide an accounting system Meets these administrative

purposes, namely accounting system responsibility .

Responsibility accounting system has emerged as one of the methods of management accounting as a sub-system of which the aim of providingAccounting information in operating performance reports on the work of officials in the control sections and departments, and evaluate their performance within the framework of responsibility assigned stemming from the powers granted by the senior management.

Accounting is considered an important modern tool responsibility originated in the light of the world directed towards decentralization, Where this trend came as a result of the large size enterprises and administrative structures and the diversity of its activities, making it Extremely difficult for one individual or one responsibility center to take all administrative decisions, And the direct supervision and control, so was the division of labor and responsibility centers in different sizes.

It is the premise that the application of an accounting system responsibility an important in all government institutions and service And industrial profit and non-profit, and the importance of civil society organizations and different from In terms of size and management structure, this study was to demonstrate the application of NGOs Palestinian responsibility accounting system.

9

Research Problem

where the study is a problem in the following key question:

"What is the extent of the application of responsibility accounting system in the Palestinian civil society organizations?"

Research questions

The fork to the following three questions:

1. Do you apply the Palestinian NGO responsibility accounting system? 2. Does it have the basic components necessary to implement the accounting system of responsibility in organizations Palestinian civil society?

3. Is there a difference in the application of the accounting system of responsibility between Palestinian NGOs Attributed to (the nature of the activity of these organizations, size, age, and number of employees)? What effect This difference?

Objectives of the study:The study seeks to achieve the following objectives:

1 .Statement of the concept of responsibility accounting system and its importance and its objectives as one of the modern methods of management

accounting

2 .The statement of the importance of applying the accounting system of responsibility in the Palestinian NGO

10

3 .Stand on the availability of the necessary ingredients for the application of accounting responsibility in civil society organizations Palestinian

development and performance optimization of the available resources .

4. Develop recommendations and possible solutions to overcome the obstacles for the application of responsibility in the accountingPalestinian NGOs properly.

Importance of the studyThe study highlights the importance of the following points:

1.Importance of the subject to which the liability accounting study of society and institutions.

2. Importance of applying the accounting system of responsibility in one of the most important NGOs in developmental sectors Palestinian society.

3.NGOs help departments to identify the weaknesses and obstacles that prevent Application of the accounting responsibility properly, and directed towards the best .

4. This study tracking the new trend towards writing in the application of this system in organizations and institutions Non-profit, where most of the books and studies have focused on the application in businesses Of industrial and commercial activity.

Variables of the study:

Variables of the study is divided by the problem of study to the one dependent variable and set of variables Independent are as follows:

The dependent variable:Responsibility accounting system in the Palestinian NGOs

Independent variables:1) organizational structure.2) positions of responsibility.3) system planning budgets.

11

4) an effective incentive system.5) an accounting information system developed and comprehensive.6) regulatory reporting and system performance reports.

Hypotheses:Access to previous studies that focused on the elements of an accounting system for responsibility Applied in different sectors, hypotheses were formulated in the light of the problem of the study, in order to achieve the objectives of And access to study solutions to the problem of the study, and the assumptions are:

First hypothesis:

"Palestinian civil society organizations do not apply responsibility accounting system.

The second hypothesis "Lack of the elements of the application of responsibility accounting system prevents properly applied in Palestinian NGOs. "

And subdivided by the following assumptions, which represent those ingredient:

1) The lack of a clear regulatory structure in the Palestinian NGOs.2) lack of responsibility centers in the Palestinian civil society organizations.3) failure to implement an effective incentive system in the Palestinian civil society organizations.

4) non-application of sophisticated accounting information system Palestinian civil society organizations.

MethodologyIn order to achieve the objectives of the study, the researcher used the descriptive analytical method, which is based on the studyFact or phenomenon available for study and measurement as they are without the intervention researcher at the course , but reacts

12

Them as through the collection of data and then analyzed, where he was to examine the application of an accounting system Responsibility in the Palestinian civil society organizations.

Related works:

Turned out of office during the survey of the literature and initial previous studies, the presence of multiple studies Addressed the issue of responsibility and accounting application, in the private sector, Other studies have dealt with non-governmental organizations in various aspects including those related to the subject of study Partially, where they were guided by them in the preparation of the plan, and will be guided by them in the study, The study presents a range of previous studies as follows:

1. Study (Wade, 2008) entitled "The role of regulatory reporting in the performance evaluation system in light of the application Accounting Responsibility: This study aimed to identify the role of regulatory reporting in the evaluation of the application in light of performance Accounting system responsibility. The findings of this study to several conclusions was the most important reports that regulators have an important role and the impact of Performance evaluation in large institutions of all kinds (which apply responsibility accounting system) and private institutions The private sector, as these reports prominent role in the decision-making process related to planning And monitoring and evaluating performance in different institutions, and thus reduce costs and increase the efficiency and effectiveness Foundation for doing their work, and that these reports do not have a specific form in the preparation due to the different The nature and size of the institutions and activities. .

2 study (kullap 2008) entitled "The availability of the elements of the application of responsibility in the accounting system Bank of Palestine:

13

This study aimed to identify the extent to which the elements of the application are available responsibility in the accounting system Bank Palestine limited, and the statement of the benefits of the application of this system in the Bank of Palestine, and knowing the difficulties that Encountered in the application and try to overcome them This study concluded that the possibility of applying the accounting system of responsibility in the Bank of Palestine Limited relative weight of 77%, where most of the necessary ingredients are available for the application,

3 .Study (Mohsen, 2008) titled "the extent to which nongovernmental organizations in the Gaza Strip The processing and presentation of financial statements in accordance with the requirements of International Accounting Standard : The study aimed to identify the accounting practices used in non-governmental organizations And the reality of the application of these organizations to the International Accounting Standard No. (1), and what are the positives of the application of this Standard, and cons of non-compliance, as well as to identify obstacles to the application of that standard and means to overcome Those with disabilities.

4.Study (Jadba , 2007) entitled "Measuring the possibility of applying the accounting responsibility as a tool for censorship And performance evaluation in the Palestinian government agencies: An Empirical Study. The study aimed to measure the possibility of applying the accounting system of responsibility in government agencies Palestinian, and the statement of its role as a basis for monitoring and evaluating performance, and this is what represents the main problem of the study Which is divided by five axes represent the elements of the application of an accounting system responsibility.The study concluded that the lack of all the key ingredients for the application of an accounting system Responsibility in the Palestinian government agencies, and thus cannot be applicable to the current situation.

14

Comment on Related works:

1.In the private enterprise sector and the government in general addressed the study (Wade, 2008) Accounting Responsibility from the perspective of one of its components, performance evaluation, and specifically through the study of the role of reporting Control and its importance in the Palestinian private institutions in Gaza.

2.In the joint-stock companies, specifically in the banking sector dealt with the study (kullap, 2008) and the reality The application of accounting responsibility in the Bank of Palestine in terms of the availability of the elements of the application.

3.Study (Mohsen, 2008) aimed to find out the reality of the application of International Accounting Standard No. (1) and the pros And constraints applied in civil society organizations in the Gaza Strip, this criterion is one of the important pillars of assistance In the presence of an accounting system, lists and reports appropriate for the application of financial responsibility in the accounting system that Organizations .

4.In the government sector has touched Study (Jadba , 2007) for liability accounting as a tool for censorship And evaluation of performance in the sector of the Palestinian government in Gaza, and measure the possibility of the application through the availability of ingredients Accounting responsibility.

15

Chapter Two

The concept of responsibility accounting system and its importanceAnd its components

: Introduction

Senior management is interested in any institution according to nature in an era of rapid development of systems Information and modern technology, and with the expansion of the size of the organization and its activities, with a focus towards the function Strategic planning, regulation and supervision, and sensitive tasks at the enterprise level and the surrounding environment) to reap its benefits, so resorted to decentralization system Fetishes of modern management systems, which require it the origins and development of accounting systems to meet the needs These administrative systems, including responsibility accounting system, where the system draws this administrative management attributes, And connects the individual in charge of your performance in all administrative units of the organization, leading to

control costs .

16

Definition

Responsibility accounting is a system under which managers are given decision-making authority and responsibility for each activity occurring within a specific area of the company. Under this system managers are made responsible for the activities of segments. These segments may be called departments or divisions.

1-Charles T. Horngren defines "responsibility accounting is a system of accounting that recognizes various responsibility centers throughout the organization on and reflects the plans and actions of each of these centers by assigning particular revenue and costs to the one having the pertinent responsibility. It is also called profitability accounting and activity accounting."

2-Institute of Cost and Works Accountants of India defines responsibility accounting as a system of management accounting under which accountability is established according to the responsibility delegated to various levels of management and management information and reporting system instituted to give adequate feedback in terms of the delegated responsibility. Under this system, divisions or units of an organization under a specified authority in a person are developed as responsibility centers and evaluated individually for their performance."

3-David Fanning defines responsibility accounting as a system or mechanism for controlling the wider freedom of action that executives - decision center manager in other words - are given by senior management and for holding those executives responsible for the consequences of their decisions.

4-Robert Anthony defines responsibility accounting as "that type of management accounting that collects and reports both planned and actual accounting information in terms of responsibility centers."

17

Responsibility accounting focused main attention on responsibility centers. The managers of different activity centers are responsible for controlling the costs of their centers. Information about costs incurred for different activities is supplied to the persons in charge of various centers. The performance is constantly compared to the standards set and this process is very useful in exercising cost controls. Responsibility accounting is different from cost accounting in the sense that the former lays emphasis on cost control whereas the latter lays emphasis on cost ascertainment.

The following inferences can be made from the above definitions:

(1) Responsibility accounting stresses on communication of information in general and accounting information in particular to various decisional centers.

(2) Responsibility accounting lays greater emphasis on persons (human resources management)

(3) Responsibility accounting is tailored to the organizational structure so that the process of communication of information follows principles of organization.

(4) It is an accounting system, which collects and report both planned and actual accounting data in terms of sub-units, which are recognized as responsibility centers

The importance of responsibility accounting system:

The responsibility accounting system is an important input for the development of general accounting and management accountingIn particular, it connects directly between costs and revenue on the one hand and the persons responsible Her other hand for the implementation of the regulatory processes as the best, and enable each administrative level Find out its responsibilities under the organizational structure of the organization, and evaluate the performance of individual members and see how Contribution, so are the responsibility of the accounting methods developed for management as well, where the individual is As the importance of

18

accounting responsibility stems from being part of the internal control system, which serves Planning and control over the resources available in the organization to achieve both efficiency and effectiveness in the Use, and evaluate the performance of departments in the organization to achieve its objectives.

The responsibility of the practical application of accounting method decentralization in decision-making and performance evaluation It takes control system of decentralized management direction.

Accounting responsibility objectives in the following points:

1) cares of responsibility approach accounting by creating a direct relationship between costs and revenues and people Those responsible. 2) accounting liability related to the principles and foundations of regulation and accounting systems and financial reporting costs and Administrative levels.

3) assist in the evaluation of your performance for each level of administrative levels, and to identify Distractions and take the necessary actions to achieve appropriate solutions.

4) facilitate control over the operations and performance assessment activities through a deal with responsibility accounting Report for information.5) enable various levels of management organizational structure of the organization, and the responsibility for units Supervision, control and responsibility for the elements of cost and revenue.

6) represents a method of accounting entrance responsibility for the development of modern accounting and regulatory reporting, where) Requires the development of the existing accounting system and reporting system through the process of connecting directly with the structure.

19

Responsibility accounting system properties

1) Accounting responsibility is one of the modern methods of management accounting .

2) Accounting responsibility is considered an effective tool for monitoring and evaluating performance in organizations and is part of the internal control system.

3) dependent on planning budgets.

4) associated with accounting responsibility to the organizational structure of the organization in terms of divided into centers of responsibility.

5) result in liability accounting issue reports on the performance of responsibility centers offering of senior management To take the necessary decisions.

6) To contribute to the implementation of management by objectives system, where each manager agrees to set goals Specific should be achieved.

Advantages of Responsibility Accounting

1 .It introduces sound system of control - a system of closer control.

2 .Each and every individual in the organization is assigned some responsibility and they are accountable for their work .

3 .Everybody knows what is expected of him. Nobody can shift responsibility to anybody else if something goes wrong .

4 .It is effective tool of cost control and cost reduction applied with budgetary control and standard costing .

20

5 .It facilitates the management to set realistic plans and budgets.

6 .It is not only a control device but also facilitates decentralization of decision-making .

7 .It measures the performance of individuals in an objective manner .

8 .It fosters a sense of cost-consciousness among managers and their subordinates .

9 .It helps the management to make an effective delegation of authority and required responsibility as well .

10 .Under the system of responsibility accounting, detailed information is collected about costs and revenue, on a continuous basis and the data is

helpful in planning for future costs and revenue .

Steps involved in Responsibility Accounting

Responsibility accounting is used as a control device. Following steps are necessary to effect control through the Responsibility Accounting:

(1) The organization is divided into various responsibility centers. Each responsibility center is put under the charge of a responsibility manager.

(2) The targets or budgets of each responsibility center are set in consultation with the manager of responsibility center, so that he may be able to give full information about his department. The manager of responsibility center should know as what is expected of him - each center should have a clear set of goals. The responsibility and authority of each center should be well defined.

(3) Managers are charged with the items and responsibility, over which they can exercise a significant degree of direct control.

(4) Goals defined for each area of responsibility should be attainable with efficient and effective performance.

(5) The actual performance is communicated to the managers concerned. If it falls short of the standards, the variances are conveyed to the top management. The names of persons responsible for the variances are also conveyed so that responsibility may be

21

fixed.

(6) The performance reports for each center should be prepared highlighting the variances and items requiring management's attention. The corrective measures are suggested or taken and communicated to the concerned managers of the centers.

22

Development of Measures of Performance

Because most of the responsibility centers have multiple objectives, only some of these objectives are expressed in financial terms, such as operations budgets, profit targets, or required return on investment, depending on the financial classification of the center. Other objectives which are to be achieved concurrently are non-financial in nature. For example, many companies list environmental stewardship and social responsibility as key objectives. The well-designed management control system functions alike for both financial and non-financial objectives to develop and report measures of performance.

Good performance measures will:

• relate to the goals of the organization

• balance long-term and short-term concerns

• reflect the management of key results and activities

• be affected by actions of managers and employees

• be readily understood by employees

• be used in evaluating and rewarding managers and employees

• be reasonably objective and easily measured

• be used consistently and regularly

23

Constituents regulatory responsibility accounting system:

Divided into elements of regulatory and accounting elements:

Constituents regulatory responsibility accounting system:

First : Organizational Structure:

Must provide a clear regulatory map FAO show the powers and functions of the units Various administrative that make up the organization, so as to ensure the success of responsibility accounting system in achieving Objectives, known as the administrative units of responsibility centers .

Second: Responsibility centers

Type of responsibility centers

The responsibility centers can be divided or classified in different ways, but there is near consensus on the division of responsibility centers to:

1. Cost Center.

2. Profit center.

3. Investment Center.

First - the cost centers:

The cost center circle of activity, which is responsible for it accountable (Director) for what is happening with all of the costs, in the sense that, according to the concept of cost center, the cost elements - all or some of them - within the scope of control, control and responsibility of the cost center.

24

It is the center, which is a compilation of cost elements to a particular service or activity in order to determine the cost of Products and external reporting and control of cost elements, which are subject only those elements Control and cost center manager.

Second - profit centers:

An activity center or department responsible for achieving and maximizing profits resulting from the difference between Input and output, between revenues and costs (expenses), ozone, and have it Through the Director of the Center for profitability, as this place like an independent organization within the organization . .

Third - Investment Centers:

Investment Center is a circle of activity, which is responsible for it accountable (Director) for the return on the substantial investment of their resources. Therefore, the Investment Centre is a development of the profit center, not only as performance measurement and evaluation to track costs and revenues just as in the case of a profit center. But are also tracking the capital invested in the center of responsibility. Thus, it can measure and evaluate performance better because all the elements of performance - including the capital invested lead to the development of a sense of responsibility in the different administrative levels at the facility.

Cost Centers vs. Responsibility Centers

A cost center is "a location, person or item of equipment (or group of these) for which costs may be ascertained and used for purposes of cost control." Thus, cost center is used as a means of assembling items of cost, so that they can be assigned to goods and services. In the case of cost center, emphasis is more on products, jobs or processes whose costs are to be ascertained. Thus, here the emphasis is not on the persons who may be managing a level or product or process.

25

Responsibility centers, on the other hand, are established on the basis of responsibility delegated to responsible personnel of the organization with a view to identify costs which can be controlled by each one of them. However, cost centers sometimes may be used as responsibility centers too. In that case, cost reports are prepared both cost-wise and responsibility-center-wise.

The objective of dividing the organization into positions of responsibility:

1.Achieve administrative control over the implementation of the business, and take the necessary decisions to rationalize consumption x And the rational exploitation of the working time and increase operating

efficiency.

2 .Achieve dynamism and speed in decision-making, thereby helping to avoid the causes of the defect at the time x The correct path.

2. PAS topically through the comparison between the performance indicators and actual planning, revealing x Deviations, analysis and according to causing and those responsible for them, achieving managerial accountability and accounting.

Third : The Application of system of incentives:The system of incentives in the plan under which performance-related pay in order to increase productivity sufficiently Taking into account the time spent by the individual at work and volume of production, and achieves the advantages of incentive system Many of which increase the rate of production while improving quality and reducing costs, and thus increase revenue, and increase Income of the employee and the enjoyment of the consumer at a lower price, also make management always vigilant toward production requirements or Services . .

Constituents accounting responsibility accounting system:

26

First: Tab elements of costs and revenues

Accountant may face difficulties when Tab elements to be controlled and this requires him to rely Personal wisdom, and is useful in this area rely on the standards proposed by the National Assembly For Accountants Americans that

considered the person responsible for oversight in cases.

-1 If the purchased item or use.-2 If he could conduct an impact on the amount of cost through

administrative decisions.-3 If you wish to senior management, because it can conduct an impact on the

decisions of others under Powers conferred upon him.

Second: performance evaluation and standards.

The performance appraisal process is to judge the performance and behavior of the organization personnel, and the consequent So make the right decision about that individual, either positively or negative. 

Third : Regulatory reporting (performance reports)

Represent performance reports and official means of communication between the different levels in the organizational structure, These reports include a description of the actual performance of comparative responsibility center planned and desired performance, And includes any system of feeding a series of adverse performance reports begin minimum level of regulation and ranging to be up to the upper levels of it.

Accounting principles responsibility

27

First: Units supervision and responsibility "positions of responsibility"; principles upon which the Responsibility accounting system to divide the company into units of supervision and responsibility "centers Responsibility, "and so can determine responsibility for spending and revenue, and accounting supervisor And in charge of the responsibility for causing the center costs and create revenue within the region His influence in the light of the concept of the costs under control and under the control of each level of Administrative levels to the organizational structure of economic unity.

Second: to shed light on and evaluate the actual performance in each of the center positions of responsibility and that After dividing the company into units supervision and responsibility "responsibility centers", where they are put Patterns or standards of performance in the future for each element of costs and revenues in Each of the responsibility centers, and compared to historical performance "actual" performance specified in advance "Planned " .

Third : Season of the cost components that can be controlled, which can not be controlled ;Important principles that underpin the accounting responsibility, the need to separate cost elements Which can be controlled or monitored at every level of administrative cost elements that do not Can be controlled or monitored . .

Fourth: The following principle of censorship exception when designing reports for accounting system Responsibility; censorship is a tedious process and dealing with all aspects of the activity covered by the planning, and should not be Lifa m so that the control must deal with both small and large, but must Control is based on the knowledge of all distractions, censorship should not be linked to the progress of the workflow, But the extent of the variation workflow plan.

Fifth: detailed plans on the basis of positions of responsibility, so that the desired target is determined in achieved in each of them, and performance

28

criteria to be determined by the center working out.Sixth: compilation of data on the actual performance on the basis of positions of responsibility.

Sixth: The actual performance reporting on a hierarchical basis, so that the flow from the bottom to reports Top extent appropriate detail on every level of the company.

Chapter three

29

The reality of the Palestinian civil organizations

Introduction

NGOs are a global phenomenon began to emerge after World War II in Europe East and West and the United States of America, and the growing role with the nineties of the last century for The fight against corruption in the developing and developed societies alike. Due to the importance and the role of NGOs _ Palestinian population of the study _ in community development Palestinian and development, and integration with the public and private sectors, it was necessary to

identify the reality NGOs in Palestine .

The definition of NGOs and civil society

There are several definitions:

Some NGOs knew _ confined _ on associations and clubs as private institutions (non- Governmental organizations), with independent legal personality from its members, not-for-profit, but aims to achieve The purposes of scientific, cultural or sports or social, which does not belong to one does not have the capital, It does not affect the

withdrawal of one of its members to continuity .

Define Article (2) of the Code of charities and civil bodies issued by the Palestinian National Authority (no. 1) 01/16/ 2000 associations or bodies as a "legal person Independent spirits arise under an agreement between a number of at least seven people to achieve the legitimate objectives Public interest without targeting reap financial gain to be shared between the members or to achieve Personal benefit.

.

Others define as non-governmental institutions and non-profit organization, was established by a group of People in the context of civil society, they teach for a specific purpose to serve the welfare of

30

society, albeit Return to some of their material, but directs to help finance the organization or association Primary.

Civil society

Addressed Many definitions of the concept.

Jabri define of civil society that the society in which they exercise judgment on the basis of the majority party, Which govern the relationships between individuals on the basis of democracy and respecting the minimum Citizens' rights of political, social and economic, cultural, any society in which the state Organizations in the modern sense of the organizations, the parliament, an independent

judiciary, political parties, trade unions, and associations. .

As civil society is defined as: "the set of institutions and social organizations that work Relative independence from the state to achieve the goals and objectives of a variety of political, economic and social, And involves political parties, trade unions, associations and cultural clubs, chambers of commerce Industry, occupational and professional organizations, provided that build on the concept of

citizenship, rather than Traditional affiliations

 

NGOs properties The most important characteristics of civil society organizations in

the following :

1( reflect a voluntary initiative of a group of individuals, seeking a general interest to the class of the society .

31

2 (not-for-profit, but to provide some of the services and needs, whether social, cultural, Health, development, relief and other multiple

segments of society . 3 (The organization governed by the law is autonomous .4 (In the case of dividends (within the financial resources) they are not

distributed to the Board of Directors .5 (they receive contributions and donations of cash and in-kind donors

in the non-exchange operations .6 (the absence of capital equity, known in business organizations .7( based on the concepts of efficiency, effectiveness, partnership and

participation, to be offered in the civil society .

8 (a non-governmental civil society organizations, should not be related to the structure of government, but institutional .

Palestinian NGOs - its inception and evolution . The emergence of the Palestinian civil society organizations :

The history of civil society organizations in Palestine, the oldest dates the emergence of civil society organizations in the world, Where some consider that the first phase of the efforts of civil work in Palestine emerged since 1917, and even1948, where he played an important role in resistance to Jewish immigration to Palestine, and against the confiscation of land The announcement of the British Mandate in 1922 At the beginning of the twentieth century took active processes established for NGOs where the cities Jerusalem, Nablus, Haifa, Jaffa, one of the first cities that embraced these organizations, such as Jerusalem Literary Society, And the Association of Arab workers in Haifa, and the Association of Arab Women's Union in Nablus The Palestinian NGO worked according to the Ottoman Law on Associations of 1907 m in the Gaza Strip, According to the law of charities and social bodies of Jordan for the year 1966 in the West Bank And Jerusalem, so

that the enactment of charities and local bodies2000.

Types of NGOs:

According to Willetts (2011) NGO type can be understood by orientation and level of co-operation.

32

1- NGO type by orientation

- Charitable orientation

- Service orientation

- Participatory

- Empowering orientation

2- NGO type by level of co-operation

- Community- Based Organization

- City Wide Organization

- National NGOs

-International NGOs

Apart from "NGO", often alternative terms are used as for example: independent sector, volunteer sector, civil society, grassroots organizations, transnational social movement organizations, private voluntary organizations, self-help organizations and non-state actors (NSA's).

Non-governmental organizations are a heterogeneous group. A long list of acronyms has developed around the term "NGO" these include:

- BINGO, short for Business-friendly International NGO or Big International NGO

- National NGO: A non-governmental organization that exists only in one country. This term is usually rare due to the globalization of Non-governmental organizations, which causes an NGO to exist in more than one country (Willetts, 2011).

NGOs funding:

Large NGOs may have annual budgets in the hundreds of millions or billions of dollars.

33

NGOs all over the world receive funding from different sources governmental and private. This funding could be policy-driven and is granted to dictate the goals and policies in a way or another.

The concept of funding in the civil organizationsProviding them with the necessary funds to achieve its objectivesFor which they have or what you get from a private money to achieve its goals in the areas of Welfare and Social Development.

NGOs contribution field:

NGOs in the Palestinian territories contribute to two main fields as follows:

A-Contribution to Governance and Peace building:

There is less agreement in the literature about civil society’s contribution to governance and peace building in the Palestinian Territories. Some authors maintain that civil society organizations have had a number of negative impacts on conflict in Palestine – Others argue that civil society organizations

remain highly politicized or were becoming increasingly politicized.

On the other hand, several authors present evidence that NGOs have made a positive contribution to governance in the Palestinian Territories, There are signs that Palestinian civil society is becoming better coordinated. A number of recent initiatives have helped to link NGOs from the West Bank, Gaza and the Diaspora. There is strong popular support for civil society playing a more

prominent role in politics

B-Contribution to Rural and Private Sector Development

NGOs‟ most well-documented work in the field of private sector development has been through donor-funded micro-finance initiatives. NGOs can play an effective role in rural and private sector development, but they are often

limited by poor governance and low organizational capacity.

34

Sources and means of financing NGOs *

1- Grants and contributions in cash and kin

2-Self-financing

3 -Government subsidies and customs exemptions.

4 -Volunteers

5 -Loans

Funding problems in the civil organizations *

1 - the difficulty of the diversity of funding sources .2 - Lack of specialized cadres for the development of financial resources .3 -Inadequate funding sources to cover the expenses of the association.4 - double the regular pay subscription fees .5 - the lack of seriousness of feasibility studies for investment projects .6 - lack of proficiency in dealing with donors.

*The importance of funding

1 - Money is the key element for the continuation of the work of civil society organizations,2- Is the stability of the financial position of the Organization of the most important factors to help highThe level of services, and the development of existing services according to

35

increase its financial position3- Funds are used for the purposes of multiple things, including the establishment of facilities and pay Wages for workers and buy raw materials necessary.

Palestinian NGOs - population and classifications

Difficult to obtain accurate figures for the number of organizations, there are differences appear in the census organizationsPalestinian civil society, for several reasons, including1 - action allowed by the statistics of various research institutions, occurs in different years .2 - at the time of the registration of a new civil organizations, there are organizations resolved itself, it Which makes the census process is inaccurate.

3 - with a few small NGOs or arising from the recording itself and the small size of x Activity, or they did not meet the necessary conditions.

Census Palestinian civil society organizations in the Gaza Strip in 2009 _ the study population _ and according to a source circleAssociations Directorate of Public Affairs at the Ministry of Interior has ended to 887, including 851 OrganizationPalestinian civil and the rest international,

Conservative numberGaza Governorate 417North province 144Khan Younis governorate 136Central province 104Rafah 86Total 88

36

Palestinian NGO Categories

Palestinian NGOs classification by sector to which it belongs to (19) _ by source sector The Ministry of the Interior _ as in the following tabl

Palestinian NGOs rating by activity (business segment) sector number

1 associations Brothers 5 2 family and clan associations 17

3 social associations 4254 associations motherhood and childhood 42

5 human rights groups 5 6 higher education associations 147 of agricultural associations 42

8 alumni associations 89 associations friendship 310 trade union associations 3511 medical associations 3012 environment Societies 1413 foreign associations 3614 youth and sports associations 5815 education associations 1316 Societies disabled 3419 associations of Tourism and Antiquities 2 18 Culture and Arts 7219 Islamic associations 32

Total 88

Palestinian NGOs _ the organizational structure and the Statute

The organizational structure of the Palestinian civil society organizations and their boards of directors

The organizational structure of the Palestinian civil society organizations is an important element in the study of the extent of the application Responsibility

in the accounting system of such organization .

37

And organizational structures can be classified for NGOsPalestinian _ on different sectors and objectives _ to the three models are:

The first model, a toddler and is the organizational structures contain a General Assembly and the Council of Management and according to the law of

charities and local bodies Palestinian .

The second model in the organizational structures contain in addition to the Board of Trustees of the General Assembly, And some of the results show that only 12.7% of organizations have a Board of Trustees.

The third model is the organizational structures that contain administrative body means operational matters Of the organization, as well as the Assembly,

where 94.2% of organizations have bodies .

The Board of Directors and its functions in the Palestinian NGOs

The definition of the Board of DirectorsAssembly, which will be responsible for all activities and its "do not increase the number of Board members Thirteen members, and it is not permissible to join two or more linked by kinship First Class And the second to the Board of Directors.

Terms of reference of the Board of Directors

1 - Department of Public association or organization and preparation of rules and regulations and the necessary instructions.

2 - appointment of the staff association or organization and determine their jurisdiction or terminate their services in accordance with the provisions of the law.

3 - Configure the committees that it deems necessary to improve the work and determine the jurisdiction of each of them.

4 - the preparation of the final accounts for the financial year ended and the

38

budget projects for the new year.5 - Provide annual reports, financial and administrative any future plans and

projects of the General Assembly.6 - Assembly's call for a regular session or unusual for the meeting and the

implementation of its decisions in accordance with the law.7 - Follow-up to the most important observations received from the

department or the ministry or the competent official authorities

Five functions of the boards of directors in NGOs Palestinian

1 - Determine the mission and objectives of the organization clearly.2 - Effective planning which translates those goals.3 - provision of financial resources and human resources and management.4 - Selection of the Board of Directors to the Executive Director, support and evaluate its performance.5 - ensure compliance responsibilities in the light of the legal and ethical rules.

Statute of the Palestinian civil society organizations

1 )the purpose of incorporation 2 )Assembly 8) bylaws proposed by the Council

3 )Board of Directors 4 )Fiscal year

5 )Appointment of auditor6 )membership system, conditions and rights and duties of members

7 )Filter organization

39

9) the financial resources of the organization and its uses

Palestinian NGOs _ its accounting system and financial statements*

The accounting system of the Palestinian NGO.

The beneficiaries of the accounting information for NGOs:They include external and internal users,

external users are shareholders , researchers and the public and donors .

users of internal are management men and volunteersAnd directors of civil society organizations, and the supervisory authorities.

Accounting goals in NGOs therefore1) provide the information necessary for the preparation of the final accounts.2) assist management to take the appropriate decisions by providing full information and data.3) to provide the necessary information to take advantage of them by the state or power.4) assist management control over the funds of the organization.5) To provide information for management control of the organization.

Group documentary and Book in the accounting system for NGOs

Group documentary:The organization print the necessary set of documents bearing the name and bear the serial number, the most important

1 - captured documents.2 - vouchers.

3 - other documents necessary.

40

Book Group:The total amount is divided civil organizations to two important groups of records Statistical (graphs), and accounting records, as follows

(A )records charts (statistical):It records that helps an organization to obtain the necessary data and statistics And organization, where these records legal records can refer to the contents when control And are:

1 )Record the membership (or members).2 )Record the minutes of meetings of Directors.

3 )Record the minutes of the meetings of the General Assembly.4 )Record incoming and outgoing identify where incoming and outgoing

correspondence and saved.5 )Record the membership fee for annual subscriptions.

(B )the accounting records:These records are consistent (notebooks) with the size and nature of the organization's activity, and the most important:

1 )analytical cash book: it is recognized what is taking possession of what is paid and consists of two receipts And payments.

2 )the petty cash book: all being recorded relatively small petty cash, and are Under this record caught his predecessor incidentals from before the members of the Assembly.

3 )General Journal: This record is devoted to prove the central operations, such as opening entries, under Locks, inventory adjustments restrictions.

4 )General Ledger: This record is devoted to migrate accounts from the central reality of the constraints that have been Recorded in the daily public for the purpose of compliance with daily, extracting the trial balance.

5 )ledger Stores: This record may be used if one of the organization's activities for the sale of some of the Materials and tools from the store

Financial statements of the Palestinian civil society organizations:The NGOs prepare final accounts and the balance sheet at the end of the year like the rest of Economic projects, the following accounts are prepared:

41

1 )receipts and payments account .2 )the income and expenditure account .3 )calculate the surplus of the year .4 )the balance sheet .5 )the statement of cash flows .

Palestinian NGOs, accountability and transparency

Accountability and civil society organizations

The accountability of the managers commitment to provide adequate reports to justify the above decisions that they have taken on Exploitation of resources of the organization so that they can fulfill their responsibilities to all be liquid in the light of what the law requires And custom and the prevailing system.

Transparency and civil society organizations

Definition of transparency As "the provision of reliable and timely information on activities and procedures, decisions and policies, And to ensure that beneficiaries and the public and the relevant official bodies and donor information Transparency is a fundamental principle of a comprehensive and

sound is the basis of the relationship between the state and civil society .

Palestinian NGOs and the principles of the Code of Conduct its:Twelve principle of a

1 )compliance with covenants and laws. 7) equality and inclusiveness2 )development priorities 8) Governance

3 )Participation 9) to prevent conflicts of interest4 )networking and coordination 10) impact and effectiveness

5 )Transparency 11) the integrity of the institution6 )Accountability 12) to resolve differences

42

Palestinian NGOs and money management

The regularity of the flow of money and good exploitation and distribution is very necessary for the survival of the organization and its success in achieving its objectives.

The financial resources of Palestinian civil society organizations and their uses

Sources of funds (revenues)1 )Membership fees for enrollment (enrollment): It is the amount of money

paid by the member when joining the organization.2 )annual subscriptions: a sum of money paid by the user for the use of the

services provided byOrganization and pay at the beginning of or during the year.

3 )Donations: may be in cash and are deposited in the bank's current account, or the form of donationsKind and add both to the assets of the organization.

4 )Income other activities carried out by the organization: such as a restaurant for rental, or concerts, orTraining sessions, or any other activity.

Uses of funds (Expenses)Uses of funds of the organization is divided into two parts:1) Capital expenditure:It is those expenses spent by the organization in order to obtain fixed assets, or guaranteesCapital increases the ability of the organization to achieve its objectives, such as the purchase of new buildings or buy equipment Computer.2) Expenses or resource:Other operating expenses which you spend so the organization can engage in activities such as Electricity and water expenses, salaries and others.

43

Financial management and components of Palestinian civil society organizations)

Interested in providing financial management and securing the necessary financial resources for ongoing operations and investment to Along with cash management and investment, and contribute to the achievement.

 Objectives of the organization through the following decisions1-Investment decisions and long-term financing.

2-Working capital management.Short-term financing decisions. 3 -

The goal of the Organization shall be one or a combination of the following three objectives:

1 - the goal of maximizing the value of the organization to the fullest extent possible.

2 - profit maximization.3 - the goal of maximizing the social return.

And relies on the financial management systems and accounting methods during the planning, control and decision DecisionThese systems and methods include accounting

 The following toolsFinancial accounts. * Internal control.*

Management accounting. * Castings .*

CHAPTER FOUR

Salah Islamic Society

History and About Us:

44

Founded in Deir al-Balah charity called Salah Islamic Society under the Societies Act Tark 1909 AD conditions were documented according to the Law Society charities and NGO (1) for the year 2000 and its implementing

regulations.

Salah Islamic Association was established in 1979 and holds a license under the law of the Ministry of Interior and al-Salah has emerged dramatically in the past four years, especially with the beginning of the Al-Aqsa Intifada In 2000, where many of the services provided and the permanent and emergency relief to the Palestinian people, who faces machine Israeli destruction harvested green and the ground and kill and destroy Association

was warm goodness is cuddling those Suffering from this devastation .

The headquarters of the President and the title of Deir al-Balah circle include activities and work of all its Palestinian and provinces to establish branches in

all provinces.

Enjoy al-Salah Islamic legal personality and have a financial disclosure and have the right to own movable and immovable property and dispose of them

within the limits of achieving its goals.

Salah Islamic Society aims to achieve the following :1 .Orphans, the poor and the needy and those affected by the loss of his

dependents .2 .Ensure that needy families and that counts orphans either a monthly salary

or annual assistance .3 .Ensure that school and university students in need.

45

4 .Establish kindergartens and nursery schools and private schools and Quran centers and provide educational and cultural services and general

development.

5 .Provide educational services and sports club by Salah Islamic Association and sports centers for sports activities branches supervised by the Assembly.

6 .Attention to women's issues through the establishment of centers for women's activity .

7 .Establish investment projects charitable proceeds back to achieve the objectives of the association.

What are the sources of donations and grants in support of the Association of Islamic Salah?

The sources of funding and grants that come to Salah Islamic Society source basis to carry out its activities and those are the sources of all Islamic and Arab countries and that the majority of Islamic countries and not Arab, non-Arab Islamic institutions in particular.

What are the sections in the accounting system to Salah Islamic Society?

Is divided into three sections:1. The cost center (payments).

46

2. Profit Center (receipts).3. Investment Centre.

1.Cost center (payment ):

Cost center is a center that is a compilation of costs for a particular activity, in order to determine the total costs in the enterprise, where subject to the control and cost center manager institution may be appointed the director of his own for his administration is fully responsible for all the defect d held accountable.

2.Profit Center (receipts):

It is the center responsible for all funds and receipts that come from the parties and international institutions in support of the work and activities of the institution and also there may be receipts and profit for some investment projects carried out by the institution that are not aimed at profit but

charitable projects using their profits to charity .

Receipts are divided into Salah Islamic Association into three sections which ration receipts and credit card receipts and investment receipts.

3.Investment Center:

It is considered the center part of the receipts, which turned into profitable investments used in the work and activities of the non-profit organization.

Test hypotheses

 Test the first hypothesis"I do not apply the Palestinian NGO responsibility in the accounting system

of NGOs Palestinian "

47

The previous study were chosen to demonstrate the application of accounting responsibility in the Palestinian civil organizations and these are some ratios

that show it.

1" .Accounting Information System" relative weight of 80%, and was ranked the "first ."

2" .Organizational structure of the organization," a relative weight of 77%, and was ranked the "second ."

3 ."Positions of responsibility" relative weight of 75%, and was ranked "third ."4 ."Regulatory reporting system (performance reports)" relative weight 75%,

and was ranked the "fourth ."5 ."Planning budgets," a relative weight of 62%, and was ranked the "fifth ."6 ."Incentive system" a relative weight of 60%, and was ranked "sixth."

And thus the relative weight of all axes equal to almost 73%, which is greater than the relative weight of a 60% neutral and thus are denied hypothesis.

The second test the hypothesis"Lack of the elements of the application of responsibility accounting system prevents properly applied in Palestinian NGOs. "

And the ramifications on the following assumptions, which represent these ingredients:

1) The lack of a clear regulatory structure in the presence of decentralization in the Palestinian civil society organizations.

Show that the relative weight of 77%, which is greater than the relative weight of a 60% neutral This means that be denied hypothesis.

2) lack of responsibility centers in the Palestinian NGOShow that the relative weight of 75%, which is greater than the relative weight of a 60% neutral This means that be denied hypothesis.

3) failure to implement the system in planning budgets Palestinian NGOs.Show that the relative weight of 62%, which is greater than the relative weight of a 60% neutral This means that be denied hypothesis.

48

4 )failure to implement an effective incentive system in the Palestinian NGOs. Show that the relative weight of 61%, which is greater than the relative weight of a 60% neutral This means that be denied hypothesis.

5 )non-application of an accounting information system Palestinian civil society organizations.

relative weight of 80%, which is greater than the relative weight of a 60% neutral This means that be denied hypothesis.

Results

1 )show that Palestinian NGOs apply responsibility accounting system in general, and by . 73%.

2 )are available at most of the Palestinian civil society organizations under study, a clear regulatory structure, by 77%, specifying the various

administrative levels and positions of responsibility of the organization .

49

3 )show the existence of responsibility centers in the Palestinian civil society organizations (75%) .

4 )As it turns out not to apply the system planning budgets to adequately civil organizations is required where the rate of Only 62% of the Palestinian NGO supports the existence of a comprehensive application and detailed budgets

Diagrams .5 )The study showed non-application of a system of incentives just as the

organizations that supports a system of material incentives only fair by 53.26% .

6 )as well as the lack of staff satisfaction incentive system applied, which affect the level of their performance .

7 )shows that the largest component applied to the Palestinian civil society organizations is the accounting information system. Destruction, and by 80% .

8 )There is weakness in the Tab elements of costs and revenues to the elements of a controlled substance In 32.21% of the Palestinian civil society

organization .9 ,)but the level of participation of positions of responsibility in the form of a

report design performance is not at the required level.

10 )showing the absence of functional specialization of the Palestinian civil society organizations .

11 )also show that the number of positions of responsibility in the Palestinian civil society organizations is not affected by the administrative style.

Recommendations1) Educate employees Palestinian civil organizations the necessity and importance of the application of responsibility accounting system Properly, and through the work sessions and workshops on accounting system of liability.2) the need to apply the system of planning budgets (detailed) for each responsibility center, not just a budget Projects funded by third parties, through:A) the study of the needs of each department and each center the

50

responsibility of the organization. . B) the use of the reports of previous years for planning.C) the need to involve workers in various positions of responsibility in the preparation of the budget planning. . 3) the need to link planning budgets by a system of incentives gradually, and strive to create a mechanism The financing plan for that, because of a significant positive impact in raising the performance and capabilities and morale of members of the Palestinian civil society organizations, and the achievement of its goals to meet the needs of the growing civil society.4) Focus on Tab elements of cost and revenue to the elements of a controlled substance and is subject For each responsibility center, which would in turn for easy evaluation of the performance of each individual responsibility center, And thus be the most effective application of accounting system responsibility.5) Include regulatory reporting and performance details of the planned performance in addition to the actual performance of the existing Reporting, writing and analysis of deviations between them. .

References

First: Quran

Second :Books

1. Belkaoui, Ahmed, Accounting Theory, fifth Edition, USA, 2004.

2. Drury, Colin, Management and Cost Accounting, third edition,1992.

51

3. Garrison, Ray H, Noreen, Eric W, & Brewer Peter C, Managerial accounting,

twelfth edition, Irwin, 2008.

4 .Hilton, Ronald, managerial Accounting, Mc Graw-Hill, 1991.

Third :research and scientific messages

1- Rizzi, Diala beautiful. "Elements of the application of corporate responsibility in the accounting industry in the Gaza Strip: An Empirical Study.". Master in Accounting and Finance unpublished _ Islamic University of Gaza, Palestine, 2007.

2 -KULLAB "The availability of the elements of the application of responsibility accounting system in the Bank of Palestine: Study

.Applied. "Master in Accounting and Finance unpublished _ Islamic University of Gaza, Palestine, 2008.

3- Murtaja, Ahmed Ramadan. "Measuring the possibility of applying the accounting responsibility in the Palestinian universities: An Empirical Study."

4-Study (Wade, 2008) entitled "The role of regulatory reporting in the performance evaluation system in light of the application Accounting Responsibility

Fourth :Web sites

1 -www.aman-palestine.org

2 -www.mongoa.gov.ps

3 -www.sqarra.wordpress.com

4-www.site.atfalouna.gov.ip

5-www.financialmanager.wordpress.com

6-www.ecoworld-mag.com

7-www.shura.gov.sa/arabicsite/majalat/majalah69/derasa.htm

8-www.shura.gov.sa/arabicsite/majalat/majalah71/derasa.htm

52

9-www.shabakaegybt.org.

وبالله التوفيق

53