An interest, exchange and tax income haven: Turkey's Presidency of Religious Affairs

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The Court of Accounts has submitted its "2019 Audit Report" on the Presidency of Religious Affairs to the Parliament.

The report has separately addressed the Presidency of Religious Affairs and its Religious Publications Circulation Capital Enterprise.

The report has noted that the Presidency of Religious Affairs has a broad and widespread organization in Turkey and abroad with 131 thousand 789 personnel in total. According to the report, 26 thousand 60 of these personnel were contract employees.

The report has also indicated that the Presidency has 81 provincial mufti's* offices, 922 district mufti's offices, 10 religious higher education and 21 education center directorates. 102 thousand 81 employees in total work in the mufti's offices of the Presidency, the report has shown.

81.2 percent spent for personnel expenses

The report of the Court of Accounts has indicated that the budget expenditure of the Presidency of Religious Affairs was 10 billion 211 million 680 thousand Turkish Lira (TRY) (~1 billion 311 million USD) in 2019.

According to the report, 81.2 percent (8 billion 296 million 492 thousand TRY) of this expenditure was for personnel expenses.

In 2019, the premiums paid to the Social Security Institution (SGK) accounted for 14.3 percent (1 billion 459 million 968 TRY) of the total expenditure. Taken together with the premiums to the SGK, the money spent for personnel expenses accounted for 95.5 percent of the total expenditure.

The Court of Accounts report has also indicated that a total of 121 thousand TRY extra-budget expenditure was made for the temporary and contract workers of the Presidency. The Presidency also spent 481 thousand TRY as penalty for delay in paying the SGK premiums.

The Presidency of Religious Affairs spent 2 million 557 thousand 795 TRY for advertisement. While the Presidency spent 168 thousand 829 TRY to purchase goods and services for production, it spent 140 million 437 thousand 624 TRY to purchase goods and services for consumption.

While the Presidency spent 7 million 640 thousand TRY for stationery, it spent 23 million 648 thousand for fuel, spent 1 million 752 thousand TRY for clothing, furniture and notion, 21 million 665 thousand TRY for food and it spent 1 million 613 TRY for beverages in 2019.

The Presidency also transferred 42 million 157 thousand TRY to non-profit organizations and 781 thousand TRY to abroad.

96 percent of its income is from taxes

The tax incomes of the Presidency of Religious Affairs accounted for 96 percent of its budget incomes. Of the Presidency's income of 832 million 798 thousand TRY, 736 million 601 thousand were from taxes.

With repudiations and returns deducted, the Presidency of Religious Affairs' net budget incomes accounted for around 44 percent (404 million 507 thousand TRY) of all budget incomes.

Moreover, 259 thousand TRY was indicated as interest income in the Operating Results Table of the Presidency of Religious Affairs and 1 million 937 thousand TRY was cited as interest income in its Circulation Capital Enterprise Balance Sheet.

The report of the Court of Accounts has noted that the Presidency of Religious Affairs had a total of 2 million 197 thousand 374 lira interest income through the Presidency and Circulation Capital last year.

This figure was 245 thousand 530 TRY in 2018 while it was 256 thousand 806 TRY in the year before.

Its capital has quadrupled in five years

The same report of the Court of Accounts has also addressed the "Presidency of Religious Affairs Religious Publications Circulation Capital Enterprise." According to the report, this enterprise has 65 personnel in total, including 1 director, 4 vice directors, 2 publication sales managers.

The capital of the enterprise which was founded in 1990 was 20 million TRY. It was first increased to 40 million TRY by a Cabinet decree in 2015, then to 80 million TRY by a Presidential decree in July 2017.

According to the report, the net income of the enterprise was 11 million 600 thousand TRY in 2019. While the gross sales of the enterprise was 41 million 251 thousand TRY in 2019, its interest income was 1 million 937 thousand TRY and foreign exchange income was 2 million 158 thousand TRY.

Evaluation of internal control system

The Court of Accounts has also evaluated the internal control system of the Presidency of Religious Affairs:

"There are works to ensure that the administration inspects the internal control system of its all units for at least once a year, reports it to the Internal Control Monitoring and Directing Board and submits it to the approval of the top directors; however, these works have not yet been completed.

"The works undertaken to eliminate the shortcomings detected in the internal control elements indicated in the evaluation report approved by the top directors are insufficient.

"The number of internal auditors is not adequate to ensure that they can fulfil the internal audit function. A work was undertaken to obtain findings about this issue. There are works undertaken by the internal audit unit to audit and report on the internal control system; however, they are not effective."

Expressing opinion as to the audit of the Presidency of Religious Affairs in 2019, the Court of Accounts report has indicated that "the financial reports and tables within the scope of the related financial reporting contain accurate and reliable information in its all aspects." (HA/SD)

*A mufti is generally defined as "a Muslim legal expert who is empowered to give rulings on religious matters."