Orphans and Minors Funds Investment Program-Introduction:
The Ministry has accorded due care and diligence to the funds of orphans in line with its competence and duties. To this end, the Directorate General for the Management and Investment of the Funds of Orphans and Minors was established to handle the investment of minors’ funds. For this purpose, Ministerial Circular No. (7/93) was issued on 9 November 1993 as well as Royal Decree No. 47/2000 to determine the jurisdictions of the Ministry of Justice and approve its organizational chart, and Ministerial Decision No. (87/2000) to determine the administrative divisions of the Ministry and its jurisdictions.
The Directorate's Jurisdictions:
- Receive the minors’ shares of the funds sent by the courts of first instance at the Wilayats, following the estate distribution, or as a result of investment of the minors’ in-kind funds through the courts of first instance.
- Investment of the minors’ cash funds referred to the Directorate in all the lawful aspects of commercial investment, along with the management and supervision of such investments in any manner it deems fit and in accordance with the best business practices.
- Disburse all the customary or urgent expenses needed by the minor, by virtue of a written order from the court (Court Judge).
Investment Committee and its Jurisdictions:
Due to the importance of the investment aspect, and to ensure success in this regard, a committee was formed for the investment of the funds of orphans and minors under Ministerial Decision No. 13/2013. The key jurisdictions of such Committee include:
- Examining and determining the optimal aspects of commercial investment for the orphans and minors’ funds.
- Reviewing the feasibility studies for the proposed commercial investment projects.
- Reviewing and evaluating the ongoing investments in view of the circumstances of each investment as well as the nature and conditions of the market.
- Studying the proposals submitted to or by the Committee for the sale, purchase or building of properties and submit the recommendations to the Minister for approval.
- Assessing the offices and companies contracted by the Directorate under management, lease, maintenance, consulting engineering and auditing agreements.
- Reviewing the quarterly statements of the outstanding balances of the orphans and minors and submitting the appropriate recommendations accordingly.
- Reviewing the annual closing accounts and make recommendations regarding the same.
- Reviewing the real estate valuation statement and submit the same with a recommendation to the Minister for endorsement.
The Committee may seek help from any think tanks when necessary. The Committee has commenced its mission as per the said jurisdictions, and decided to venture into real estate investments for the following reasons:
- No Islamic Law restrictions to conduct such kind of investment;
- High revenue;
- Such properties can be easily sold if the Ministry needs to create cash liquidity in when a large number of orphans leave the investment upon reaching the legal age; and
- The low risk level and easy management of such investments.
Based on its meeting, the Committee has made several decisions for the purchase of several properties that amounted to (32) properties up to 28 February 2014, while the number of the minors and orphans stood at (15436) as on 28 February 2014.
Development of Commercial Accounting System:
As the Directorate in its core is like a joint-stock company for minors, thus there was a need to have an accounting system in place in order to regulate the accounting tasks carried out by the Directorate. Accordingly, a commercial accounting system was developed by “Coopers and Lybrand”, which was up and running on 1 May 1994.
The system featured the following headings:
- Legal Framework:
The Directorate General for the Investment of Funds of Orphans and Minors enjoys legal personality as a part of the Ministry of Justice, and thus is duly capable of owning, opening bank accounts and investing the orphans’ funds, which are directly under the Directorate’s supervision.
- Accounting System Objectives:
- Prompt and accurate registration of the incoming orphans cases at the Directorate;
- Prompt and accurate registration of the financial movements in the orphans’ accounts in terms of revenues and expenses;
- Calculation of the common revenues and expenses resulting from the Directorate’s investments;
- Provision of accessibility to the orphans’ electronic data, and drawing up of management information reports to be regularly and accurately submitted to the officials-in-charge so as to help them in the relevant decision-making process.
- The system is based on the distribution of income among the orphans after deducting the expenses at the end of each calendar month.
- When an orphan reaches the legal age, and upon an order from the competent court of first instance, the orphan’s rights at the Directorate will be settled by disbursing the orphan’s outstanding balance in full, after ensuring the registration of all financial transactions relating thereto.
- The investments will be evaluated on an annual basis, and any surplus or deficit revealed by such evaluation will be distributed among the orphans, each proportionally to his/her contribution to the funding.
- The system is based on the issue of the trial balance and the balance sheet (closing accounts) at the end of each calendar month, in order to show the financial position of each orphan upon the settlement of accounts.
Introduction of Automated System:
Due to the increase in the accounting operations at the Directorate, as a result of the constant increase in the number of orphans, the manual application of the system has become unviable. Thus the Directorate has assigned a specialized computer company to computerize the manual system, and the project was completed on 1 September 1995, which helped the Directorate to carry out its business promptly and efficiently.
For further enquiries:
|The Directorate-Main Address
||Ministry of Justice
||595 - 594