Transparency and Accountability of Zakat Institution: Lembaga Zakat

Transparency
and
Accountability
of Zakat Institution:
Lembaga Zakat Selangor Experience
P R E S E N T E D B Y:
HJ. HUSSIN BIN MOHD ALI
CHIEF EXECUTIVE OFFICER
L E M B A G A Z A K AT S E L A N G O R
SEMINAR ON ACCOUNTABILITY & TRANSPARENCY OF ZAKAT INSTITUTIONS
Organised by: International Institute of Advanced Islamic Studies
9 August 2016
Content
1
2
Zakat
Administration in
Selangor
Accountability
Framework
3
Initiatives and
Achievements
Introduction
Verily! Allah commands that you should render back the trusts to those to
whom they are due. (An-Nisa (4):58)
O Believer! Betray not Allah and His Messenger, nor betray knowingly your
Amanah (An-Anfal (8):27)
Trustworthiness is a requirement, since the zakah officer will be handling public
funds. He or she must be righteous and honest so as not to oppress the rich or
neglect the rights of the poor (Yusuf Qaradhawi)
Corporate Governance means the process and structure used to direct and
manage the business and affairs of the company towards enhancing business
prosperity and corporate accountability with the ultimate objective of realising
long-term shareholder value, whilst taking into account the interests of other
stakeholders. (Malaysian Code On Corporate Governance 2012)
In order to be accountable to the public and stakeholders, a zakat organizations need to
be fully transparent
* by ensuring processes, institutions, and information are accessible
and sufficient to the related parties, especially to the stakeholders for monitoring
purpose. (Ram A.S, Norazita M.A. Aziz and Norfaiezah S.)
Zakat Administration in Selangor
Reporting Structure for Zakat Administration
in Selangor
DULI YANG MAHA MULIA
SULTAN SELANGOR
MAJLIS AGAMA ISLAM SELANGOR
BAITULMAL
ZAKAT ADMINISTRATION
WAQAF ADMINISTRATION
Milestone for Zakat Administration in Selangor
Registered as MAIS Zakat
Sdn Bhd. Known as
Pusat Pungutan Zakat.
Mandate : Only Zakat on
wealth
Given mandate to
manage zakat fitrah
The name Pusat
Pungutan Zakat was
changed to Pusat
Zakat Selangor
(MAIS)
MS ISO 9002:1994
certified
Pusat Zakat Selangor
absorbed
disbursement
function from MAIS
Upgrade to
Lembaga Zakat
Selangor established
under Trustee
(Incorporation) Act
1952
PZS hq shifted to
Kompleks MAIS
Klang
LZS hq shifted to
Bangunan Zakat
Selangor at Presint
ALAMI, Section 13,
Shah Alam
Mandate to Collect and Distribute Zakat
LZS is established by MAIS under Section 7(2)(b) : Enakmen
Pentadiran Agama Islam Negeri Selangor (EPAINS)
Section 86 EPAINS – MAIS is authorized to collect and
distribute zakat and fitrah for Selangor state
Section 87 (2)© EPAINS – MAIS appoint LZS as amil to collect
and distribute zakat and fitrah
Peraturan Zakat & Fitrah (Negeri Selangor 2012) – give
mandate to LZS to oversee zakat collection and distribution
LZS is an approved legal entitiy established under Trustee Act
1952
Accountability Framework
LZS Accountability Framework
Din al-Islam
Pillars of Islam and zakat is the third pillar
Al-Baqarah (2):43
Role of Amil prescribed as the zakat administrator
Lembaga Zakat Selangor appointed to administer
zakat
The duties as an amil is to collect and distribute zakat
An-Taubah (9):60
LZS Accountability Framework
Answerable to
Allah SWT
Governing Rule for LZS
An-Nisa (4):58
Answerable
To Stakeholder
MAIS, Zakat payer, zakat recipient and public
LZS Accountability Framework
Governance, Risk Management, and
Compliance (GRC) are three pillars that
work together in LZS for the purpose of
assuring LZS meets its objectives.
Governance is the combination of
processes established and executed by the
board of trustee that are reflected in the
organization's structure and how it is
managed and led toward achieving goals.
Risk management is predicting and
managing risks that could hinder the
organization to achieve its objectives.
Compliance with the company's policies
and procedures, laws and regulations,
strong and efficient governance is
considered key to an organization's
success.
Action and Initiatives
Action and Initiatives
Governance
LZS Trust
Deed
Authority
Manual
Trust Deed
(Surat Ikatan
Amanah) for
LZS was
registered at
The Legal
Affairs
Division of
the Prime
Minister's
Department
(BHEUU).
Formalize the
delegation of
authority in LZS
Identify in a
systematic
manner the
level and scope
responsibilities
Fatwa Sistem
Fatwa Sistem
Pengurusan Agihan Pengurusan Kutipan
Zakat
Zakat
Provides shariah
guidelines:a. Disbursement
principles
b. Definition for
each asnaf
c. Criteria of each
asnaf
d. Types of
assistance for
each asnaf
Provides shariah
guidelines:a. Collection
Principles
b. Zakatable
wealth
c. Conditions
d. Calculation
method for
each type of
zakat
Action and Initiatives
Identifying Poor
Zakat institution introduces
Sufficiency Limit known as
Had Kifayah as a mechanism
to identify poor household.
An
evaluation
will
be
conducted on the basic
expenses for a family.
The basic expenses inclusive
shelter,
food,
clothing,
education,
medical
and
transportation. The rates are
as follows:
BIL
CATEGORY
RATE
Paid Home Unpaid Home
1
Head of Household
2
Working Adult
415
3
Non Working Adult
(Above 18 yrs old)
190
4
Children in IPT
235
5
School Children
(7 – 17 yrs old)
185
6
Child
(Below 7 year old)
120
TOTAL
895
2,040
570
1,715
Action and Initiatives
Identifying Poor
For a family of 6 with one person for
each category, the sufficiency limit is
RM2,040.
If the total household income is less
than this amount, they can be
considered as needy (miskin) and if
the income is less than half of this
Sufficiency Limit, they can be
considered as poor (fakir).
In 2016 there are 45,876 poor and
needy family registered by LZS.
Action and Initiatives
Identifying Poor
STATISTICS FOR ASNAF FAKIR DAN MISKIN FOR 2012-2016)
No
District
2012
2013
2014
2015
2016
1
Klang
3,242
3,947
6,470
7,528
7,498
2
Hulu Langat
4,407
5,183
10,957
7,087
7,775
3
Kuala Langat
2,365
2,738
3,257
3,804
3,920
4
Sepang
809
1,143
1,521
1,831
1,875
5
Hulu Selangor
2,228
3,039
3,451
4,308
4,468
6
Sabak Bernam
3,171
3,768
4,125
4,210
4,144
7
Kuala Selangor
3,277
3,853
4,535
5,303
5,535
8
Gombak
1,985
2,124
2,460
2,974
3,022
9
Petaling
4,585
5,155
6,885
7,248
7,639
26,069
30,950
43,661
44,293
45,876
Total
Action and Initiatives
LZS is supervised by
1
Majlis Agama
Islam Selangor
2
LZS Board of
Trustee
3
16 Committees
Action and Initiatives
Compliance and
Audit Exercise
The purpose of an audit is
to
provide
an
objective
independent
examination of the financial
statements,
which
increases the value and
credibility of the financial
statements produced by
management,
thus
increase user confidence in
the financial statement,
reduce investor risk and
consequently reduce the
cost of capital.
There are at least six
planned
audit
session
besides ad hoc and special
audit.
Action and Initiatives
Transparency
LZS aware that transparency is one
the most crucial element in order to
gain public trust.
Thus, LZS
Action and Initiatives (Transparency)
Financial:• Audited Financial Reporting
• Zakat Collection
• Zakat Distribution
• Administrative Fund
• LZS obtain clean Audit Certificate since
2008.
Action and Initiatives (Transparency)
Human Recourses:• Clear Job Description and
comprehensive
Key
Performance Indicator
• Establish
an
objective
performance management
• Inculcate core values
• Introduce Whistle Blowing Policy
Action and Initiatives (Transparency)
Process:• Apply MS ISO 9002 and Quality Management
System
• Precise guidelines and standard operating
procedure.
Information:
• Conduct press conference to share yearly
achievements
• Publicize annual report in newspaper, magazine
and website
• Use social media actively especially facebook and
instagram.
• Zikra (Ziarah Korporat): Invite zakat payer and
media to LZS project and zakat recipient.
• Dialog session with media, blogger, NGO,
academician etc
Action and Initiatives
Annual Reports
Financial report also published yearly in the newspapers. These annual reports also available
in the website for public review
Action and Initiatives
Annual Report in the Form of Leaflets
Conclusion
LZS upholds the accountability in managing zakat in Selangor.
The accountability not only to Allah SWT but to the stake holder
especially zakat payer, zakat recipient and public.
Diverse steps taken by LZS to ensure governance is in place and the
institution is managed effectively and efficiently.
All parties should give full support to zakat institution, unite under
one roof and strive together for the betterment of ummah.
Thank You
‫جزاك هللا خيرا كثيرا‬
www.zakatselangor.com.my
Talian Zakat Selangor:
1-300-88-4343