Waqf accountability and transparency
Waqf are public goods and therefore it should be managed properly and professionally. The waqf trustee has the responsibility to ensure that the waqf could be sustained for years to come. The trustees should also ensure that the waqf objectives are met and being accountable for all their actions and inactions in discharging their duties.
In the early period of waqf (during the Prophets s.a.w and his companions), waqf managers are paid with the waqf income as it is argued that the waqf performance will have a direct impact on the managers compensation. Therefore, they will be more motivated to run the waqf efficiently. According to Hoexter (1998), the waqf managers in Algiers had all the waqf transactions recorded in a very systematic manner resembling a conservative (waqf) accounting system. From these records, the stakeholders may review the performance of the respective waqf and when the levels of trusts are high, more people are inclined to endow (waqf) their property. Wells (2006) held that if the charity lack of accountability, the public will hesitate to endow. Any misappropriations or mismanagement should be punished and the waqf manager is replaced.
Recently, the Federal Territory (FT SIRC) with the cooperation of the Pilgrims Board developed two pieces of waqf land near the KLCC that has been long due. It will be leased to the developer for a period of 25 years and afterwards it will be fully owned by the waqf. It is also estimated that the FT SIRC will receive some RM52 millions at the early stage. This is a huge amount of money and may have a significant economic impact to the Muslims in the country. However, the fund should be managed solely for the waqf purposes and the stakeholders should participate to realize the economic agenda. In this instance, the waqf accounting system should be able to help the SIRCs in the waqf financial reporting and being transparent of the fund utilized.
Conclusion
Currently, there are various accounting methods practiced by the SIRCs in Malaysia. For instance, the Federal Territory has their own in-house-developed computerized accounting software and the Penang SIRC has outsourced to a consultant to provide the accounting software. It has been found that there are many differences in the accounting treatments. Basically, there are two major types of waqf, the Waqf khayri or general waqf and Waqf khas. The two awqaf should not be consolidated as their objectives differ. There are also the assets of functional assets and investment assets. Functional assets do not generate income whereas the investment assets generate income for the waqf. Example of functional assets includes the Masjids and graveyards. Examples of investments assets are properties rented out and cash investments.
Although the functional assets may not be included in the financial statements at least it should be in the notes to the accounts or a specific reports on all the functional assets. The investments assets should be accounted for and properly recorded in the waqf financial statements. On the argument of the basis of valuation, the Islamic accounting prefers the current value rather than the historical cost as historical cost may distort the assets true value at a given time.
Lastly, the author would like to suggest that it is timely WAS be developed in order to help the SIRCs to record the waqf financial and non-financial transactions systematically and subsequently enhances the accountability and transparency of the waqf trustees. As waqf funds are public funds, the onus is on the trustees and its stakeholders to carry out their collective responsibility to ensure the future waqf growth and development.
