| Egypt: Integrity Scorecard Report > Sub-Category: State-Owned Enterprises | ||
| Indicators | Score | |
| 64 | In law, is there an agency or equivalent mechanism overseeing state-owned companies? | 100 |
| 65 | Is the agency or equivalent mechanism overseeing state-owned companies effective? | 45 |
| 66 | Can citizens access the financial records of state-owned companies? | 65 |
Indicator and sub-Indicator Details
| 64 | In law, is there an agency or equivalent mechanism overseeing state-owned companies? | |||||||
| 64: In law, is there an agency or equivalent mechanism overseeing state-owned companies? | ||||||||
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Comments: In law, the Central Auditing Apparatus is the agency overseeing state-owned companies. By virtue of law no. 129/1960, the Central Auditing Apparatus was established with the general aim of financially and administratively monitoring civil service agencies, companies and banks in which the public money portion has a share. In the amending law no. 144/1988, the aim of the apparatus was to monitor the money of the state and civil servants and to help the legislature in practicing its monitoring role. References: Law no. 144/1988 establishing the Central Auditing Apparatus, the official newspaper, issue 23, Nov. 9, 1988.
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| 65 | Is the agency or equivalent mechanism overseeing state-owned companies effective? | |||||||
| 65a: In law, the agency or equivalent mechanism overseeing state-owned companies is protected from political interference. | ||||||||
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Comments: In law, the Central Auditing Apparatus, the supreme audit institution, is not protected from political interference. Law no. 144/1988 amending the previous law organizing the agency made the Central Auditing Apparatus subordinated to the president of the republic, head of the executive branch, after it had been subordinated to the legislature, the branch monitoring the executive branch. With law no. 129/1964 being amended by law no. 144/1988, the independence of the Central Auditing Apparatus and the protection of its chief against political interference have completely been damaged. In the old law, chief of the apparatus could not be removed or his mandate could not be extended in office, but the amending law gave the president of the republic and his assistants of course - the authority to remove heads of the apparatus or extend their periods in office. References: Law no. 144/1958 and amended by law no. 157/1995, the official newspaper, issues 23, June 9, 1988.
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| 65b: In practice, the agency or equivalent mechanism overseeing state-owned companies has a professional, full-time staff. | ||||||||
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Comments: In practice, the Central Auditing Apparatus has a professional, full-time staff. After 44 years since its establishment, the agency has now very experienced staff. References: Article 7 of law no. 144/1988 establishing the Central Auditing Apparatus, the official newspaper, issue 23, Nov. 9, 1988.
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| 65c: In practice, the agency or equivalent mechanism overseeing state-owned companies receives regular funding. | ||||||||
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Comments: In practice, like all other civil service agencies, the Central Auditing Apparatus receives regular funding from the state. References: Law no. 144/1988 establishing the Central Auditing Apparatus, the official newspaper, issue 23, Nov. 9, 1988.
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| 65d: In practice, when necessary, the agency or equivalent mechanism overseeing state-owned companies independently initiates investigations. | ||||||||
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Comments: As stated in article 5 (clause 3) of the law organizing the Central Auditing Apparatus, it is authorized to monitor and check the decisions made by civil service agencies, especially financial and administrative decisions, to ascertain that the appropriate procedure has been taken. It can also require the agency making the decision to rethink its decision within 30 days of receiving documents. If the agency does not apply the demand of the apparatus, it demands presenting the civil servant to the Disciplinary Court. References: Law no. 144/1988 establishing the Central Auditing Apparatus, the official newspaper, issue 23, Nov. 9, 1988.
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| 65e: In practice, when necessary, the agency or equivalent mechanism overseeing state-owned companies imposes penalties on offenders. | ||||||||
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Comments: The law organizing the Central Auditing Apparatus does not authorize it to imposes penalties on offenders. It does not even give it the authority to present the offenders to the general or the administrative prosecution. Its reports only notify offending state-owned companies to stand before the Disciplinary Court within 60 days. This deprives the agency of any effectiveness as a monitoring agency. References: Law no. 144/1988 establishing the Central Auditing Apparatus, the official newspaper, issue 23, Nov. 9, 1988.
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| 66 | Can citizens access the financial records of state-owned companies? | |||||||
| 66a: In law, citizens can access the financial records of state-owned companies. | ||||||||
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Comments: In law, state-owned companies, especially those registered according to law no. 159/1981, are required to announce their budgets in national, state-owned newspapers. References: Law no. 159/1981 organizing public access to the budgets of the joint-stock companies
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| 66b: In practice, the financial records of state-owned companies are regularly updated. | ||||||||
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Comments: Egypt has been coordinating with the World Bank to develop a model for running companies. Thus, the government is keen to obtain accountable and transparent financial reports so that local accountability standards can be compared to the international accountability standards. References: Dr. Ola Al-Khawagah, The Concept of Governing Companies, a paper delivered at the conference on Good Governance And Development, Center for Developing Country Studies and Research, 2003, P. 11.
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| 66c: In practice, the financial records of state-owned companies are audited according to international accounting standards. | ||||||||
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Comments: In practice, the financial records of state-owned companies are audited according to the administrative rules of each company. These rules align with international accounting standards in 39 standards out of 48 ones since the laws governing companies and stock market include the same standards. Among the steps taken to reinforce this approach was the enactment of the central commitment and registry law and its executive regulations. The new rules aim at establishing an advanced circulation mechanism for establishing transparency and limiting the use of information that is not available for the rest of the market as a means for protecting the rights of the investors. These rules are also enforced by imposing penalties on the companies that do not stick to them. Several laws have been revised or added for this purpose. References: Dr. Ola Al-Khawagah, The Concept of Governing Companies, a paper delivered at the conference on Good Governance And Development, Center for Developing Country Studies and Research, 2003, P. 11.
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| 66d: In practice, citizens can access the financial records of state-owned companies within a reasonable time period. | ||||||||
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Comments: In law, state-owned companies, especially those registered according to law no. 159/1981, are required to announce their budgets in national, state-owned newspapers. References: Law no. 159/1981 organizing public access to the budgets of the joint-stock companies
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| 66e: In practice, citizens can access the financial records of state-owned companies at a reasonable cost. | ||||||||
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Comments: In practice, citizens can access the annual budgets of state-owned companies via newspapers without any cost. The cannot access the financial records of these companies. References: Law no. 159/1981 organizing public access to the budgets of the joint-stock companies
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