Trade union summer residences violate rules

The Central Auditing Organization (CAO) recorded a number of financial and administrative breaches by the Egyptian Trade Unions Federation’s summer resorts service, run by Mustafa Mongy, who is also vice president of the federation. The report recorded breaches up until 13 December 2006.

The CAO report found that LE568,000 had been spent on the construction of private summer residences at el-Ahlam tourist resort, owned by the federation, without obtaining licenses required for their construction. Revelation of this fact brought the building process to a halt, under Decision No. 16/2005 of the property protection department at the New Urban Communities Authority.

The report detailed how the administrators of el-Ahlam resort had failed to adopt necessary measures to document their ownership of the resort and associated buildings on the North Coast, whose value was estimated as being worth LE25 million. The administrators also failed to insure some of the resort’s fixed assets, worth LE7.35 million as of 12 December 2006. Administrative officials also neglected to insure the resort’s safes and revenue collectors, violating Article 25 of the federation’s basic regulation on summer resorts services, issued as part of Cabinet Decree No. 196\1998 and its amendments.

The report showed that Mongy, CEO of the summer resorts service, contracted services and made procurements using direct payment methods for sums that exceeded the limits of his authorization. According to the report, Mongy expended about LE58,000 in this way, violating Article 52 of the basic regulation.

The Egyptian Trade Unions Federation’s summer resorts service announced that it is now contacting appropriate entities and adopting procedures to solve the crisis caused by the halt in building work.

Mongy argued that he had not exceeded the limits of expenditure granted him, as alleged in the report, and that he never takes unilateral decisions. He said that the sums spent were approved by the summer resorts service’s board and were dedicated to urgent work that required implementation without delay. He added that direct payments are made out for maintenance and repairs. Mongy noted that spending LE58,000 on the maintenance of a facility that yields a quarterly net revenue of LE4 million is not such a huge issue, and stressed that all such work is carried out through contracts. According to Mongy, he has managed within 19 years to increase the resort’s capital threefold; furthermore the summer residences are now finished and ready for use as demanded by the CAO.

As for the ownership and insurance of the resort’s buildings, Mongy clarified that the facilities are insured against fire but that he had not registered ownership because the resort had been built on land appropriated by the state and with the approval of officials. The necessary procedures involve exaggeratedly expensive fees and will not bring much profit for the workers in return, he said, adding that negotiations to pay the sums required are continuing.

Translated from the Arabic Edition.

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