A case study in selected institution

This chapter is a continuous study from Kamaruddin et al. (2018)² which previously conducted research in order to understand waqf management practices in selected waqj institution in Malaysia. The previous study was focused on: (i) waqf governance, (ii) waqf application, (iii) waqf monitoring and (iv) waqf reporting. Therefore, this chapter extends the scope by focusing on waqj socio-economic impact disclosure by the selected u'd^/'institution in Malaysia. For the purpose of this study, one particular waqj institution in Malaysia was studied, namely Waqf Institution A. Although there are other waqj institutions in Malaysia, this study however decided only to examine waqj management practices in Waqj Institution A due to several reasons. First, Waqf Institution A is well established as compared to other institutions in Malaysia. Second, Waqf Institution A is among few waqf institutions in Malaysia that administer more than RM 500 million of waqf assets — thus, significant to be investigated. Third, Waqf Institution A is offering various waqf programs and activities, which give larger impact towards beneficiaries as compared to other waqj institutions in Malaysia. The detail of Waqf Institution A is as follows.

Background of Waqf Institution A

Waq f Institution A was established with the consent of its state ruler on 11 January 2011 and was gazetted on 3 February 2011. Previously on 30 October 2009, the state ruler ordered the State Islamic Religious Council A (SIRC A) to empower waqf administration by establishing a separate waqj entity from the SIRC A, similar to separation of zakat administration from the SIRC A previously. Thus, a new separate waqf entity known as Waqj Institution A is established from this order, parallel with the state enactment where the SIRC A is eligible to establish a body that is suitable to administrate and manage activities that serve its waqf initiatives. Waqf Institution A is one of the bodies established to carry specifically on waqj objectives by the SIRC A which is to administrate waqj funds including collection, management and distribution processes. Specifically, Waqf Institution A’s roles and functions are as follows:

• • Advise the SIRC A with respect to the policies, methods, measures needed to be implemented and taken to encourage the development of waqf property and products;
• • Implement and give effect to such policies, instructions or directives of the SIRC A in respect of property development and endowment products;
• • Develop, adopt and implement policies, ways and measures on property development and endowment products;
• • Coordinate the implementation of the waqf property and product development rapidly;

• • Plan, develop, implement and promote the development and implementation of waqf property and products;
• • Manage and run the operation and maintenance of waqf facilities, infrastructure and equipment in the waqf area; and
• • Promote, coordinate and carry out research and development in all aspects of waqf property and products.

Normally, waqf can be categorised into two types which are waqfam (general waqf) and waqfkhas (specific waqf). Waqfam is a waqf contributed by waqif (waqj donors) without any specific purposes or intention. Meanwhile, waqfkhas is a waqj contributed by waqif with specific purposes and intention on the usage of waqf. Under these two types of waq f Waqj Institution A currently provides five waqfam schemes and one waqfkhas scheme. These waqf schemes are:

• 1 Cash waqf scheme — this waqj scheme is a way for waqif to perform waqf through cash. In this case, waqif will buy the waqf share units offered by the SIRC A as the sole trustee of waqf property in Selangor and impose such units indefinitely for Allah SWT with the purpose and interests of Muslims.
• 2 Infaq waqf scheme — this waqf scheme is a way for waqif to perform waqf through salary deductions. The infaq scheme was created in order to facilitate civil and private employees with a monthly salary deduction at a minimum rate of RM 5.00 and no maximum rate was set.
• 3 Corporate waqj scheme — this waqf scheme is focused on private, corporate and government-owned subsidiaries (GLCs) to perform waqf. These entities are being called to involve and contribute together in the development of waqj property through donations given. Besides providing waqf instrument as one of the corporate social responsibility (CSR) to Muslims, this corporate waqj scheme will make private and corporate groups as the icon of the Muslims to continue to live the practice of waqf.
• 4 Gold waqf scheme —this waqf scheme is for waqif who are interested to perform waqf through gold.
• 5 Art waq f scheme — this waq f scheme is similar to cash waqf scheme, but this scheme is focused more on artists, actors, singers, film/drama directors, composers, painters and others from art industry to perform waqf.
• 6 Waqfkhas scheme — this waqf scheme is varying based on waqif intention. Normally, waqfkhas is highly related to assets such as land and building that are contributed by waqif with specific intention. At present, there are about 200 waqfkhas projects which are currently in progress status under Waqf Institution A that cover various activities such as development of waqf land into religious school, cemetery or mosques.

Governance practices of Waqf Institution A

H'ùij/'Institution A is led by a chief executive officer (CEO), who is responsible to report to the Waqj Institution A’s board of directors (BOD). The BOD consists of 11 members from various backgrounds such as accounting, business, religious, legal, architecture and land. The BOD is responsible in governing and implementing all waqj projects and activities run by Waqj Institution A. The BOD is also responsible to the waqf fund collection mainly endowed by public at large. The list of the current BOD members’ designation is as follows:

• 1 Chairman (Deputy Chairman ofSIRC A).
• 2 Deputy Chairman (representative from public listed company — real estate developer company)
• 3 Board Member (representative from private company — real estate developer company).
• 4 Board Member (former Director of the State Auditor General).
• 5 Board Member (State Mufti).
• 6 Board Member (SIRC A Member).
• 7 Board Member (Secretary ofSIRC A).
• 8 Board Member (State Legal Advisor).
• 9 Board Member (representative from private architecture firm).
• 10 Board Member (Director of the State Land Registry Office).
• 11 Board Member (CEO of Waqf Institution A).

Besides BOD, Waqj Institution A has four departments consisting of the Finance Department, the Administration Department, the Marketing and Da’wah Department and also the Research and Investment Department. In addition, Waqj Institution A also has a separate Internal Audit Unit which is responsible for internal audit processes. Moreover, although its headquarter is located at the state capital, Waqf Institution A has also appointed nine waqj officers under the Marketing and Da’wah Department; each waqf officer is responsible for waqf collection in all nine districts in the state.

Waqf socio-economic impact disclosure

The discussions on waqf socio-economic impact disclosure are presented according to three common types of waqf schemes in Waqf Institution A. which are: (i) cash waqf scheme, (ii) share waqf scheme and (iii) waqfkhas project. Under cash ira^/scheme, Table 15.3 highlights the findings from the current practices from the interviews with regard to the input, output and impact of cash waqf scheme.

Based on Table 15.3, several recommendations are made. For input disclosure, it is proposed for Waqf Institution A to vary their input method by considering the introduction of e-wallet or other digital platforms by using QR Code for waqif to contribute in cash waqf scheme. Meanwhile, for outcome

Table 15.3 Waqf socio-economic impact disclosure on cash waqf scheme

disclosure, Waqf Institution A is required to disclose several indicators for each cash waqf activity such as follows:

• • Education — number of schools, number of classes, number of students and number of programs.
• • Health — number of patients, number of medical equipment, number of medicine contributed (based on medicine types), number of hours for medical consultations (including medicine manpower) and number of disease cured (based on disease types).
• • Investment — number and amount of investment (based on investment types), investment returns and number of beneficiaries benefited from investment projects).

In addition, for effectiveness disclosure, it can be done by calculating and analysing cash waqf activities/programs conducted with cash waqf target (KPI), while for efficiency disclosure, Waqf Institution A can make an additional disclosure by computing and analysing the ratio of distributed cash waqf for each type of waq f activity/program/expense. Last but not least, for productivity disclosure, Waqf Institution A is suggested to calculate and analyse outcome indicators (contribution towards nation) as follows:

• Education — comparing number of schools, number of classes, number of students and number of programs with the state statistics.

• • Health — comparing number of patients, number of medical equipment, number of medicine contributed, number of hours for medical consultations and number of disease cured with the state statistics.
• • Investment — comparing number and amount of investment, investment returns and number of beneficiaries benefited with investment projects with the state statistics.

Meanwhile, under share waqf scheme, Table 15.3 highlights the findings from the current practices from the interviews with regard to the input, output and impact of share waqf scheme.

Based on Table 15.4, it is found that not much disclosure is made regarding waqf share scheme by WaqJ Institution A. Therefore, several recommendations are made. For input disclosure, it is proposed for Waqf Institution A to disclose the amount received for share waqf and list of waqJ projects. Meanwhile, for outcome disclosure, WaqJ Institution A is required to disclose the list of distribution/completed waqf projects. Moreover, for outcome disclosure, it is suggested for WaqJ Institution A to disclose several indicators for each distribution/completed of share waqf including:

• • Number of waqJ projects from waqJ share.
• • Percentage of shares/acquisition from total share for each waqf project (ownership status).
• • Number of beneficiaries benefited from waqJ projects.

For effectiveness disclosure, it can be done by calculating and analysing waqJ project distribution/completed with waqf share target (KPI), while for efficiency disclosure, WaqJ Institution A is proposed to compute and analyse the

Table 15.4 WaqJ socio-economic impact disclosure on share waqf scheme

ratio on the distribution of share waqf for each type of use or acquisition. Last but not least, for productivity disclosure, Waqf Institution A is suggested to make an analysis of the contribution percentage made by share waqf towards national equities or wealth in general. Last but not least, under waqjkhas project, Table 15.5 highlights the findings from the current practices from the interviews with regard to the input, output and impact of waqfkhas project.

Similar to share mn^/'scheme, current disclosure practices by Waqf Institution A on waqfkhas project are limited to only number of land (lots and acres) and list of current waqfkhas projects. Therefore, several recommendations are proposed. For input disclosure, it is proposed for Waqf Institution A to disclose total value of land acquired (historical cost) and also total number and value of building acquired (historical cost). Meanwhile, for outcome disclosure, besides disclosing the list of current waqfkhas projects, Waqf Institution A is also suggested to disclose the list of completed waqfkhas projects (number of mosques, cemeteries, schools). Moreover, for outcome disclosure, it is suggested for Waqf Institution A to disclose performance indicators for each waqf land and waqfkhas project outcome included as follows:

• • Waqfkhas project (mosques) — number of prayer spaces created (number of jemaali), number of kulliyyah conducted and number of activities conducted according to age group.
• • Waqfkhas project (schools) — number of students and teachers, number of classrooms and number of programs (pre-school, primary, secondary, post teenagers, tahfiz, training and skill centre).

Table 15.5 Waqf socio-economic impact disclosure on waqfkhas project

• • Waqfkhas project (cemetery) — Land square feet (sqft) for cemetery, number of graves used and number of graves available.
• • Waqfkhas project (orphanages and old folks homes) — number of centres and number of orphans or old folks.

Furthermore, for effectiveness disclosure, it can be done by comparing expected (KPI) with actual completed waqfkhas projects, while for efficiency disclosure, WaqJ Institution A is proposed to compute and analyse ratio on the percentage of completion of waqfkhas project for each type of waqfkhas project. Last but not least, for productivity disclosure, Waqf Institution A is suggested to calculate and analyse outcome indicators (contribution towards nation) as follows:

• • Waqfkhas project (mosques) — number of prayer spaces created (number ofjemaali), number of kulliyyah conducted and number of activities conducted according to age group vs state statistic.
• • Waqfkhas project (schools) - number of students and teachers, number of classrooms and number of programs with the state statistic.
• • Waqfkhas project (cemetery) — Land sqft for cemetery, number of graves used and number of graves available with the state statistic.
• • Waqfkhas project (orphanages and old folks homes) — number of centres and number of orphans/old folks with the state statistic.