A Waqf-Integrated Reporting (WAQIR) Model: Performance, Governance, and Socio-Economic Impact

A Waqf-Integrated Reporting (WAQIR) Model: Performance, Governance, and Socio-Economic Impact

Rosnia Masruki, Mustafa Mohd Hanefah, Muhammad Iqmal Hisham Kamaruddin
DOI: 10.4018/978-1-7998-1245-6.ch014
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This chapter proposes the best reporting practices for waqf institutions, concerning information disclosure on performance, governance, and socio-economic impact using the waqf integrated reporting (WAQIR) model. The WAQIR model is viewed as a comprehensive reporting tool for waqf institutions. This study reviewed previous literature and reporting guidelines for waqf and similar organisations, such as not-for-profit and faith-based organisations, to identify the appropriate measurements for disclosure, limited not only to the input and output of the waqf project, but also its governance and socio-economic impact. Based on the review, the WAQIR model is explicated with four pillars of disclosure: (i) waqf financial and non-financial; (ii) waqf governance; (iii) waqf performance; and (iv) waqf socio-economic impact. The proposed WAQIR model would be useful for waqf institutions in implementing best waqf reporting practices. This could help them to enhance their accountability and to promote transparency, enabling the sustainability of the entire waqf management practices.
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The revival of waqf institutions today is consistent with the objectives of shariah (maqasid shariah). Ibn ‘Ashur defines maqasid shariah as the meanings and secrets that can be understood from the whole or part of the shariah process (Rahman, 2015). It can be categorised into three types: (i) necessities (dharuriyyat), (ii) convenience (hajiyyat) and (iii) refinement (tahsiniyyat). There are five elements under necessities (dharuriyyat), which are religion, life, mind, offspring and wealth. Laldin et al. (2012) place waqf under the element of wealth, specifically the protection of wealth (hifz al-mal). Muslims need to preserve, maintain and manage economic development in accordance with shariah. Waqf is one of the Islamic social finance elements that can be implemented in Muslims countries to develop the economy.

Waqf emerges as a solution to address ignorance, poverty and ill-health and as a means of creating wealth. History has recorded the remarkability of waqf in addressing the prevailing problems of society. Waqf institutions has played a major role in providing social goods, such as education and health and public goods, such as roads, bridges and national security. Waqf has also helped the poor, orphans and the needy; built commercial businesses, utilities (water and sanitation) and infrastructure for religious services (building and maintenance of mosques and graveyards); create employment; and support the agricultural and industrial sectors without imposing any costs to the government (Mohsin, 2008).

Learning from the success of the past, it is believed that waqf holds a great potential in solving the socio-economic problems facing the society (ummah) today. Waqf has a built-in dynamism to contribute to the socio-economic development of the ummah. The dynamism of waqf is inherent in its basic characteristics viz. permanence and inalienability. All the schools of shariah “have stressed the importance of the creation of a waqf, which had played an important role in ameliorating poverty and in furthering learning in the past and it is expected to play its role in the future, provided this institution is reactivated and its management is placed on sound footing” (Kahf, 2003). Waqf is one of the mechanisms for wealth creation and distribution developed based on Islamic teachings and principles.

However, to date, in Malaysia and elsewhere, there has been increasing public interest in the transparency of waqf institutions, particularly on their outcome, impact, effectiveness and efficiency. The public has continued to demand for better services and greater transparency. Recently, the local media has reported some criticisms about the accountability of Islamic faith-based institutions, including waqf institutions. For instance, the Malaysia Anti-Corruption Commission (MACC) has received 39 reports on the manipulation and misappropriation of public funds during the 2015 flood crisis (Astro Awani, 2015). Moreover, there are some negative perceptions regarding the spending method, a major factor driving the cancellation of contributions by 32,934 regular donors of Yayasan Pembangunan Ekonomi Islam Malaysia (YAPIEM), an Islamic organisation in Malaysia, from February 2015 to February 2016 (Teng, 2016). Moreover, many Islamic non-profit organisations that focus on humanitarian aid, including those based in Malaysia, are accused of being involved in terrorism financing (Kamaruddin, 2016; Othman & Ameer, 2014). There was also a report on the apprehension of top management people in one of the Islamic non-profit organisations for embezzlement (Hassan, 2017).

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