Prioritizing Zakat Core Principles Criteria

Prioriting Zakat Core Principles CriteriaZakat Institution (OPZ) is the intermediary organizations based on social. The entire of operating expense is taken from the zakat and infaq funds collected. The Zakat Core Principles are a starting point for the frameworks and standards of zakat-based governance best practices. The Zakat Core Principles is mainly aimed to improve the quality of the zakat systems by identifying such weaknesses in the existing of supervision and regulation. This study try to prioritize the Principles of ZCP and also the essential criteria from each level using Analytic Hierarchy Process (AHP).There are five core principles of charity principle, consisting of: regulation, supervision, collection and disbursement management, risk management, and audit and transparency. From these principles, the main priority is regulation following with audit and transparency.DOI: 10.15408/ess.v7i2.5275


INTRODUCTION
Zakat has a main role in the creation of justice in the economic field, in which all citizens have a source of revenue and income to fulfill daily needs for their life. In management of the use of zakat funds, the most important is the role of amil zakat (read: Zakat Institution) as bearers of the trust in management of the zakat funds. If the amil zakat is good in its management, then eight of zakat receipts (ashnaf) will be good anyway. But if the amil zakat is not good in its management, it should not be expected to ashnaf will be good too, that is essence of the amil zakat strategic. In other words, the most important thing of zakat is how to manage the use of zakat funds (management).
Zakat Institution (OPZ) is the intermediary organizations based on social.
The entire of operating expense is taken from the zakat and infaq funds collected. It is also justified by Sharia, because OPZ committee is Amilin zakat that also included in eight ashnaf eligible for Zakat. The portion used for operation activities and Amilin's salaries.
Zakat system comprising of zakat institution, zakat collector, zakat recipients ('ashnaf), and zakat payer (muzakki) elements, has started to re-emerge in some Muslim populated countries (Kahf, 2002). Some of them have already had a well designed operating guidelines and regulations. However, in general, the development of Zakat system is still in the early stage. To foster the development of Zakat system, it can take the benefit from the advancement that has been achieved in the financial market. Learning from institutional theory, institutional environment that covers strong legal environment and regulatory environment, good governance, and socio-economic impacts are among the important aspects that the Zakat system can learn from. In the absence of institutional environment for Zakat development, there will be the absence of governing rules or common grounds for Zakat institutions worldwide. Thus, an international collaboration in terms of working group is deemed necessary to explore the potential of zakat development in the future. The working group came up with principles for effective and efficient zakat operation including the legal foundation, governance, risk management, financial integrity and etc. Vol. 7,No.  Although OPZ based on social, but the management still needs to uphold professional, accountability, and transparency principles. Most recently, in the measurement of the effectiveness of zakat management, Baznas in cooperation with Bank Indonesia initiate the concept of Zakat Core Principles (Beik, 2014). The development of zakat regulations may benefit from current developments that are taking place in other financial sector industries. Thus, the Core Principles on Governance for Zakat Management aim to adapt the existing internationally recognized frameworks of the Basel Core Principles (BCPs). The Basel Core Principles (BCPs) are the minimum standards for sound prudential regulation and supervision of banks and banking systems. The BCPs have already been conducted as a banking quality benchmark in more than 150 countries, so that the BCPs may represent the best role model for assessing the quality of the supervisory practices.
By adapting the BCPs, the Zakat Core Principles represent an international standard of high-level principles to achieve and assess Zakat supervisory practices. This section adapts the 29 Basel Core Principles that were last revised in September 2012 (Basel Committee on Banking Supervision, 2012).
To retain as a flexible, globally, applicable standard, the Zakat Core Principles are formulated by the proportionality concept from a broad range of zakat institutions (from compulsory zakat management system to voluntary zakat management system). The main objective of the Zakat Core Principles is to strengthen a sound supervisory zakat management and a zakat safety net instrument among Muslim countries.
The Zakat Core Principles are the minimum standards to be applied by all zakat supervisions. In implementing compliance with a Principle, this section proposes the assessment criteria for each 18 Principles under a set of "essential criteria" and "additional criteria" for each Principle. Essential criteria are elements that should be present in to assess full compliance with a Zakat Principle. Additional criteria are elements that may be relevant to the countries with advanced zakat system. To achieve best zakat supervisory practices, a country may voluntarily choose to be assessed against the additional criteria, in addition to the essential criteria. These studies try to prioritize the 18 Principles of ZCP and also the http://journal.uinjkt.ac.id/index.php/esensi DOI: 10.15408/ess.v7i2.5275 essential criteria from each level.

METHOD
This research is using primary data, which is obtained by doing in-depth interview with experts from academician. In order to synthesize the problems and make it in priority, second meeting (interview) with experts is needed to complete pair-wise questionnaires. In order to choose respondents in this research is by considering their understanding about zakat development. The amount of respondent consists of seven experts related to the topic discussed. There is no maximum or minimum quotes to choose respondent, the most important things to be considered is they must have good ability and good understanding about zakat problem.
This study applies Analytic Hierarchy Process (AHP) methodology in two steps. First, develop an appropriate AHP network and relevant questionnaires to glean the necessary data from experts and academician of zakat. Second, AHP analysis is applied to set priority of zakat principles and essential criteria's.
Today, AHP is part of ANP. Analytic Network Process (ANP) is a mathematic theory that allows one to deal systematically with dependence and feedback and that can capture and combine tangible and intangible factors by using ration scale.
ANP as a general theory of relative measurement is also used to derive composite priority ratio from individual ratio scale reflecting relative measurement of interconnected elements within control criteria. ANP is a new approach in decision making process that provides general framework in treating decision without making any assumption about independency of elements in higher level from elements in lower level and about independency of elements within the same level. will be known which ones should be a priority to do, especially in Indonesia, and it will be known that the most important priority of every principle of the ZCP.
The results showed that the priorities contained in the ZCP principle consists of: 1. Regulation, consists of (1) objective, independen and power, (2) permissible activities, and (3) licensing criteria.
From the above data, it can be formed on the model hierarchy of ZCP for zakat institution in Indonesia with the Analytic Hierarchy Process approach (It can be seen in Figure 1)

RESULT & DISCUSSION
Based on the consensus of all respondents academic experts, it can be found that the five principles of ZCP, there is a top priority that can be done in the management of zakat institution in Indonesia.
The first principle is regulation. The most important priority for the principle of regulation is "licensing criteria". It is important to do because to be a good zakat institution must meet the requirements set by the government, so that all forms of licensing required by the government should do well. This is intended to prevent the institutions that manage zakat is not good, because zakat institutions will deal directly with the public so that the responsibility is very great.
The second priority is "permissible activities". This is an important priority for the second because of all activities undertaken by the zakat institutions 283 must obtain permission from the regulator (government) to avoid activity that is prohibited by law and religion. So if the government found zakat institution whose activities were prohibited, then the permissions will be revoked and institutions can not operate anymore. It is a form of regulation of commitment in order to create good institutions. The third priority is "objective, independence and powers". Zakat institutions should run its operations with the objective without selfish interests of certain parties because responsibility is to the public institutions, especially mustahik zakat distribute their zakat to the institution. Moreover, zakat institution must also have the strength and independence of institutions that can sustain itself with its financial strength so it will not lean towards certain parties. For more details about other priorities can be seen in Figure 2.

Figure 2. Priorities of Regulation
The second principle of ZCP for zakat institution is supervision. In order to achieve the principle of supervision, then the main priorities that must be done is "good amil governance". This priority is very important because the good zakat institutions governance (good amil governance) is essential in order to manage zakat institution professionals. Zakat institution just like other institutions should follow the good corporate governance (GCG) to avoid the abuse of authority of each officer, and this will make it easier to conduct surveillance.
The second priorities is "supervisory technique and tools". To achieve good zakat institution, it would require a good monitoring technique is accompanied by a device to conduct surveillance. People who will serve as supervisors must be people who have mastered the technique of good supervision, especially those who have had experience as supervisor of both zakat institutions and non zakat institution. It is becoming form of maximization of internal control zakat institution.
The third priorities is "supervisory approach". That supervision must be based on a good approach. Suppose zakat institution supervisory agency is based on the approach of governance or distribution approach. So in conducting surveillance, the agency will give priority in accordance with the approach used. It is towards achieving the vision of the zakat institution. Even more important is the monitoring conducted in an orderly and each manager do his job in accordance  Figure 3.

Figure 3. Priorities of Supervision
The third principle of ZCP is Collection and Disbursement Management.
There are two priorities namely Collection Management and Disbursement Management. Of these priorities, the first priority should be done to improve the Collection and Disbursement Management zakat institution of "disbursement management". To increase public confidence in the zakat institution, then that should be prioritized, namely the distribution of zakat. so necessary among the best ways to be right on mustahik zakat distribution of zakat. This is the toughest challenge for charity institution for reasons muzakki to not distribute zakat through the agency is due to a lack of confidence in distributing zakat funds. So that would be the biggest mistake if the distribution of zakat funds are misdirected and will harm muzakki.
The second priorities is "collection management". Institutions should be able to collect zakat on zakat potential is huge, especially in Indonesia. so that zakat funds can be absorbed, however, the organization must create ways to facilitate mustahik in distributing zakat funds to the institution. For more details about other priorities can be seen in Figure 4. http://journal.uinjkt.ac.id/index.php/esensi DOI: 10.15408/ess.v7i2.5275

Figure 4. Priorities of Collection and Disbursement Management
The fourth principle of ZCP is risk management. The main priorities should be done on aspects of risk management is "muzakki loss of reputation and risks".
To carry out operations zakat institutions should run good risk management, if this is done continuously, it will create a cozy atmosphere and a culture of good work.
the result is muzakki will trust institution to the trade-off is the institution will also provide the best service in the trust received from muzakki in order to minimize the risk of losses for muzakki.
The second priorities is "country and transfer risk". The second priority is very important because in order to minimize the risk to the institution of zakat the state should be able to become the supporting institution in the event of something unexpected. That in practice, zakat institution must conduct a cooperation agreement with the country in many ways and one of them in risk management.
The third priorities is "disbursement risk". Zakat institutions must create a distribution plan in accordance with kriteris mustahik charity, and this became the greatest responsibility as Amilin zakat institution. Economic equality is an important factor in the framework of the distribution of zakat. Therefore, it needs a good program with the involvement of the government in order to know which one is more of a priority for the distribution of zakat. This can minimize the risk of error distribution. For more details about other priorities can be seen in Figure 5.

Figure 5. Priorities of Risk Management
The fifth principle of ZCP is audit and transparency. The main priorities should be done on the principle of audit and transparency is "sharia control and internal audit". On this priority, the internal audit function is essential for all forms of misappropriation or fraud is a bad form of internal audit. Therefore, it should be established a clear framework in creating audit procedures (control). Examination of not only the financial aspect but also conducted on aspects of sharia compliance.
So if the internal audit and audit sharia can run well then the institution will be easier to provide transparent information.
The second priorities is "disclosure and transparency". Any activities carried out by the institution of zakat must be disclosed in periodic reports, because of the disclosure is a form of accountability. Disclosure regarding the activities of collection and distribution of zakat is the responsibility of the institution to the community and should be disclosed in order to form transparency will increase trust mustahik to the institutions that will eventually be recognized for the existence of the agency.
The third priorities is "financial reporting and external auditors". The financial statements must be prepared in accordance with applicable accounting standards. In Indonesia, accounting standards concerning zakat institution referred to in Financial Accounting Standar of Sharia issued by the agency accounting profession. Therefore zakat institution shall make good financial http://journal.uinjkt.ac.id/index.php/esensi DOI: 10.15408/ess.v7i2.5275 statements and conducted an audit of the financial statements in order to provide reasonable information to the public. So that people can trust that the zakat institution manages funds that are deposited with the good. For more details about other priorities can be seen in Figure 6.   From the five principles above, it was found that the first principle is the most important thing to do is regulation. This is because the regulation will not give permission for the operation of zakat institution, so that good regulation determines the quality of the institution of zakat. Government should make strict rules that every institution has a responsibility zakat established good because zakat institution is not a financial institution that is a profit-oriented, but oriented institutions in the interests of the people. While the second order, namely Audit and transparency. In order to give the public confidence in the khususnys muzakki, then any activity carried out by the institution of zakat must be audited in order to be found in case of misuse of funds, the audit carried out on the financial side and on the side of the sharia. In addition, each activity must be informed in a transparent manner so that the public trust operations zakat institution. For more comprehensive calculation about the priorities of Zakat Core Principles criteria, can be seen on the Table 2.
From regulation perspective, to improve the quality of regulation, then the zakat institution must have a supervisor who has a good mission. that is able to work with high quality and given credence. The zakat supervisor has the power to: obtain full access to zakat institution, review overall activities and impose appropriate corrections. In addition, source of zakatable items must be clearly determined in the zakat act to avoid wrong action. in order to increase the professionalism of the institution, the zakat act identifies the authority responsible for granting and withdrawing a licensed zakat institution and manpower. .so that the existence of zakat institution would be guaranteed by either.
In carrying out its functions, the zakat supervisor uses a methodology for assessing the risk of shari'ah issues, internal control environment, and the optimization of zakat management system. And also the zakat supervisor uses a clear framework of information system and strategic tools to regularly assess the processing-monitoring of zakat management system. in practice, zakat management institutions must be proactive to the supervisor, because zakat supervisor has the power to require zakat institutions to submit supervisory information on an accurate basis, such as their financial condition. If found errors or fraud The zakat supervisor imposes sanctions not only to the zakat institutions but, when and if necessary also to management. Therefore, Shari'ah law, regulations, and the zakat supervisor determine that the concept and definition of amil still can be applied in the current zakat institutions (Mannan, 2000).
In order to improve the quality of the collection of zakat, then the most important factor is the presence of a supervisor, because zakat supervisor will determine the period of collecting zakat. On the other hand to distribute zakat which has been obtained, The zakat supervisor requires that zakat institutions have a procedure to give a priority scale of the eight ashnaf. The poor (fuqara) and the needy (miskin) are the most important groups that must be given the first priority.
From risk management perspective, to reduce the risk in the management of zakat, The zakat supervisor determines policies & processes to identify, measure, evaluate, control, and mitigate country & transfer risk. The zakat supervisor also imposes prudential standards to identify, assess, evaluate, monitor, report, control, and mitigate reputation risk. As an institution that was given the mandate by mustahik zakat, then to mitigate misallocation of disbursement, the zakat institutions have a comprehensive assessment for each ashnaf. And this is important to do. So that the management unit should have proper methodology to identify, measure, mitigate and monitor the operational risk (Rusydiana and Devi, 2013).
The responsibility of the institution is able to demonstrate accountability through a report that can be published each period well. So in order to obtain a good report then shari'ah laws, regulations or the zakat supervisor require zakat institutions to have internal control frameworks (Shirazy, 1996). One way is to increase the supervisor function. Zakat supervisor has the power to establish the standard & scope of work for external audits that cover areas such as the asset valuations and the percentage of disbursement effectiveness. If everything has been done well, laws, regulations or the zakat supervisor require zakat institutions to publish periodic disclosures of information on a consolidated and it will be easy to do. Other important factors is Zakat act establishes the duties, responsibilities, and powers of the zakat supervisor related to the zakat supervision of internal controls and regulations regarding criminal activities, such as terrorism, money laundering, and corruption.

CONCLUSION
There are five core principles of charity principle, consisting of: regulation, supervision, collection and disbursement management, risk management, and audit and transparency. From these principles, the main priority is regulation http Board obtains timely and appropriate information on the classification of zakatable assets.
ZCP 9.7 The zakat supervisor should ensure that zakat institution has made the collection proactively. In order to achieve the primary objective of poverty alleviation, zakat institutions needs to prioritize a larger proportion of zakat fund than other charitable funds.