In an ideal world, cash deposited in authorities funds could be used just for the needs for which the funds have been arrange. Nevertheless, because the State Comptroller’s report printed in the present day reveals, the Ministry of Finance manages statutory funds in a problematic method. The funds, State Comptroller Matanyahu Englman finds, are used for functions apart from their authentic goals, generally as a small money reserve to plug holes within the funds. There is no such thing as a orderly listing of all of the funds and their quantities, and a good portion of the funds will not be managed correctly.
The State Comptroller says, “The Funds Division has in a number of circumstances used funds left unused in budgetary capital funds to unravel fiscal issues by diverting their budgetary sources for different makes use of, and in return, it has licensed a dedication in the identical quantity for the fund’s profit.” A distinguished instance of that is the diversion of funds from the Cleansing Fund (a statutory fund for cleansing and preserving buildings), totaling NIS 2.26 billion in 2016-2021. So far as is thought, this technique of operation continued afterwards, however was not examined by the State Comptroller.
In keeping with the Comptroller’s report, “This motion serves as a one-time resolution with out creating long-term options for fiscal issues and causes the fiscal drawback to be postponed till the following yr by which the authorization to commit could be exercised.” The Comptroller provides, “The usage of funds for different functions, which have been outlined as the needs of the funds, as occurred, for instance, within the Cleansing Fund, was carried out and not using a uniform mechanism and in accordance with choices of varied ranges, thereby harming the needs for which the capital funds have been established and appropriated from the state funds.”
The report signifies a systemic failure within the definitions and administration of presidency capital funds. The Funds Division doesn’t keep an inventory of the quantity and scope of the budgetary funds, regardless that a few of them are statutory. On the identical time, the Accountant Common’s Division on the Ministry of Finance maintains an inventory of 54 extra-budgetary capital funds and third-party deposits, and not using a clear distinction between them, totaling about NIS 44.4 billion, however in its monetary statements it experiences solely 16 capital funds totaling about NIS 36 billion.
One other deficiency famous by the State Comptroller is that the Accountant Common manages 38 funds totaling NIS 8 billion, which have been labeled as liabilities for accounting functions, regardless that a few of them could also be capital funds that ought to be offered as a part of capital. This determine displays the shortage of transparency in monetary administration.
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Lack of uniformity in definitions
The State Comptroller concludes, “This suggests that the Ministry of Finance doesn’t have correct data on budgetary funds and extra-budgetary funds.” It additionally discovered, “The Accountant Common Division doesn’t have an inventory of all budgetary capital funds, regardless that the necessity for a whole listing of all capital funds arose within the Division as early as 2007, as a result of must listing them in monetary statements.”
One other drawback, the report finds, is the shortage of uniformity in definitions. The Accountant Common Division outlined the phrases “fund”, “budgetary fund” and “extra-budgetary fund” in a 2011 directive. Nevertheless, vital variations have been discovered between the Accountant Common Division and the Funds Division when it comes to how the phrases are outlined. Variations have been additionally discovered between the definitions within the Accountant Common Division directive and the accounting definitions utilized in follow by the Division. Examples of capital funds that undergo from this lack of uniformity are the Automobile Fund, the IDF Camp Relocation Fund, and the Metro Fund.
One other worrying determine rising from the report considerations the Property Tax Compensation Fund. On the finish of 2023, after the outbreak of the warfare, greater than NIS 4 billion was withdrawn from this fund. The Comptroller notes, “Because the warfare continues and rules are expanded, together with the addition of additional standards, there may be doubt concerning the fund’s skill to satisfy the obligations created because of this, inside the present accumulation framework, with out rising it.” He mentions {that a} comparable remark was already made within the State Comptroller’s report in 2012 that referred to wreck within the Second Lebanon Warfare.
As a result of findings, the State Comptroller insists, “Administration of the Ministry of Finance, together with the Funds Division and the Accounting Division, should reexamine the usage of the fund mechanism, the necessity it fulfills, its scope, and the numerous improve in its use.” “The State Comptroller added that the related divisions should “kind a uniform define for outlining capital funds, for his or her institution, their traits, and for coordinating data concerning their scope and monitoring always, together with the style of their full registration.”
Revealed by Globes, Israel enterprise information – en.globes.co.il – on Could 6, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
