State Comptroller Yosef Shapira submitted his annual report on Monday criticizing and recommending changes to 17 areas of government and institutions with significant public impact.

In his overview, Shapira said criticism and review by his office is “at the heart of democracy and of guaranteeing that governance” is carried out according to the policies actually specified by law. He noted that democracy requires oversight of its institutions to ensure that its values, including “stable governance, equality, high ethics standards” are preserved.

On one hand, the report analyzed problematic trends and opportunities for improvement among issues that get relatively marginal attention, from tax to transportation issues. On the other hand, it also broached issues that garner more coverage, such as the country’s lack of an air-based firefighting capability, serious overpricing and undersupply in the energy sector, and the development and security of the burgeoning natural gas sector.

In its discussion of the founding of an aerial firefighting capability, the report said that “as clear as the need has been over the years to strengthen the air firefighting system in Israel, recommendations by the prime minister to make such changes have not been carried out.”

The section – a continuation of the June 2012 State Comptroller’s Report on the Carmel fire that detailed glaring failures by Israel’s leadership, as well as police and rescue services – pointed out that since the government made the decision in 2002 to cancel the use of IDF helicopters in aerial firefighting, “not only has the capability to fight wildfires from the air not improved, the ability has weakened and no meaningful changes have been made.”

The same section also stated that an aerial firefighting unit founded by the Israel Air Force in May 2011 did not undergo the extensive operational examinations needed to gauge its ability to be effectively deployed in the event of a wildfire.

Regarding the energy sector, Shapira determined that many deficiencies pervade the decision- making among all those involved with Israel’s electricity supply for the future.

The shortcomings have arisen from predominantly short-term planning in the electricity sector, without an overarching vision – and involve repeated approval of emergency plans and continual imposition of financial burdens upon consumers, according to Shapira.

The Energy and Water Ministry agreed that there is a fundamental problem with managing the electricity sector.

Since he assumed office, Energy and Water Minister Uzi Landau has concerned himself with the issues of decentralization and governance of the power sector, according to the ministry.

In the water sector, the state comptroller reviewed how the Water Authority sets its rates for water and sewage – rates that since a reform in January 2010 have risen by 30 percent. Based on the reform, local authorities also had to build their own water companies.

The domestic consumer water tariff is two-pronged – a lower rate for a basic amount of water use and a higher rate for water consumed beyond that amount. However, the process for determining what the basic quantity should be is flawed and has not undergone thorough examinations of factors that affect national per capita consumption, according to Shapira.

Consequently, there was no solid basis for determining that the basic amount was 2.5 cubic meters of water for a year and a half beginning in January 2010, or the determination of 3.5 cubic meters per capita per month in July 2011, he explained.

The report also discussed a number of other issues, including a review of the compensation fund administered by the Tax Authority for its financial readiness to assist the public and its institutions financially in the event of major natural disasters such as earthquakes.

The review was not limited to natural disasters, and also assessed the fund’s soundness in the event of widespread economic damage due to terror attacks or war.

In the broader context, this review followed conclusions from 2008 and from an original report dating back to 1997, which said the funds available and preparations made were deficient for coping with disaster situations.

Regarding other financial aspects of the government operations, the report reviewed the appointment process for accountants, and general financial oversight of legal advisers to a number of governmental bodies.

One serious problem highlighted by the report was that the NIS 3.4 billion set aside for relief in the event of war is grossly inadequate, and that in general, the authority has not been properly filing reports or showing a serious enough commitment to fulfilling its mission.

The report also singled out both the Education and the Transportation Ministries for not being properly prepared or setting aside sufficient funds for infrastructure damages from a large earthquake.

Yet another issue assessed by the comptroller was defects in the operations of the Government Corporations Authority.

He found that the authority failed to publish all of the qualifications required for applying for certain key positions, even as a senior official changed the requirements.

When due diligence and checks were required, the authority accepted signed affirmations while failing to ensure that the procedures had been carried out.

In addition, it was noted that previously suggested reforms regarding accounting and other practices – to bring them more in line with practices in the US – had not been implemented.

The authority had also made significant structural changes without proper oversight, debate and review. It had also not produced an ethics code, as previously recommended.

With regard to tax evasion, the report said that the Tax Authority has not properly enforced a policy of fines on those who evade paying their taxes. In some cases, no fine was imposed, in others a fine was imposed where an indictment should have been filed, and in others an indictment was filed where a fine should have been imposed. In general, the set criteria proposed for dealing with tax evasion in 2006 have been ignored.

The report also touched on intellectual property issues in the universities and exchange rate policy.

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