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