The Finance Ministry pledged Tuesday to the Knesset State Comptrolling Committee that it would work to get to the bottom of wage irregularities and fraud at the Bank of Israel.
Deploring the bad example set for the rest of the public sector by the central bank as "damaging to the economy as a whole," the ministry's wage supervisor, Ozer Berkovitch, said the central bank's current management was cooperating fully with his efforts.
Following a Monday evening meeting with BOI Governor Stanley Fischer, Finance Minister Avraham Hirchson instructed Berkovitch to work with the Accountant-General's office to bring closure to the matter within 10 days.
"The Bank of Israel is a prestigious and central institution and, as such, proper management and meeting norms are of particular importance both inwardly and outwardly," said Committee Chairman MK Yuri Shtern, deploring the "deceit" revealed in the report released by State Comptroller Micha Lindenstrauss in early April.
Fischer told the committee that all irregularities described in the report were already being handled internally. When he came into office in May 2005, he said he "found a bank in crisis" following years of labor conflicts, sanctions, lawsuits, and disputes with the wage supervisor.
"The central bank of the State of Israel must not be managed in such a way," Fischer said.
Among the steps being taken is the initiation of external supervision of the bank's budget by an administrative council composed of the bank's governor and deputy and five external members appointed by the government, he told the committee. Furthermore, wages, severance payments, and special vacations were all cut before the report was released, he said.
"It is our responsibility to do everything to repair what requires fixing. We must maintain the professional level that characterized and still characterizes the bank. It is a great asset for the country and I fear that the attacks on the bank will weaken it professionally," Fischer told the committee.
Lindenstrauss said his office was "pleased" to see that all irregularities detected were already in the process of being repaired.
Berkovitch said he would work with the bank to return all ill-gotten money to the public coffers, and called on the bank to develop a "normative" wage model to shape the next generation of employees. He joined the Accountant-General's call for criminal proceedings to determine responsibility for incomplete statements and severance bonuses.
The Knesset State Comptrolling Committee will meet in four months to follow the progress on the matter, Shtern said, calling on Lindenstrauss to continue investigating the matter.