'Finance Ministry overly reliant on loan scheme'

The State Comptroller's Report reveals a Finance Ministry lacking oversight for NIS 29b. in loans.

May 8, 2013 16:44
2 minute read.
State Comptroller Joseph Shapira with Knesset Speaker Yuli Edelstein

State comptroller with Yuli edelshtein 370. (photo credit: Courtesy, Knesset Spokesperson)


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The Finance Ministry lacks oversight for NIS 29 billion in loans it has given out, either directly or through banks, the State Comptroller’s Report revealed on Wednesday.

According to the report, the ministry relied only on loan forms to account for the funds and needed an external auditor to oversee them.

Many of the unsupervised loans were in the field of housing. Of the loans given out through the World Zionist Organization’s Settlement Division, there were few or insufficient efforts to seek repayment for loans that were seven years overdue, amounting to NIS 813.6 million.

There were also unregistered loans from previous years that the ministry did not make attempts to recover.

Similarly, since 2001, the state stopped pursuing NIS 300m. in interest payments and NIS 324m. in fines for late repayment of loans made from the state endowment.

That all adds up to well over NIS 1b. in uncollected funds over the years, money that would ease the burden on the state’s stretched finances.

In housing, the report said the rate of support for subsidized mortgages to eligible recipients dropped 40 percent in recent years. Whereas the interest on subsidized loans was lower than the market average in 1998, in recent years it was notably higher.

Further, the definitions, outlines and interest-rate references in the Finance Ministry’s and Housing Ministry’s guidelines were found to be out of date. No staff-level work had been done to limit the size of loans or match them to current economic conditions.

“The management of the Finance Ministry and the Housing Ministry is one of the causes for the downward trend in eligible people taking advantage of housing loans, just as the hardship in housing is increasing,” the report said, noting that four years of supply-side efforts to improve the market had “not borne fruit.”

The two ministries needed to reevaluate the conditions for such loans, the report said.

Another section of the report blasted the Ashdod Port for paying out thousands of shekels in travel expenses for its former chairman’s vacation days.

In his three years as chairman of the board (May 2007-May 2011), Yaakov Raz spent 93 days abroad, at a cost of NIS 252,000 to the company. Of those, 77 were work days and 16 were marked as vacation, but Raz took lodging expenses and per diems for all of them. Many of the trips were not reported properly.

The report said the port was made aware of the findings in 2012 and accepted them.

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