Finance: National budget mismanaged

State Comptroller Micha Lindenstrauss harshly criticized the management and utilization of the budgets allotted to the government ministries by the Finance Ministry's Budget Division and the General Accountant's Office in his report published Wednesday. "Despite the changes made in the budget over the course of the year, there are still many cases in which the budgets are not being utilized," Lindenstrauss stated in his annual report. "Since this conduct has been ongoing for years in the Finance Ministry, involving large amounts, the result is that the government budget is being managed without a precise presentation of the budget situation, which overshadows the transparency needed for the implementation of proper supervision and control," the report said. Shortcomings were found in the process of allotment, registration and supervision of the budget commitments in the General Accountant's Office. "There is no proper distribution of the commitments whether in the general or development budget, which is the cause for the inefficient management and utilization of the budgets," the report noted. The report also found that the Budget Division allowed the ministries to transfer unutilized budgets. As a result large amounts of surpluses were being transferred annually with the knowledge that they would not be utilized in the following year, and that they would need to be transferred as surpluses the year after. In each of the years between 2003 to 2005, budget surpluses which were transferred from the previous year enlarged the original budget by 6% to 7%. The report charged that there were deficiencies in part of the current procedures of the Budget Division which were not in line with the principles of transparency and were not allowing proper supervision to implement government policy and preserving the government's set of priorities. The report called upon the Budget Division to examine the reasons for the inaccuracies in the budgeting and to learn the lessons required to improve the budget planning and to reduce the amounts of unutilized budgets, as well as to minimize the changes throughout the year. The State Comptroller's Office recommended that the government initiate an administrative working plan to define authoritative terms regarding budget transfers between budget clauses. Among others, the administrative work plan should determine standards for situations in which changes regarding the set of preferences or budget cuts would come under the authority of the finance minister, or would request notification of the government or need its approval. The state comptroller also advised considering putting the rules and standards specified by the administrative work into legislation. The Finance Ministry's office did not comment on the findings and charges in the Comptroller's Report.