The Finance Ministry's capital market and savings division on Thursday revealed severe deficiencies in the management and evaluation processes of the most prominent provident funds. "The findings of the report point to fundamental deficiencies in keeping standards of sound management," said Yadin Antebi, the Finance Ministry's Supervisor of Capital Markets, Insurance and Savings. "Most of the focus and resources are spent on luring new clients and boosting activity and less time is spent on supervision, auditing and proper management." Antebi revealed grave malfunctioning in the conduct of the institution's directorates regarding supervision of the operations of the company and information system problems, to an extent that some processes were executed by hand rather than being computer processed. "At some of the institutions, for example, we found that annual reports included many mistakes and were inaccurate," the report stated without naming the companies in question. The report also found significant problems in the way some of the fund management reevaluated and priced assets or, in other words, that they had inflated their returns to appear more attractive to the public, which poured billions of shekels into the funds. Furthermore, the auditing systems for valuation of assets in many of the companies reviewed were found to be deficient. Other reported failures were found in the management, operation of investment committees, accountants, auditors and internal auditors of the companies involved. Antebi ordered the directorates of the institutional bodies to formulate a detailed work plan to correct errors and deficiencies and to intensify internal inspection and auditing processes to improve their assessment of risks. The provident fund management companies must complete the inspection by July 31, 2008. Last month, Antebi revealed that the fund management firms under critical review included Excellence Nessuah Provident, owned by Rony Biram, Gil Deutsch and the Israel Phoenix insurance company; Yalin Lapidot Provident Fund Management, owned by Dov Levine and Yair Lapidot; and Perfect Provident Fund, owned by Nir Malka and Yair Levinson.