Millions transferred to haredi schools without Knesset approval, state admits to court

The hearing, before Supreme Court Justices Yael Willner, Ofer Grosskopf, and Gila Kanfi-Steinitz, focused on the legality of advancing budgetary transfers prior to statutory approval and on the meaning of parliamentary oversight when lawmakers are asked to ratify decisions already implemented.

The case was brought by Hiddush - Freedom of Religion and Equality, together with Democrats MK Naama Lazimi, and was consolidated with a petition filed by Yesh Atid. The petitions challenge the Finance Committee’s approval of transfers totaling roughly NIS 800 million to the main party-linked haredi school networks, part of a broader package of reallocations to religious education frameworks that exceeds NIS 1 billion.

During the hearing, a state representative acknowledged that a significant portion of the funds had already been transferred prior to the Finance Committee discussion. Willner pressed the state on the legal authority for moving funds without prior approval, describing the practice as unlawful and questioning what significance remained to the committee’s deliberations if the transfers were already executed.

Wilner also criticized the absence of key documentation, rebuking representatives of the Knesset for arriving without the Finance Committee protocol. “The protocol is the heart of the matter,” she said, adding that a committee discussion held without disclosure that the funds had already been transferred amounted to a “sham” debate.

Kanfi-Steinitz questioned whether lawmakers had been presented with data regarding compliance with core curriculum requirements at the institutions receiving the funds. Counsel for the petitioners said such data had been requested but not provided.

The petitions argue that the reallocations were advanced through an improper procedure and without a sufficient factual foundation, including information on oversight, enforcement, and compliance with statutory conditions - particularly requirements relating to core studies. They further contend that transferring funds prior to committee approval undermines the Knesset’s supervisory role and frustrates the court’s ability to grant effective relief.

Following the hearing, Hiddush legal adviser Dr. Yifat Solel said the proceedings showed that the Education and Finance ministries had brought an approval request to the Finance Committee for funds that had already been transferred. She argued that the committee decision must be annulled and returned for renewed deliberation, and that remaining funds should not be released until the Education Ministry discloses full information regarding offsets and enforcement tied to noncompliance with core curriculum obligations.

Lazimi said the state had, for the first time, acknowledged transferring funds unlawfully prior to committee approval while withholding material information from lawmakers. She said she had requested the opening of a criminal investigation into the matter, calling the disclosure unprecedented and saying that warnings about unlawful conduct in the Education Ministry had been raised for years.

In a decision issued after the hearing, the court ordered the state to submit written responses to the petitions within seven days, with the petitioners permitted to file replies within seven days thereafter, and ruled that the interim order freezing the transfers will remain in effect until a further decision is made.