Ahead of Wednesday’s High Court hearing on the disputed transfer of funds to ultra-Orthodox (haredi) school networks, the Knesset Legal Department, filing on behalf of Finance Committee chairman Moshe Gafni and the committee itself, said the Finance Ministry acted unlawfully by advancing most of the money before obtaining the committee’s approval.
In an updated preliminary response submitted ahead of the hearing, the committee-side filing says there is “no room to accept” a practice in which the government approaches the Knesset for a budget transfer only after most of the funds included in it have already been distributed in practice. The filing says that conduct was unlawful, was never properly disclosed to the committee, and meant lawmakers were asked to decide without the full factual basis needed for an informed vote.
Money distributed before the committee vote
The case centers on a budget transfer approved by the Finance Committee on December 25, 2025, under which funds were shifted from various government ministries for education purposes, including to haredi educational institutions. The petitions were filed by Yesh Atid lawmakers and the Hiddush NGO together with Democrats MK Naama Lazimi,and were later heard together. At the January 8 hearing, it emerged that most of the money had already been distributed before the committee vote, prompting sharp criticism from the bench and an interim order freezing further transfers.
That fight has run alongside a broader legal battle over state funding for the two main party-affiliated haredi school networks. In February, the High Court ordered the state to explain why full public funding continues to flow to those networks even though petitioners say they do not meet basic core-curriculum, teacher-qualification, and oversight requirements.
In the new filing, however, the Knesset-side respondents draw a distinction between condemning the process and endorsing the petitioners’ full remedy. On the one hand, the filing says the Finance Committee’s decision was made without essential information because members were not told they were effectively being asked to approve funds that had already been distributed. On the other hand, it argues there is now a significant practical difficulty in canceling the decision outright because doing so could effectively strip wages from employees whose salaries were already paid.
For that reason, the filing stops short of joining the petitioners’ demand to unwind the transfers retroactively. Instead, it asks for forward-looking relief: a court order making clear that the government may not continue using the same practice in future cases. The Knesset’s position is that workers should not be forced to repay salaries already received because of what it calls the Finance Ministry’s flawed conduct.
The response is also notable for its description of repeated but largely unanswered attempts by the Knesset’s legal advisers to obtain fuller information from the Finance Ministry after the January hearing.
According to the filing, the Knesset legal adviser wrote to the ministry on January 8 seeking detailed information about the alleged practice of transferring funds before committee approval, including how often it had been used over the previous five years.
Follow-up letters were sent on January 21 and February 9. But only late on March 19, after the government had already filed its own updated response and after the Knesset-side response had effectively been finalized, did the ministry’s legal adviser reply – with what the filing describes as a technical and laconic letter that did not address the substance of the issue.
The filing says that lack of information left the Knesset unable to fully assess the scope of the practice, its broader implications, or how the government intends to proceed in comparable cases. It adds that such non-disclosure undermines parliamentary oversight in one of the core areas of the relationship between the legislature and the executive: control over the state budget.
Delayed disclosure won't heal the root legal flaw
The Knesset-side respondents also reject the government’s apparent position that the defect can be cured going forward simply by disclosing more clearly when funds were paid before approval. In the filing, the Knesset says such disclosure would not heal the root legal flaw because the law requires prior committee approval for budget changes of this kind. It argues the government should have gone to the committee in advance, rather than letting the money go out first and asking for approval afterward.
Accordingly, the filing says that from now on the Finance Committee will not handle transfer requests unless it is made explicit whether the funds in question have already been distributed or are expected to be paid before committee approval. If a request reveals that the funds were already paid out, the committee’s legal advisers say they will tell lawmakers the request suffers from a serious legal defect and should not be discussed or approved.
The filing further takes aim at the government’s justification that it had to balance the requirement of prior committee approval against the legal obligation to avoid delaying employees’ wages.
The Knesset says that explanation does not answer the more basic question of why the Finance Ministry failed to approach the committee in advance, when doing so could have prevented the legal collision in the first place. It describes the conduct as reflecting deep disregard for the law and says the government still has not clearly committed not to repeat the practice.
Wednesday’s hearing is expected to focus not only on the specific December 2025 transfer, but on a broader constitutional question: whether the executive can create budgetary facts on the ground and seek parliamentary approval only afterward, or whether such conduct fatally undermines the Knesset’s supervisory role over public spending.