Gov't failed to estimate true cost of withdrawal

Original NIS 4.5 billion estimate ballooned to double that figure because of sloppy planning.

The government failed to properly debate and calculate the true cost of the evacuation of 25 settlements in Gaza and northern Samaria in August of 2005, according to charges laid out in the 2007 State Comptroller's Report. It noted that original cost estimations for the Disengagement Plan in the winter of 2004 spoke of NIS 4.5 billion, which had doubled and turned into NIS 9 billion by May of 2006. "Decision makers did not have exact figures about the budgetary needs," and were not properly briefed, the report stated. It blamed the problem largely on both the Ministerial Committee for Disengagement and the forum of directors-general that fed the committee information regarding the plan. According to the report, which was released for publication Wednesday, the forum should have presented a more general overview with complete financial considerations. At the same time, the ministerial committee should have picked up on the problem and demanded better information. The Treasury should have developed a mechanism to track all the funding as well. Even now, according to the report which was presented Wednesday to the Knesset, there is not enough information available to calculate the final cost of disengagement. The comptroller blamed a portion of the hike on the government's failure to initially address the resettlement costs not associated with personal reimbursements to the evacuees. In addition, financial considerations took a back seat to the diplomatic ones. Budgetary considerations should have been an important part of the decision making process when it came to weighing different implementation options, the report stated. Even when the plan first passed the cabinet in June 2004, according to the report, "the government knew that financing it [disengagement] required a large scale budget... After the government approved the disengagement plan, a high priority should have been given to budgetary considerations when weighing implementation options." This didn't happen. Decisions were made in a haphazard and piecemeal fashion that led to a budgetary hike of some NIS 2.4b. within half a year for evacuee assistance separate from personal compensation payments. In addition, no proper budgetary framework and limit was developed for all the aspects of the plan involved in taking the evacuees out of Gaza and northern Samaria. The setting of overall financial limits would have forced a more effective allocation of funds, according to the comptroller. It added that some of the transfer requests to the Prime Minister's Office violated proper financial procedure and made it hard to implement budgetary controls. While some of the uncalculated budget hike is attributable to military spending, which to date has reached NIS 2.5b., the report focused its attention on the decision making process with respect to additional civilian resettlement costs of NIS 2.4b. Included in this sum was NIS 210 million for hotel rooms where many of the evacuees were initially housed and NIS 775 million for temporary housing where most of the evacuees still live. According to the report, that NIS 2.4b. was the result of decisions made only after the initial disengagement budget passed the Knesset in March 2005. In that period, the focus was on the NIS 4.1b. set aside for personal compensation, of which it was expected that no more than NIS 2.5 to 3b. would actually be needed. While to date only some NIS 2.3b. has been given for personal compensation, it is expected, according to the comptroller's office, that at least the full NIS 4.1b. will be used. But the problem, according to the comptroller, was with the decisions about the temporary relocation of the evacuees until such time as permanent housing could be constructed for them. The government waited until April 2005 to start calculating the budgetary impact of temporary and communal relocation, even though, according to the report, it was known as early as June 2004 that such options could be necessary. While both the Disengagement Authority and the government spoke of this possibility, the Treasury did not know that such a need existed until April 2005. Up until then, it was under the impression that this cost was to be borne by the evacuees themselves. The Prime Minister's Office explained to the comptroller that it could not address these additional matters any earlier, because it lacked information from the evacuees. But according to the Treasury, the problem of overall budgetary planning for this aspect of disengagement still exists. It told the comptroller that, "To this day, and in spite of the fact that a budget of millions of shekels was approved for temporary and permanent living arrangements, no organized overall presentations were given" that took into account all the possibilities and all the financial implications. In addition, the comptroller blamed the Prime Minister's Office, The Disengagement Authority and the office of the state's assessor for failing to communicate and set criteria to evaluate evacuees' property. This failure, as well as the inability of the Hof Aza Regional Council to provide necessary information, led to unnecessary delays in settling compensation claims and providing the evacuees with the money owed them.