There are "severe shortcomings" in the state's treatment of elderly Holocaust survivors, according to a report released by the State Comptroller's Office on Wednesday. The report, which comes as the government is negotiating with survivors groups to increase stipends to needy Holocaust victims, blames red tape for preventing effective assistance and faults the Finance Ministry for delaying funding for state institutions that help victims of the Nazis. "Even though the treatment of Holocaust survivors requires special priority in light of the fact that this population is elderly, the conduct of state authorities is characterized many times by unnecessary delays, postponements and foot-dragging," the report said. "It is inconceivable for bureaucratic hurdles to delay the government's treatment of survivors," State Comptroller Micha Lindenstrauss wrote in the document. Survivors experience years of delays in processing their claims due to "outlandish bureaucratic obstacles" and a lack of manpower, according to the 32-page report. Approximately 143,000 of the 250,000 Holocaust survivors living in Israel are ineligible for state aid, the report found. Nearly a third of the country's survivors live in poverty, recent welfare reports have said, prompting growing calls for additional government assistance. While survivors receiving stipends from Germany get around NIS 2,400 a month, the report said, those getting assistance from Israel typically receive NIS 1,040 per month. The report singles out the Finance Ministry for withholding support for the country's main Holocaust survivors organization, the Welfare Fund for Holocaust Victims in Israel, delaying badly needed assistance to elderly survivors. In 2006, the Treasury's budget department was late in transferring NIS 21.6 million to the organization, leaving two-thirds of the money allocated unused until 2007. Representatives of Holocaust survivors praised the report and voiced the hope that it would help in negotiations with the government on increasing the stipends. "This report comes exactly at the right moment," said Noah Flug, chairman of the survivor groups' umbrella organization. "The comptroller's and society's biggest accomplishment will be if all the government offices act in accordance with what is written in this report." "There is no question that there will be a change in government policy, the only question is how big a change and when it will happen," said Shmuel Ranisch, a representative of the groups negotiating with the government. "The survivors have no time to wait." Moreover, the establishment of an organization to handle restitution of property belonging to victims and their heirs took excessively long, according to the report. The group is supposed to use unclaimed assets to help elderly Holocaust survivors. The report noted that after the group was established this year, eight months after legislation was approved calling for its creation, negotiations are still ongoing with various state institutions, including the Israel Lands Administration and the Custodian General - as well as with banks and universities. Hundreds of millions of dollars in assets belonging to Holocaust victims and their heirs has been held by state institutions for decades. Israel is "one of the last countries in the world" that has not acted to return such properties. Ishai Amrami, the director-general of the Israeli Organization for the Restitution of Assets of Holocaust Victims, said Wednesday he hoped that the Comptroller's Report would help the group finish negotiations with the institutions holding the properties. "We are trying to render historic justice and finish this issue once and for all," Amrami, a former director-general of Yad Vashem, said. "Everybody must understand that we are in a race against time," he said. An accord on increasing survivors' stipends is tentatively scheduled to be reached by Sunday, a deadline set by Prime Minister Ehud Olmert. Survivors groups recently rejected a proposed additional government stipend of NIS 83 per month for needy survivors, starting in 2008. The plan announced last month allocated NIS 130m. in additional assistance in the 2008 state budget, a sum to be doubled in 2009, and to reach more than NIS 300 million by 2011. Welfare and Social Services Minister Isaac Herzog expressed hope Wednesday that the Comptroller's Report would lead to an improvement in survivors' conditions. "The report shows what we in the government have claimed, that we inherited a heavy burden from previous governments that we are now dealing with," Herzog said. President Shimon Peres said that this was the first time that the government was taking such an intense interest in the issue. The state comptroller urged the government to act "generously, humanely and willingly, and out of a desire to ease the survivors' suffering" in their old age. "It is the legal and moral obligation of state authorities to act immediately, speedily and energetically to fix the shortcomings and improve the care of Holocaust survivors living among us," the report states. "Any delays and foot-dragging in dealing with these elderly people will hover over the conscience of the state." Greer Fay Cashman contributed to this report.