The Knesset Plenum
Photo: Yoav Dudkevitch
Report: MKs vote unawares on budgetary reserves
Report by State Comptroller Shapira finds budgetary reserves in state budget not clearly delineated, MKs forced to vote on them without having any idea as to their purpose; sums not divulged to MKs in excess of NIS 10 billion, report says; MK Shaffir: 'Treasury's claims of 'no money' a lie; Treasury: 'Budgetary reserves an accepted tool for risk management.'
The Finance Ministry was intentionally misleading the Knesset's Finance Committee, a report by State Comptroller Yosef Shapira published Tuesday determined. In a chapter dealing with managing the government's budgetary reserves,
the report stated some of them were not divulged to the Knesset while the budget was being approved.
According to the state comptroller's report, the deception was prolonged. In a line item marked "miscellaneous expenses," for instance, many programs and regulations were found to have been budgeted with considerable sums, despite the fact that their designation was not clear from their names.
"The portion of the reserve in the 2018 budget not divulged to the Knesset was 2.3 percent (equal to NIS 10 billion—ed) of the state's overall budget," the report said. "From 2005 through 2017, the rate of reserves not made known reached 50 percent or more of the reserve budgets contained in the state budget."
Only recently did Zionist Union MK Stav Shaffir appeal to the High Court against what she called a lack of transparency in the information submitted to the MKs who are supposed to vote on the state's budget.
The Knesset Plenum. MKs had no knowledge of what they were voting on, the report said (Photo: Alex Kolomoisky)
Moreover, the 2013-2018 budgetary bills all neglected to include any explanation as to the "miscellaneous expenses" item, which effectively meant MKs were asked to approve expenses whose purpose they had no knowledge of.
The report then went on to recommend regulating the reserves into the basic budget bill, and to separately classify reserve regulations set aside to finance unexpected eventualities, or for uses not accounted for in the original budget—such as Operation Protective Edge or an outbreak of avian flu.
The state comptroller also called on the Finance Ministry's Budgets Department to present ministers with the budgetary reserve and the manner in which it will be divvied up, as well as its impact on different budgetary items.
State Comptroller Shapira said the Finance Ministry should be more transparent in the manner in which it presents budgetary reserves (Photo: Gil Yohanan)
Shapira further recommended to "set a reserve mechanism to temporarily house funds for implementation of political and coalition agreements that have not yet been assigned implementation plans—without making use of budgetary reserve for purposes other than its designation."
He also said that "transparency on the manner reserves are budgeted should be increased during the budget approval process in the Knesset, with a complete picture of reserves presented (to MKs) including their type, purposes and amount."
It should be noted that general reserve funds are also used to fund Shin Bet and Mossad activities, with said particulars of said funds not being reported to MKs.
MK Shaffir said Tuesday, "For years, the Treasury has come up with a secret system of reducing the state's investment in services for its citizens by secreting away budget in cashboxes that go unreported to the public and unused (by the Knesset).
MK Shaffir said the report proved her claims of the Treasury lying to the public (Photo: Alex Kolomoisky)
"While Israeli citizens pay taxes through the nose and receive pathetic social services in return, the Treasury tells them that there's 'no money,' which has now been revealed by the report to be a complete lie.
"The state comptroller has corroborated my allegations against the Finance Ministry, which I have been making since I was elected, and provided moral support for the petition I submitted against this conduct, which disparages both the public's funds and its rights."
The Finance Ministry offered comment, saying, "Using budgetary reserves is an accepted tool for risk management and maintaining flexibility. The requisite conclusions will be drawn to make the budget's data more accessible."
