A presentation by the Ministry of Finance reveals the first details of the oversight mechanisms that Finance Minister Smotrich and the government want to establish over local authorities, in order to prevent the leakage of funds to criminal elements. Although the new outline is proposed against the backdrop of the public uproar over Smotrich's demand to transfer funds to Arab authorities only after their oversight mechanisms are established, according to government sources, it appears that they will also apply to Jewish authorities.
According to the presentation, the police, the Shin Bet and the Ministry of the Interior will formulate a level of the authorities so that they will be divided according to a traffic light plan. A red authority will be defined as one in which many criminal elements are involved and will receive a tight monitoring mechanism; A yellow authority with less involvement of criminal elements will receive partial supervision; And a green authority that is free of the involvement of criminal elements will be conducted under light supervision.
Minister of Finance Smotrich, photo: Oren Ben Hakon
According to the presentation, supervision will also be over development funds to the authorities, such as infrastructure funds and a five-year plan, as well as the current budget. Supervision will be over tenders issued by the local authority and not over things it operates itself.
In the first stage, the Shin Bet, the police, the Tax Authority, the Money Laundering Prohibition Authority, the Ministry of the Interior and the Ministry of Justice will formulate an intelligence picture for classifying the authorities according to the traffic light. They will also formulate an intelligence picture of contractors and suppliers who will be blacklisted, according to which they will not be able to access tenders at all in the civil service and in the authorities.
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In red municipalities, there will be a government entity that will control the tenders and budgets committee of the authority, and there will be a designated and independent bank account for the budgets of the authorities. In fact, this is a real takeover of the PA's tenders by a government entity.
The scene where five were murdered in the village of Yafia, photo: Michel Dot Com
The yellow municipalities will have a designated bank account with two authorized signatories (one of them on behalf of the treasury), and in areas that are concerned, such as garbage removal, transportation and other services, the budget will pass only through the mechanisms outside the local authority.
A green authority will have easy mechanisms that will also apply to yellow and red authorities, which are in fact money transfers via bank transfer or clearing house, without checks and cash, with digital invoices and transparent tenders.
The traffic light plan, photo: GETTY
The difficulties along the way
The main challenge is actually formulating the intelligence picture. The police should allow the government and the Treasury to use information without compromising investigations and revealing information. Another challenge is actually the ability of the Ministry of Justice to use this information to paint authorities according to traffic lights and disqualify suppliers from bidding. The challenge is to translate the intelligence picture into legally admissible evidence, since there is a violation of the contractors' rights.
The Justice Ministry is still considering whether specific legislation is needed. The direction is that this will be done in the form of administrative prevention, so that the contractors will not be punished but their candidacy for tenders will be thwarted on the basis of intelligence information.
Members of the Hirsch Report in the previous government, who also tried to classify the authorities in favor of the mechanisms, said police told them that contractors could be classified as criminals but not authorities. The government rejects this claim and says it can be done and that the police are mobilized after discussions in recent weeks.
What has changed?
The previous government and the opposition criticized Smotrich, claiming that they too had oversight mechanisms according to the Hirsch Report and that the finance minister had not studied them at all. Israel Hayom learned that the Hirsch Report was not implemented at the time, because the government fell and did not have time to implement the solutions it proposed. However, some of the mechanisms proposed in the Hirsch Report were adopted in Smotrich's current plan.
In addition, the Hirsch Report dealt only with NIS 670 million of the development budget supplementary to the five-year plan of the Arab sector and did not deal with the current budget of the authorities. In the current budget, Hirsch's Director General's circular was issued, in which there was a mechanism whereby the head of the local authority and the treasurer of the authority would sign a declaration that there had indeed been an increase in the services for which their current budget was intended.
Yair Hirsch, Photo: Mickey Ben Ari Mizrahi
Smotrich aspires to bring the oversight mechanisms to a government decision in two weeks. In addition, last week's Ministerial Committee for Combating Crime in Arab Society decided to promote a comprehensive law to combat crime in Arab society that would also give the government tools for enforcement in the economic sphere.
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