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Haredi school system should not receive aid, opposition says – Israel News
The opposition coordinator in Israel’s Knesset Finance Committee, MK Vladimir Beliak (Yesh Atid), on Thursday criticized reports that Prime Minister Benjamin Netanyahu had promised to help a large haredi school system affiliated with United Torah Judaism MK and Knesset Finance Committee Chairman MK Moshe Gafniwho is currently under legal investigation for financial mismanagement.
In a post on X, Beliak wrote that he had received “increasing reports” that Netanyahu had promised to find funding for help the haredi private school system known as Hinuch Ha’atzmai (literally “Independent Education”) pays its employees’ salaries and social security benefits for the month of July.
O school system has been in financial trouble since a February report by Finance Ministry Accountant General Yahali Rotenberg exposed a series of financial irregularities. Beliak accused the prime minister of trying to illegally help the school system to avoid a political break with his political ally, at least until the end of the Knesset’s summer session on July 28.
Beliak warned the “prime minister’s office, the head of the Knesset Finance Committee (Gafni) and all those involved in the matter – we are following closely. We will comb through every relevant transfer (of funds) that reaches the finance committee with an iron comb. We will conduct an uncompromising professional, parliamentary and legal fight, reflect the reality and update regularly,” Beliak wrote. Moshe Gafni, Aryeh Deri (credit: Flash 90-)
Gafni threatened a few weeks ago to resign from his post as chairman of the Knesset Finance Committee if a solution was not found to save the school system from bankruptcy, and failure to do so could lead to a political rupture in the coalition. This could happen regardless of another crisis over the end of the haredi exemption from IDF service.
Financial mismanagement led to schools being unable to pay salaries
Despite being privately run, Hinuch Atzmai and its Shas-run counterpart, Bnei Yosef, enjoy special legal status and receive full state funding. Both systems have received over NIS three billion annually in state funding over the past few years, and share characteristics with government agencies – they are directly connected to the government’s MERKAVA funding system, and they employ an accountant appointed by the finance ministry to manage their finances. However, these school systems are not subject to the same level of oversight as public schools. The presence of the publicly appointed accountant has allowed the systems to avoid effective financial scrutiny, as they have argued that their finances are managed by the state and therefore not their responsibility.
However, the February report found that Hinuch Haatzmai had ignored its accountant and accumulated a tax debt of more than NIS 80 million, and another report found that the school system had accumulated additional operating debts of more than NIS 300 million. Hinuch Haatzmai is also facing dozens of challenges in court, including six class-action lawsuits over alleged violations of employee rights, including unexplained wage deductions, unpaid work hours, and more. These legal challenges could lead to hundreds of millions of shekels of additional debt.
As a result, Hinuch Haatzmai suffered a foreclosure in May, and initially was unable to pay its employees’ salaries in June. The Finance Ministry agreed to lend the necessary funds for June, but the system now faces the same challenge for July.
Rotenberg threatened in February that if a solution was not found by July 1, the Hinuch Atzmai and Bnei Yosef school systems would be disconnected from the government’s MERKAVA funding system, and the finance ministry would remove their accountant. This would force the systems to employ independent financial management and assume full liability if they failed to meet tax requirements and financial commitments.
However, the Minister of Finance Bezalel Smotrich, Education Minister Haim Biton (Shas) and representatives of the Justice Ministry have been trying in recent weeks to reach an agreement that would lead to tighter oversight of the systems while keeping them financially afloat through full state funding. FINANCE MINISTRY representatives argued that if this did not happen, Hinuch Hatzmai, which has more than 100,000 students and thousands of employees, would collapse, and the state would need to intervene anyway.
Members of the opposition have objected to such an arrangement, as has the Movement for Quality Government in Israel (MQG). In a letter dated July 2 to Rotenberg, Biton, Finance Ministry legal adviser Asi Messing, Attorney General Gali Baharav-Miara and State Comptroller Matanyahu Englman, the MQG asked the Finance Ministry to “publish clarifications on the arrangement that has been made, the alternatives that have been examined and the implications for the state coffers.”
In an accompanying statement, the MQG said: “The new agreement, the details of which have not yet been officially published, which is expected to include disconnecting educational networks from the government’s Merkava system, opening separate bank accounts and hiring accountants to oversee budget management, could even worsen the situation.”
The MQG listed what it considered five problems with the agreement:
First was the “lack of substantial reform.” According to the MQG, “The agreement does not include significant structural or financial changes in the running of the networks.”
The second was “continued unlimited funding.” MQG argued that “despite repeated warnings from the Accountant General and Attorney General, the agreement continues to allow the funding of partisan private education networks without a complete disconnect from government budgets and without a plan to pay down their debts.”
The MQG described the third problem as “increased state liability without compensation.” According to the MQG, under the new arrangement, “the state assumes additional responsibility for the conduct of the networks, without requiring them to act in accordance with the rules of proper administration and the curricula of the ministry of education.”
The fourth problem, according to MQG, was the “lack of transparency”, as “the details of the agreement and its consequences for the public were not officially published, which raises serious concerns about the integrity of the process”.
Finally, the MQG highlighted that Biton himself was the former manager of Bnei Yosef and therefore had a conflict of interest and should not have been involved in the negotiations.
The MQG proposed the following steps:
“1. Full and transparent publication of the details of the arrangement being worked out; 2. Establishment of a government committee of inquiry to examine the range of relationships between the state and party-political education networks; 3. Re-examination of the funding model, incorporating the principles of transparency, equality and good governance; 4. Preventing the involvement of those with a conflict of interest in the decision-making process; and 5. Creating a long-term plan to put the networks on a proper footing and implement uniform standards across the education system.”
Gafni’s office said in response to a question from the Jerusalem Post that it was “not aware” of the matter. The prime minister’s office did not respond.