Report: Regulation of defense budget lacking

Knesset Research and Information Center says better supervision, transparency needed for defense establishment financials

Zvi Lavi|Published: 11.04.11 , 08:42

The defense establishment's budget is lacking in transparency and requires better supervision by the Knesset, a report by the Knesset's Research and Information Center found.

The report was submitted to the Knesset's Finance Committee, which intends to use it as the platform for a budgetary panel. Defense Minister Ehud Barak and Finance Minister Yuval Steinitz will take part in the panel.

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The session was set after Barak suggested exceeding the 2012 defense budget by some NIS 7 billion (roughly $2 billion), in order to meet the military's needs, as well as some of the recommendations made by the Trajtenberg Committee for social reform.

The report found that the mechanism used to supervise the defense budget was lacking. It also found that the Defense Ministry and the Treasury should upgrade the secure channels used to review sensitive information, and suggested they find an alternative to the traditional, printed reports.

The Finance Ministry's Budget Division is not as involved in all aspects of the defense budgets as it should be, the report stated. The current administrative norm allows for some expenditures – amounting to tens of millions of dollars at times – to be noted only in the ministry's quarterly reports, without undergoing the Knesset's Finance Committee's review beforehand.

The system also allows the Defense Ministry to transfer considerable funds from one budgetary article to another by declaring them "allocated for classified needs."

"This system hinder the proper parliamentary monitoring of the budget… at times, it seems that the Defense Ministry defers large budgetary transfers simply to avoid the need to have them approved," the report said.

The report suggested a review of the Defense Ministry's outsourcing practices and also found "overall ambiguity in the budgetary planning," which it said "prevents true transparency."

"The committee "should review the reports submitted to it over a period of some time, vis-à-vis requests for changes in the budget," the report said.

The Knesset's Research and Information Center recommended the Defense Ministry be required o submit regular quarterly and annual reports for the committee's review, "To more effectively assess the efficiently of the (ministry's) budgetary planning."