Finance Ministry to cut Haredi school systems from state bank accounts

The Finance Ministry informs two Haredi education systems with state funding and huge deficits that they will be cut off from state-controlled bank accounts and budget-related computer systems on September 1.

The move by Accountant General Yali Rotenberg does not signify any reduction in funding for the two education systems, The Marker reports. It does, however, steer the two entities toward greater financial independence and may mean layoffs and other consequences if they fail to cover their deficits of hundreds of millions of shekels.

Rotenberg announces the move in letters to Eliezer Sorotzkin and Avigdor Ohana, the heads of the Independent Education and Fountain of Torah Education organizations, which are affiliated, respectively, with the Shas Sephardi Haredi movement and its Ashkenazi counterpart, United Torah Judaism.

The two organizations will be disaffiliated from and lose access to the computer networks of the state, the letter says. The finance and education ministries will continue to monitor the groups’ financial conduct through an external oversight body, it adds. The two groups will also lose access to the government’s bank accounts and are required to set up their own accounts, where the state will deposit funding, which today stands at about NIS 3.5 billion ($924 million) annually.

This could expose the two groups to the consequences of their tendency to go over their budgets. They currently have a joint deficit of about NIS 600 million ($158 million).

The two organizations will no longer be eligible for services by state accountants, the letter adds.

The system could make the groups insolvent, which would empower the treasury to take over aspects of their administration to remedy their finance, including through layoffs and restructuring, according to The Marker.