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28 Iyar 5764 - May 19, 2004 | Mordecai Plaut, director Published Weekly









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Betzedek Asks High Court to Transfer Withheld Funding
By Betzalel Kahn

Betzedek, the American-Israeli center for the promotion of justice in Israel funded by Agudas Yisroel of America, filed High Court appeals against the Justice Ministry's Non- Government Organizations Registrar, the Finance Ministry's Accountant General, the Welfare Ministry's accountant and the Justice Ministry's head of support funding in the matter of funding withheld from NGOs that have a valid Temporary Proper Management Certificate.

The organization's director, Attorney Rabbi Mordechai Green, is trying to appeal to the High Court to rule against Proper Management Certificates that are issued by the Interior Ministry as valid for only part of the fiscal year in the case of NGOs where no problems have been discovered.

In the case against the Accountant General at the Finance Ministry, the Court is being asked to order the transfer of overdue support or budget payments for NGOs that have a Temporary Proper Management Certificate.

In the appeal against the Welfare Ministry accountant, Betzedek is asking the High Court to order support or budget funding to be transferred to every NGO that received a Temporary Proper Management Certificate from the Registrar.

In the appeal against the head of support funding at the Justice Ministry, the High Court is being asked to cancel instructions not to transfer support or budget payments to every NGO that possesses a temporary certificate.

In addition, the High Court is being asked to issue an interim order instructing the Accountant General and the Welfare Ministry's accountant not to delay the transfer of the support payments to these NGOs until a final decision has been reached.

In his High Court appeal, Rabbi Green explains that the government ministries generally set criteria for the support of public institutions or NGOs. In order to actually receive the money they are entitled to, institutions must follow a procedure in accordance with the guidelines set and published by the Finance Minister. For instance -- and in particular -- every institution must produce a Proper Management Certificate valid for that year issued by the NGO Registrar, who conducts routine inspections of all of the nonprofit institutions.

Once every few years each NGO undergoes an in-depth audit that lasts for several months. In some cases the review has lasted for as long as a year. An NGO under such an in-depth review does not receive the standard annual Proper Management Certificate, but rather a temporary certificate subject to periodic renewal. This type of certificate is also given to NGOs that failed to produce all of the documents required by the Registrar, even if the documents in question are inconsequential.

Green says that until recently, in practice the Accountant General and the accountants of the various ministries routinely related to the temporary certificate as if they were the regular yearlong certificates, but now the head of support funding at the Justice Ministry and the accountants of different ministries, particularly the Ministry of Welfare, announced that they would no longer transfer funds to NGOs unless they have a regular certificate. This is not just since the organizations are merely undergoing a periodic review and are not suspected of anything.

The directive was given orally but as a result, a large number of NGOs that were supposed to receive funding for regular activity and retroactive funding from the previous fiscal year have not received any payments, causing them irreversible damage.

Green says when the NGO Registrar became aware that the temporary certificates he was issuing cause major, unjustified harm to the organizations he should have discontinued their use. Likewise the Accountant General and the other ministry accountants are not allowed to obey a totally illegal directive that unfairly harms innocent organizations.

Regarding the head of support funding at the Justice Ministry, Green says "As an administrative authority it is also subject to the rules of proper administration and the law, it must gather relevant data and apply judgment, and only afterwards take action. It is not acceptable and it contradicts all measures of decency and rules of proper administration, for an administrative authority to issue such a damaging directive and only afterwards to hold discussions on the matter, if at all. A directive that was issued and conceived improperly or caused trouble recklessly should be cancelled."

According to the appeal, the directive regarding the Proper Management Certificate itself was first announced four years ago, but nowhere does the law make a provision for the NGO Registrar to carry out reviews and to grant or deny such a certificate. Furthermore, in the government's decision on this issue and also in a booklet called "Nihul Takin Shel Amutah" ("Proper NGO Management") there is no mention of a temporary certificate. Moreover, just a year ago the Accountant General even issued instructions to ministry accountants to consider a temporary certificate the same as a regular certificate.

Over one thousand NGOs received temporary certificates over the past year, notes Green. When NGOs were notified that their funding was being withheld because they lacked a regular certificate they asked to see a written statement of this policy. In response they were told the directive had been transmitted orally and therefore the public announcement had also been transmitted orally.

As a result government funding committees are not even considering the requests of hundreds of NGOs, nor are these NGOs receiving payments approved by the funding committees and which they are legally entitled to receive. Furthermore the accountants have even stopped the transfer of funding withheld from the previous budget year when they had proper certificates.

According to Betzedek the resulting inability of many NGOs to pay their workers constitutes "a mortal, irreparable blow to many hundreds of NGOs, their members, their administrations, and most of all thousands of workers and suppliers." Hundreds of NGOs that possess a regular certificate for 2003 and submitted all of the necessary paperwork received only temporary certificates after they were chosen at random for in-depth reviews, which could take months to be completed.

Green also says the instructions sent by the head of the Justice Ministry's funding department via telephone are illegal, irregular and unreasonable in the extreme, and not in keeping with proper governance and impair the constitutional right to equality. They also contradict the Accountant General's directive to consider temporary certificates the same as regular ones. Green claims the instructions to stop support funding are also illegal.

In the appeal Green also writes that an NGO should not be denied a full-year certificate just because it lacks minor document whose absence does not compromise the organization's proper management, and certainly if the failure to produce the document is beyond the NGO's control.

Also the Non-Government Organizations Registrar is not empowered anywhere to issue a temporary certification and he could just as easily issue a regular full-year certification and later cancel it even in the middle of the year if the findings of an audit justified this.

In light of all these points Green is asking the High Court to issue an order nisi which would become an absolute order following the counter-arguments, and an interim order instructing the Accountant General and the Welfare Ministry accountant to continue transferring the funds withheld because of the directive issued by the Justice Ministry's head of funding.


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