Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

18 Teves 5762 - January 2, 2002 | Mordecai Plaut, director Published Weekly








The Finance Ministry Versus the Yeshivos

by Betzalel Kahn

Many yeshiva managers and heads of various Torah institutions have a feeling that the national leaders of the State of Israel would like to put an end to the Torah world. There is no other way to explain why the Ministry of Finance has been heaping abuse on the yeshiva world for many long years, renewing the attack each year and sometimes stepping up the offensive.

It could well be that the Ministry does not intend to wipe out the Torah world, but rather to trample over it, goad it and ignite hatred and animosity toward the chareidi sector until the assault reaches the level of an all-out culture war against chareidim, and accompanied by leftist ideology.

All of the abuse by Finance Ministry officials is really a direct extension of the anti-yeshiva, anti-chareidi incitement launched by the mainstream media, and perhaps the two are tied together. The media helps Finance officials to wage a campaign against the chareidi sector and vice versa. If we take the facts at face value, it becomes crystal clear that the Finance Ministry -- to be more precise, the officials at the Finance Ministry, or as a previous prime minister referred to them, "the boys at Finance" -- do everything in their power to undermine yeshivos and other Torah institutions. There is no other logical explanation for some of the facts presented below.

The political establishment has been up in arms in recent weeks over the Ministry of Religious Affairs budget. Although the Finance Minister promised the money at the beginning of the year and UTJ announced that its representatives on the Finance Committee would delay the transfer of Finance Ministry funds to various other ministries until the money allocated for December came through, the Finance Ministry failed to produce the funds needed to cover the yeshiva budget for the last two months of the year, a total of NIS 89 million ($20 million). The payments that were supposed to be transferred by the committee came to several hundred million shekels allocated for a variety of purposes.

In this article we will not reiterate the long and sullied tale of events that transpired in the Finance Committee during those two weeks, since they have been covered in Yated Ne'eman reports on a daily basis. Instead we will focus on other factors that led to the crisis and the reasons behind them.

Missing Budget Funds

Last week we sat down with the heads of the Union of Managers of Yeshivos and Torah Institutions, which represent all the major streams of the chareidi public. Union management consists of nine members and include some 150 yeshivos. Its goal: to apply pressure on everyone who can help the Torah world in Israel deal with difficult problems.

Pressure must be applied on the Religious Affairs Ministry, the Finance Ministry and the Prime Minister and his staff. The pressure on the Finance Minister is primarily intended to encourage him to restrain his officials, who for years have been doing whatever they please to the yeshiva world. The campaign is conducted by professional, dedicated lobbyists representing UTJ in the Knesset and Knesset committees and sponsored by maranan and their talmidim and the yeshiva and Torah world. Every day they stand up to a culture war in the form of incitement and ideological battles waged by ministers and top officials.

According to yeshiva menahellim, the absurdities they encounter are great. In each of the last three years the Finance Ministry has prepared a budget proposal for Israel's Torah institutions, but at the end of each year the funds are nowhere to be found. Not only does the Finance Ministry fail to learn from the previous year and update the budget accordingly, but instead it keeps trying to cut back, finding various reasons why the yeshivos should not be given the money they are supposed to receive.

Assumptions of Fraud

In 1999 the yeshivos were allocated NIS 960 million ($240 million). This "large" sum led Finance officials to assume that something was amiss. It could not be, they said, that there were so many talmidim enrolled in yeshiva. (This figure includes all Torah institutions: yeshivos, kollelim, institutions for baalei tshuva, etc.) As a result the Finance Ministry required the Religious Affairs Ministry and the yeshivos to begin keeping computerized records of the placement of talmidim, transfers from one yeshiva to another and dropouts. The Team Company was commissioned to accomplish this detailed tracking.

The Finance Ministry expected to find that the yeshivos falsify their reports, inflating the number of talmidim enrolled. This has been one of the main slanderous claims lodged against the yeshivos throughout the years.

The new Team system went into operation, and in the meantime, at the end of 1999, the Finance Ministry began budget talks for the year 2000. Logically the budget should increase according to the pace of inflation and of the increase in the number of talmidim from year to year. However the Finance Minister at the time, Avraham (Beige) Shochat, was certain that the computerized reports generated by the outside company would show that the number of talmidim was far below the figures that had been submitted.

Yet Team's computerized tracking indicated that there were actually more talmidim than originally reported. Administration has never been the strong suit of yeshivas, and they had not been reporting all of their students. According to simple logic, under such circumstances the yeshiva budget for the year 2000 should have been increased to at least NIS one billion. Finance officials, however, thought otherwise for they went and cut the budget down to NIS 820 million. Shochat promised that if the number of talmidim proved to be greater and the yeshivos faced a budget shortage, he would cover the difference. And he was right: the entire budget for the year 2000 was depleted early and the yeshivos indeed faced a budget shortage.

Today the same Beige Shochat is doing battle as an MK in the Finance Committee to ensure that these yeshiva budget shortages are not paid out.

Words are One Thing, Deeds are Another

Then the year 2001 arrived. Last year the national budget was not approved until the end of March due to the major change in the national leadership, when Ariel Sharon was elected to replace Ehud Barak as prime minister.

When the budget is not approved by the beginning of January, generally the country is run according to a one-twelfth formula, i.e., each month is funded at one-twelfth of the budget from the previous year. However in the case of the yeshivas, the Finance Ministry jumped at the opportunity and announced that since the budget had not been approved, the yeshivos would receive only 50 percent of what they had received the previous year.

UTJ MKs met with yeshiva and kollel management to seek their advice as to how to deal with the situation. Some suggested that the funds be transferred only to the major yeshivos and kollelim, and to keep other institutions on hold until the budget was approved. Everyone was concerned over the prospects of receiving only 50 percent of the funds (NIS 42 million per month instead of NIS 84 million). No one wanted a repeat performance of unpaid debts. The Finance Ministry seems to have a knack for remaining in debt to the yeshivos. (See sidebar) If they only transfer half of the sum now, chances of seeing the rest of the money are slim, said several participants at the meeting.

Eventually the January budget was paid at the beginning of February as a complete funding unit, but according to Finance Ministry records, the yeshivos had received half of the sum for January and half of the sum for February. Yet when the budget was finally approved, to everybody's surprise the Finance Ministry paid the difference and eliminated its debt.

MKs, heads of Torah institutions and the Finance Ministry were all aware that no funds would remain by the end of the civil year. If the yeshiva budget for the entire year 2001 came to NIS 850,000, how could NIS 85,000 be handed out each month -- for twelve months? The budget should have been more than one billion shekels, but Finance Ministry officials opted to cut that sum in order to conduct a campaign of incitement against the yeshiva world.

During the course of the year managers of Torah institutions were also reassured by the promise Finance Minister Silvan Shalom made to UTJ MKs in the Prime Minister's presence that if the yeshiva budget fell short, he guaranteed the money would be paid.

But it seems words are one thing and deeds another. The state has been facing economic difficulties and the Finance Minister was unable to obtain the funds. The firm stance assumed by UTJ MKs and especially Rabbi Yaakov Litzman who is head of the Knesset Finance Committee, who refused to approve any budget transfers by the Finance Ministry, eventually resulted in the transfer of funds for the month of November. They found the money by taking money from the Religious Affairs Ministry's Department of Religious Structures and Mikvaot, stirring considerable wrath at the Religious Affairs Ministry and among MKs who were irate that the Finance Ministry would do such a thing without receiving approval from the Religious Affairs Minister and Ministry officials. At the time of this writing, funds for the month of December have yet to be transferred despite promises last week that the money would be found "within days."

The Last Campaign: 30 Left Out of 300!

The incitement campaign against the yeshiva world the left- wing MKs was not the only anti-chareidi campaign conducted over the past year. Six months ago the Finance Ministry leaked a harsh report on operations within the Division of Yeshivot, the Department of Organizations and Institutions and the Department of Accounting at the Religious Affairs Ministry. The report, prepared by Finance Ministry staff, stated that budgets for 300 Torah institutions should be held back after an inspection in which they allegedly did not meet the criteria. As a result the Religious Affairs Ministry was forced to withhold the budgets for these institutions for that month.

That first investigation found problems (wrongly as it turned out) at 300 out of a total of 2,200 institutions, but those include only 1,000 out of a total of 220,000 talmidim in the entire system, which is less than half a percent of all talmidim. Heads of institutions who met right away with Tzvika Chalmish, the deputy accountant at the Finance Ministry, maintained that this was well within the normal expectations among public institutions. In addition, they claimed that such stringent checks have never been performed at the National Insurance Institute or at the Employment Services, although it is well known that there are many instances of false reporting at both of these organizations, and the potential savings to the public purse are much greater. Why just Torah institutions? And why so much publicity?

Within a matter of days the truth came to light. The desire to suggest that the yeshivos were guilty of false reporting led Finance Ministry officials to leak an amateurish report. "The objective was clear," say heads of Torah institutions, "to make the yeshivas out to be thieves." The media went into a frenzy during those days, and although the incident took place six months ago, the yeshiva world has suffered immeasurable damage to this day. Of course, no one in the media who publicized the misleading report bothered to mention that the facts were later shown to differ from those presented.

The Truth -- and its Consequences

Spokesmen for the yeshiva world and the chareidi MKs said right away that the investigation had serious shortcomings. Some of the inspections were conducted during bein hazmanim and in some cases an institution numbering a total of ten talmidim was disqualified if two or three (in statistical terms this showed up as 20-30 percent!) were absent.

Finance Ministry officials responded that the inspection in fact was not carried out the way they had specified and therefore a second inspection was conducted, during which many methodological errors were discovered in the first investigation. After the repeat inspection, 270 of the 300 institutions earlier singled out received their budgets.

Nonetheless, in the wake of that peculiar report, the Finance Ministry forced the Religious Affairs Ministry to enforce sanctions against institutions that failed to pass the inspections. Similar sanctions have never been imposed against any institutions -- cultural, theater, schools -- within the various government ministries that have been suspected of falsifying reports. Yet as part of the incitement campaign, certain procedures have been set in place to punish "problematic institutions." To illustrate, an absentee rate of 20 percent (for whatever reason) is considered severe enough to require sanctions.

By way of comparison the heads of the Igud say that a few months ago there was a survey of secular Israeli youth that showed 53 percent of students are absent from school at least once a week, meaning 10 percent of all students are absent on any given day. Did anyone ever consider cutting school budgets due to absenteeism?

They say further that in principle forcing Torah institutions to prove their enrollment numbers and demonstrate attendance is unacceptable. No other ministries are subject to such stringent supervision. Furthermore, the inspections found no irregularities in the end.

The Outside Company Solution

Every time the Finance Ministry wants to tighten supervision and enrollment reporting requirements, it argues that if a private, outside company would handle the reports to the Religious Affairs Ministry, everything would be fine and quiet.

In response, yeshiva managers say that nothing of the sort exists at any other ministry in the State of Israel.

Second, why the continual assaults on the yeshivos?

If someone should be complaining, it should be the yeshiva managers. Why should they be subject to tighter supervision? Why hasn't the Finance Ministry kept its commitments to fund the yeshivos based on natural growth? Why hasn't it now transferred the remaining NIS 180 million ($45 million) owed to the yeshivos based on approved budgets from last year? And why does the Finance Ministry conduct a smear campaign in the media, backed by top ministry officials?

Putting Bread on the Table

Every survey so far has only demonstrated how dire the situation has become; how yeshiva managers have been forced to cower under the budget whip wielded by the Finance Ministry and how Torah institutions have become the punching bag for the Finance Ministry and the media, which seek out any and all means of treading upon the Torah world.

Yeshivas are not the only target. This month (December) many avreichei kollel did not receive their monthly stipends for more than three weeks. These stipends typically come to NIS 1,500 ($350)-NIS 750 from the Religious Affairs Ministry and NIS 750 from contributions the rosh kollel raises. "This money just puts bread on the table," say managers of Torah institutions.

Some roshei kollel paid avreichim out of the money for the following month, others took out loans. Some institutions have little credit left. "Why do we have to beg for the stipends, at levels that have not been updated for four years, and then have them make a laughingstock of us?" they complain.

The battle waged in recent weeks in the Finance Committee when payments of budget allocations were delayed, comes on the heels of great efforts on the part of MKs from UTJ. They held long talks with the Prime Minister, with the director of his office and with the Finance Minister and top-ranking officials in his ministry to relay a clear message that the stipends must be paid, just like the budget for every other organization in the country. "The Igud of Yeshiva Managers fully supports the MKs in the battle they are waging, a battle which is really our battle," say Igud heads.

Budget Cuts

Yeshiva and kollel heads are distraught over the present situation. They cite the annual ritual on the day the budget is approved in the Knesset.

Finance Ministry officials prepare the budget book in advance, including an amount of support sufficient for ten months. Then on the day the budget is approved they respond to pressure that is inevitably applied by adding back the missing funds. Since this comes as a political promise, it must be laid on the Knesset table 24 hours before the vote on the budget. "The Finance Ministry could have included the entire amount when they first prepared the budget and spared us the humiliation. This is essentially a form of slander against us, as if we are political blackmailers," say the Igud.

Now a new problem has arisen. As part of the across-the- board cuts in all ministries, the government has proposed cutting the Religious Affairs Ministry's budget by another 3 percent. "All year long they made a laughingstock of us, and now they want to cut the yeshiva budgets by another three percent? That is ridiculous," say yeshiva and kollel heads.

0.0041 Percent!

Knesset Internal Affairs Committee Chairman Rabbi Moshe Gafni maintains that UTJ should not be expected to bear the burden of the Mizrachi-oriented ulpanot and the yeshivot tichoniyot, as is currently the case. The Torah world consists only of the yeshivos ketanos, yeshivos gedolos and the kollelim. Other institutions should be separated, and we should have to fight only for the yeshivos and the kollelim. "Why should we be responsible for Mafdal institutions?" wonders Rabbi Gafni.

Rabbi Gafni presented us with the following figures: In 1976, before the Right came to power, the yeshiva budget was 0.009 percent of the national budget: a total of 76,804 liras. By 1993, the yeshiva budget was already more than NIS 500 million. In 1999 the yeshiva budget was NIS 1.026 billion (0.0047 percent of the national budget). In the year 2000 the yeshiva budget came to NIS 1.127 billion (0.0049 percent of the national budget), and in 2002 the budget is slated to decrease to NIS 1.054 billion, comprising only 0.0041 percent of the national budget.

Begin increased the yeshiva budget, and during Shamir's time in office the yeshiva budget increased by another 200 percent. "When I served under Shamir as Religious Affairs Deputy Minister, the yeshiva budget increased from 112 million shekels to nearly half a billion shekels. To our great surprise, today the yeshiva budget has decreased and comprises only 0.0041 percent of the total budget."

Continues Rabbi Gafni, "Finance Ministry officials claim that for years there has been irregular growth in the number of talmidim. But this should have been reflected in the growth in the budget for yeshivas. The yeshiva budget should have grown in proportion to the growth in the number of talmidim and in proportion to the general increases in the national budget. Yet in practice, the allocations for all yeshivas has remained the same.

"This week, during a meeting of the State Comptroller's Committee, I said that when I served as Religious Affairs Deputy Minister and certainly since then, the number of students at institutions of secular higher learning has increased, and their budget has grown from NIS 1 billion to NIS 5.5 billion. Meanwhile the number of yeshiva talmidim has also increased constantly, yet the yeshiva budget has not grown even in nominal terms.

"This means that the Finance Ministry has been mixing ideology into the budget. In keeping with their own desires, they limit the number of talmidim by decreasing the budget. [Recently] they stopped [payments to] 300 yeshivos and kollelim based on a report, and every time there's something else."

Last week Rabbi Gafni sent a letter to the Prime Minister, the Finance Minister and members of the government, in which he complained that the Religious Affairs Ministry budget for 2002 is smaller than the budget for 2000, while the budgets for all other government ministries -- the budgets for the President's House, the Prime Minister's Office, the Police, the Ministries of Finance, Interior, Justice, Defense, Environment, Culture, Education, Higher Education, Employment, Welfare, Health, Housing, Agriculture, Infrastructures, Industry and Commerce, Tourism, Transport and Communications -- have increased. Only the Religious Affairs Ministry budget decreased: from NIS 1,626 billion in 2000 to NIS 1,587 billion in 2002 (a decrease of NIS 39 million). The yeshiva budget has also been reduced despite the need for an increase: from NIS 1,127 billion in 2000 to NIS 1,054 billion in 2002 (a decrease of more than NIS 72 million).

Rabbi Gafni has yet to receive replies from the Prime Minister and the Finance Minister. During the Knesset budget talks to take place over the course of the next weeks, UTJ representatives will insist on a budget increase for yeshivos and for the Religious Affairs Ministry. The MKs know the battle will be tough, and they are also bracing themselves for the Knesset battle over putting the yeshiva support clause into the budget book, which would make the funding a part of the basic budget and would protect it from the attacks it has been subject to, particularly by Finance Ministry officials who have taken great pleasure in heaping abuse on the yeshivos through various budgetary maneuvers.


The following letter, dated 1 Teves (December 16th), was written by Rabbi Moshe Gafni and sent to the Prime Minister, the Finance Minister, members of the government and members of the Knesset Finance Committee.

Based on the 2002 budget proposed by the Finance Ministry and the government, every single governmental ministry has been given a budgetary increase over the past two years with the exception of the Ministry for Religious Affairs budget and the yeshiva budget, both of which were given smaller budgets.

For your convenience I have included a table that I copied from the budget books showing the results for the year 2000 and the proposed budget for the year 2002. It includes a breakdown of the increases in every governmental ministry, while the Ministry for Religious Affairs alone has a budget reduction of NIS 39,098 million and the yeshivas have a budget reduction of NIS 72,337 million.

Government Ministries (in thousands of NIS) Ministry Proposed Budget For 2002 Real Budget in 2000
Presidential Office 25,764 20,379
Prime Minister's Office 553,428 500,922
Ministry of Finance 1,575,271 1,452,553
Ministry of the Interior 4,862,348 4,713,822
Ministry of Internal Security 6,719,876 5,733,513
Ministry of Justice 1,874,911 1,427,648
Ministry of Foreign Affairs 1,366,019 1,047,091
Ministry of the Environment 237,504 224,652
Ministry of Science, Culture and Sport 794,353 697,509
Ministry of Education 24,580,206 21,925,739
Ministry of Higher Education 5,839,018 5,286,846
Ministry of Employment and Welfare 5,344,372 4,737,714
Ministry of Health 14,902,284 13,714,178
Ministry of Housing and Construction 280,168 249,438
Ministry of Immigrant Absorption 1,862,043 1,969,592
Ministry of Agriculture and Supports 3,982,841 3,102,396
Ministry of National Infrastructures 225,753 150,037
Ministry of Industry and Trade 184,933 176,619
Ministry of Tourism 514,574 453,580
Ministry of Transportation 453,352 275,227
Ministry of Communications 62,742 60,733
Ministry of Religious Affairs 1,586,858 1,625,956
Clause 04 - Halacha, Research and Torah Studies 1,054,387 1,126,724

Respectfully yours,

Moshe Gafni

Yeshiva Budget (Clause 04)

[First column] Year [Second column] National budget [Third column] Religious Affairs Ministry budget [Fourth column] Clause 04 - Halacha, research and Torah studies [Fifth column] Percentage of national budget [Sixth column] Percentage of Religious Affairs Ministry budget
1976 85,200,000 152,000 76,804 0.009 50
1986 --- 99,310 53,440 0.008 53.8
1993 101,062,207 816,204 542,118 0.005 67
1996 172,772,606 1,207,988 763,856 0.007 63
1998 207,377,617 1,543,540 959,578 0.004 62
1999 214,975,294 1,607,435 1,025,978 0.0047 63
2000 227,426,080 1,625,956 1,126,724 0.0049 69
2002 254,836,885 1,586,858 1,054,387 0.0041 66

Finance Ministry Sources: "Yossi Beilin is to Blame"

The serious claims lodged against the Finance Ministry in the main article have already been heard for years. Last week we contacted the Finance Minister with a series of detailed questions, but as with every other high-ranking minister, it is no easy task to hold a conversation with Silvan Shalom. The economic crisis in general and the specific pressures of the day prevented the Finance Minister from responding to our questions.

Silvan Shalom's close associates boast, "Work relations are good and in order, and full cooperation and mutual respect prevail between the Finance Minister and the Religious Affairs Minister." Unfortunately the cooperation between them does not express itself in any major improvements in the yeshiva budget in particular nor the Religious Affairs Ministry budget in general.

Silvan Shalom's staff blames former minister Yossi Beilin for all of the balagan in the Ministry of Religious Affairs budget. They claim that in the 2001 budget, submitted while Yossi Beilin was serving as Religious Affairs Minister, it was decided to eliminate the Religious Affairs Ministry and therefore the Ministry budget was not included in the budget book.

When Silvan Shalom assumed the job of Finance Minster, he worked to reverse the decision and to return the Religious Affairs Ministry to the budget book. "After the budget was approved in March 2001, the Religious Affairs Ministry was indeed returned to the budget book," say the Finance Minister's associates.

One big question remains a mystery: Why was the Religious Affairs Ministry budget for 2002 cut more than all other government ministries if the budget is built on a per- talmid rate and the number of talmidim in yeshivas has increased considerably in recent years? During the same period the number of university students has grown as well, and there somehow funding was made available to increase the higher-education budget phenomenally.

Unpaid Debts

To this day the Ministry of Religious Affairs owes approximately NIS 100 million ($25 million) to Torah institutions for debts accrued during different periods starting before 1999. If someone thought that the Religious Affairs Ministry or the Finance Ministry intends to pay these outstanding debts, he can keep dreaming.

Since then, that is after the computerized Team system was brought online, another NIS 70-80 million in unpaid debts to the yeshivas remains because the new, sophisticated computers reported growth in the number of talmidim (just the opposite of the results the Finance Ministers hoped the new system would show). Does someone plan to pay? As of now, this remains uncertain.

Some yeshiva and kollel managers have documents in hand showing that the Religious Affairs Ministry does indeed owe them large sums of money, yet they have no way of receiving the funds, for the money does not exist -- there is nowhere to take it from.

In recent months, in every meeting between UTJ and yeshiva representatives and Finance Ministry officials, the issue was brought up. On each of these occasions it was deferred for the simple reason that there is no money.

Recently there was a change. The Finance Ministry sent letters to yeshivas saying institutions that sign a form affirming that they have no claims beyond the amount the Ministry is willing to pay them for this year can receive the money, but not everyone is willing to sign such a form. Many managers have objections to the amounts listed, and therefore are reluctant to surrender to the dictates of the Finance Ministry.

Essentially, there are written promises, and it is thought that if the respective institutions turn to the courts and present these letters, the state would be forced to pay the money immediately.

Who's Funding Whom? Do Yeshivas Pay more in Taxes than they Receive in Support?

Torah institutions in Israel are run as nonprofit organizations. VAT authorities do not recognize the expenses generated by the yeshivas as deductible since they are not companies or authorized businesses. Therefore they pay 17 percent VAT on food products, furniture, equipment -- on virtually everything that they buy.

A few years ago the menahel of one yeshiva calculated the total payments of the yeshivas and he came to an astounding conclusion: Torah institutions in Israel pay more than NIS 1 billion in VAT every year! This is much more than the amount of financial support the government provides the yeshivas.


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