The annual turnover of these bodies is estimated at tens of billions of shekels.
The objective: To examine the financial conduct of different corporations from a multiyear perspective and ascertain if public bodies are operating efficiently.
Comptroller Englman approved a new audit procedure for handling financial reports of public bodies (whose annual turnover is estimated at tens of billions of shekels). The state comptroller’s directives to the accountants of corporations had not been revised for tens of years.
A database is to be established that will examine the financial conduct of public bodies from a multiyear perspective and compared this to other public bodies. In this way, the audit team will be able to verify, among others, the financial robustness of the audited bodies.
Should deficiencies be found in certain financial reports, or should the reports indicate irregularities in proper governance, the state comptroller will order a deeper investigation into the matter.
In Israel, more than 600 corporations operate, and among these are government companies, subsidiaries, municipal corporations, public corporations and others. The annual turnover of the corporations is estimated at ten of billions of shekels. The scope of assets (property) of the corporations is estimated at hundreds of billions of shekels, and the number of employees working in these is estimated to be tens of thousands.
Nonetheless, in contrast to government ministries, whose financial reports are available for audit by the Office of the State Comptroller, for tens of years, public corporations avoided submitting their financial reports to the Office of the State Comptroller.
In March 2018, Comptroller Shapira updated the directives and ordered the accountants of public corporations to submit to the Office of the State Comptroller annual reports that cover all the topics detailed in the guidelines for accountants, which in their professional opinion, are essential and required when reporting.
In the next stage, and as a complementary step to updating the directives, the audit work procedure according to which the audit teams examine the handling of the financial reports of public corporations will be regularized. State Comptroller Englman, immediately upon taking office, requested handling of this issue be accelerated and recently the new procedure was approved. Comptroller Englman instructed his office personnel to focus on effective financial audits and the establishment of a database of all public corporations that will facilitate the multiyear examination of one public corporation compared to other public corporations. Thus, the comptroller’s mission as described by law regarding financial audit and the investigation of the efficiency and correct use of public money will be realized.
According to the new procedure, the audit teams will demand from the different corporations their annual financial reports at the times set by law, and no later than six months after the end of the financial year (up to June 30th) and regarding local government, no later than eight months after the end of the financial year (up to August 31st).
When the full reports are submitted, the audit teams of the Office of the State Comptroller will conduct an audit of the balances from a multiyear perspective and will examine whether the corporations are robust in terms of finances and there is no hint of financial irregularities.
Should the audit teams identify deficiencies in the budget reports, in the framework of their auditing of the financial reports of different corporations, they will, where necessary, reach out to the corporation’s accountant for clarification and explanations, and if required, open a deeper investigation.
Comptroller Englman has clarified that in the framework of enhancing the audit process, he sees great importance in advancing financial audits that focus on financial data and facilitate deep inquiry into the efficiency and the processes through which public bodies use public money.