The State Comptroller published today a special report to the public concerning the prime ministers' residences. State Comptroller Matanyahu Englman: "The construction and protection of the prime ministers' residences reflect inefficiency and waste of public funds. This is scandalous conduct"
State Comptroller Matanyahu Englman:
"There is no way of explaining how for an entire decade the Start-Up Nation has been unsuccessful in constructing a residence for the prime minister of Israel and even the renovation of the residence on Balfour has dragged on for many years. Instead, in recent years the Prime Minister's Office has spent approximately NIS 56 million on the construction and protection of the prime ministers' private residences – MK Netanyahu (NIS 27 million), Mr. Bennett (NIS 25 million) and MK Lapid (NIS 4 million).
Even during the war, I did not receive any explanation why millions of shekels are being spent on the protection of Prime Minister Netanyahu's private residences. This is while the residence on Azza Street is not adapted at all to the threats of war and therefore, during the first weeks of the war, the Prime Minister did not reside there.
The construction on private properties leads to an undesirable mix between the private and the public. The Prime Minister's Office has not even provided an explanation why instead of wasting tens of millions of shekels that go down the drain on the renovation of private residences, the Office has not acquired an alternative apartment in Jerusalem that would be state owned and in which public funds would be invested and it would be made available to all the prime ministers.
The present reality cannot continue.
Looking towards the future, the audited bodies and Prime Minister MK Netanyahu and the prime ministers who will hold office in the future, are under an obligation to ensure that the principles of efficiency and economy will henceforth be at the heart of the handling processes and decision making in the matter. Activity in light of these principles is decreed first and foremost on moral and public grounds, in particular wherever the public expenditure is expended in relation to the prime minister's private residence".
Construction and protection of the prime ministers' residences and the Prime Minister's Office
The State Comptroller found that the persistent weakness demonstrated by the Prime Minister's Office for over a decade in the construction of a new structure for the Office and in the renovation of the prime minister's official residence, has led to a considerable expenditure on the protection and construction of the prime ministers' private residences, inefficiency and a waste of public funds and the construction of private properties leading to an undesirable mix between the private and the public.
For about a decade, the State of Israel has been attempting to construct new structures for the Prime Minister's Office (the PMO) and the prime minister's residence. The activity in this field began as far back as 2014, with the "Almog" project, which was designed to provide the prime minister and the senior leadership with security protection and a functional infrastructure which would ensure their survival and their continued activity during times of routine and emergency. The project was planned to be constructed on the site included in Kiryat HaMemshala complex in Jerusalem. Following the halting of the Almog project in October 2018, in 2019 the PMO began to formulate an alternative plan, to be implemented in another location in Kiryat HaLeom in Jerusalem – the "Shira" project. In the previous report published in this matter in August 2020 the State Comptroller recommended that due to years of delay in the implementation of the project for the construction of an office and residence for the prime minister, the PMO should examine the alternatives to the location of the project and promote their presentation for the government's decision as soon as possible. The Comptroller also recommended that until the construction of a new structure as aforesaid, the PMO would carry out protection and rectification of the safety defects activity in the existing structure of the PMO and in the structure of the official residence on Balfour Street in Jerusalem, as required by the position of the Israeli Security Agency (ISA) and other professional parties, to ensure the survival and continuation of the prime minister's functioning in times of emergency (renovation of the PMO and the residence on Balfour).
This report is designed, among other things, to examine the implications arising from the many years of attempts to construct a structure for the PMO and the prime minister's residence. The report contains a specification and analysis of the financial expenditure that has accumulated over the years, during the course of which the construction of the Almog project failed, the construction of the Shira project had not been promoted, and the renovation project of the official residence on Balfour is being delayed. Consequently, the need arose to adapt the private residences of prime ministers as an environment for the work usually carried out at the official residence, at an accumulative sum of NIS 56 million.
In the audit, the Office of the State Comptroller examined whether and to what extent the defects raised in the previous report in these matters had been rectified: The delay in the implementation of the project, the administrative work for the examination of the construction in the project's vicinity, the management of the project and the activity of the Committee for Removing Barriers. The Office of the State Comptroller also examined two matters that had not been examined in the previous audit: The protection of the private residences and their adaptation to the stay of prime ministers and also regulating the guarding of the homes of ministers and the private residences of prime ministers vis-à-vis the planning authorities.
The Comptroller found that about ten years after the decision to implement the original project (the Almog project), a project that had failed to materialize, no decision had yet been made that would allow the alternative project (the Shira project) to be launched, and it was no longer being promoted. The majority of the defects that arose in the State Comptroller's report for 2020 in this matter, and at the heart of which the many years' delay in the promotion of the project, have not been rectified.
The official residence on Balfour
In light of the considerable delay in the promotion of the project for the construction of the structure for the PMO ("Almog") and the expectation that it would only be completed in several years' time, extensive and immediate construction and protection activity is required at the prime minister's official residence on Balfour Street. The findings of this report show that this has not been done: The PMO has not implemented the 2018 renovation plan for the residence and an additional plan from 2019, and the Office has still not adapted the prime minister's official residence to the defense establishment's requirements.
Among the factors for the delay of 32 months in the renovation of the official residence on Balfour were disagreements in the PMO regarding the financing of the renovation of the private residence in Caesarea (approximately 8 months, from 2018 to 2019); the failure to evacuate the official residence on Balfour (approximately 18 months, from 2019 to 2021); and the late involvement of the ISA (approximately 6 months, from 2021 to 2022).
In 2018 it was necessary to immediately evacuate the official residence on Balfour of its residents in order to renovate it. In May 2018 the PMO decided that Prime Minister Binyamin Netanyahu would reside in his private residence in Caesarea during the period of the renovation, and in June 2018 the manager of the official residence told the PMO that it was necessary to perform maintenance works in the private residence in Caesarea so that the Prime Minister could move there. The Comptroller found that from June 2018 to January 2019 the PMO had delayed in coming to a decision concerning the scope of the public financing that would be allotted to the works to be performed at the private residence in Caesarea, on account of the difficulty in distinguishing between maintenance activities at the private residence and activities liable to improve its structure. As a result, a delay of approximately 8 months occurred in the period when it would have been possible to commence the renovation works in the official residence on Balfour.
It was also found that until November 2019 protection works had been performed at the private residence in Caesarea at a cost of NIS 795,000 plus maintenance works at a cost of NIS 190,000, out of which NIS 165,200 had been financed by the PMO and NIS 24,800 by private financing, in accordance with the Office's accountant's directive.
The Office's payment in consideration for the performance of these works at the private residence, at an inclusive sum of NIS 960,000, was intended to allow the Prime Minister to leave the official residence on Balfour for the private residence, for the purpose of the immediate renovation of the official residence. However, the Prime Minister continued to reside in the official residence on Balfour Street for more than a year and a half after the completion of the protection works at the private residence, until July 2021, shortly after the formation of the 36th Government of Israel and the expiration of his term of office. Following this, a delay of about a year and a half occurred in the renovation of the official residence on Balfour. It should be noted that during this period, three Knesset election campaigns had been held.
The Comptroller found that the slow and defective conduct in all matters pertaining to the promotion of the renovation of the official residence on Balfour had imposed upon the State Treasury expenditure in a considerable financial scope:
Thus, for example, products had been purchased at a cost of NIS 15.8 million for the protection and renovation of the internal courtyard and kitchen in the official residence on Balfour – but due to the delay in the renovation of the residence, most of the products had become out of date or had been destroyed.
Until the date of the update given by the PMO in February 2024, the Office had issued an order in the sum of approximately NIS 37.3 million for the performance of the project on Balfour, when in practice the sum of approximately NIS 3.4 million (9%) had been used out of this sum. The renovation of the residence on Balfour is expected to be completed by the end of 2025 at the earliest, about five years after the publication of the previous audit.
The prime ministers' private residences
Due to the delay in the renovation of the residence on Balfour, prime ministers were unable to enter the residence from 2021 to 2023, and it became necessary to adapt their private residences for use as the usual work environment done at the official residence. For this purpose, the state invested approximately NIS 56 million, from January 2019 until June 2023, for the performance of the protection and construction works in the private residences of the prime ministers.
The Comptroller found that the cost of protection of the private residence in Ra'anana of the former Prime Minister Mr. Naftali Bennett during the period of his term of office totaled NIS 24.9 million. For the purpose of the protection of this residence, the PMO rented temporary security and protection measures in the sum of approximately NIS 9.5 million for approximately 12.5 months. The measures were rented by virtue of an agreement that was designed to provide measures for specific events, and a tariff was determined on an hourly basis with regard to some of them, which was not adapted to the renting of the equipment for the prolonged and continuous protection of the prime minister's private residence. Consequently, the Office paid for auxiliary items for the purpose of security and protection – the renting of portable toilets in the sum of approximately NIS 103,000 per item per month, and the renting of generators in the sum of approximately NIS 390,000 per item per month, reaching a total of approximately NIS 6.2 million, approximately 65% of the inclusive expenditure on the renting of temporary resources (which totaled approximately NIS 9.5 million). The sum that was paid exceeded by thousands of percent the sum which would have been required to be paid if the resources had been rented in advance for longer periods. Permanent protection measures were installed in the private residence in Ra'anana, at the demand of the ISA, in the sum of approximately NIS 14.5 million. When the decision regarding the protection measures was made, the ISA assumed that it would be possible to use the measures again, but it is almost certain that the possibility of doing so will not be realized in practice. For example, NIS 6.8 million was expended on the purchase of physical security equipment, which according to the PMO could not be used again, and NIS 5.7 million was expended on the purchase of technological measures that according to the PMO could be used again, but they were placed in storage and are liable to become obsolete, and there is no certainty that they will be used again.
The Comptroller found that the cost of protection of the private residence in Tel Aviv of MK Yair Lapid, during the period of his term of office as the prime minister, reached NIS 3.58 million. Approximately NIS 2.79 million (approximately 78%) of this sum was used for the purchase of temporary security and protection measures. The measures that had been dismantled from other residences were not used for the purpose of protection of the residence in Tel Aviv.
The Comptroller found that the cost of protection and security works in the residence on Azza Street and in the residence in Caesarea during the periods of the term of office of MK Binyamin Netanyahu as prime minister, from January 2019 to November 2023, totaled approximately NIS 27.8 million, out of which NIS 960 thousand were for the protection and maintenance of the residence in Caesarea during 2019; approximately NIS 19 million for the protection of the private-alternative residence on Azza Street (approximately NIS 10.4 million out of this sum was used for the purpose of the engagement for the performance of the safety and protection works of the balcony windows in the private residence on Azza Street) and also for the renting of operational apartments and housing for security guards during 2023; and approximately NIS 7.7 million for the protection of the additional residence in Caesarea and for the renting of housing for security guards during 2023.
In the matter of the cost of rectifying the security defects in the residence on Azza it was found that the PMO had hired two advisors for the purpose of the performance of engineering inspections in the structure of the residence on Azza and the determination of the nature of the existing defects in the residence and the scope of the works that should be performed in order to rectify them. Engineering advisor A, who had been hired by the Security and Emergency Department at the PMO, estimated the cost of the performance of the required works at approximately NIS 3 to 4 million. Engineering advisor B, who had been hired at the request of the Office's Accounting Department and the Legal Bureau, for the same purpose, conducted several additional engineering inspections and estimated the cost of the performance of the required works at approximately NIS 250,000. The cost of implementing engineering advisor A's offer was therefore at least 12 times higher than the cost of engineering advisor B's offer.
It transpired that the Tenders Committee at the PMO and the Exemption Committee at the Accountant General Department had decided to approve an NIS 13 million increase in the sum of the engagement for the protection of the residence on Azza Street (from NIS 12 million to NIS 25 million), on condition that preference would be given to the cheaper alternative, and the engagement sum concerning the balconies of the residence would not exceed NIS 750,000. It was found that the Security and Emergency Department at the PMO had sent contractors a request to submit bids for the performance of the works, based mainly on the relatively more expensive alternative, which was estimated at at least approximately NIS 3 million. Subsequently, the PMO did not receive any bids at all concerning the cheaper alternative, and the two bids it did receive contained a list of works that only matched the more expensive alternative. The cheaper of the two bids was in the sum of approximately NIS 1.7 million, not including VAT and overheads. In October 2023 the Tenders Committee at the PMO and the Exemption Committee at the Accountant General Department approved the request of the Security and Emergency Department at the PMO for a change in the cost of an element in the construction, from the sum of up to NIS 750,000 to the sum of up to NIS 1.7 million. Alongside this, no change occurred in the inclusive cost of the works at the residence on Azza Street, and it was noted that the budgetary source would be a reduction in the cost of other elements. The protection works in the residence on Azza Street had not been completed by the date of completion of the investigation conducted by the Office of the State Comptroller shortly after receiving the PMO response in February 2024.
In all matters pertaining to the adaptation of the residence on Azza Street to the Prime Minister's stay during the war, it was found that according to a report by a protection advisor that had been submitted to the PMO in February 2023, the alternative-official residence on Azza Street is not suitable for use as the prime minister's residence in a "war threats" scenario, and during a "significant event" the prime minister and his family "are not supposed to reside in the apartment". During the course of the first month of the Swords of Iron War, at the very least, the Prime Minister resided outside the alternative-official residence on Azza Street. As of now, the duration of the war is unknown and the PMO has built a protected space in the courtyard of the alternative-official residence and has estimated its cost at NIS 474,000. In February 2024, the PMO noted that "it is true that the alternative residence on Azza Street is not suitable for war threats, but it has been adapted and meets all the other attribution threats, and even with regard to the war threats the risk has been reduced". It transpires therefore that the residence on Azza Street is not suitable for war threats, and that the response that it is possible to confront this threat with is only partial. As of October 2023, the expected cost of protection of the residence on Azza Street totals NIS 18 million.
Savings in the costs relating to the security and protection needs
It transpired that, as a rule, the security and protection needs of the private residences of the prime ministers and the scope of the equipment required to provide a solution for these needs are proposed by the PMO, based upon the ISA demands, and approved by the ISA, on the basis of professional-security considerations, and without a systematic weighing of the financial considerations for the purpose of economizing. In the two cases that arose in the audit – the Almog project and the project for the official residence on Balfour – the PMO examined the security measures complying with the ISA demands on the basis of security considerations, and only subsequently did it examine financial considerations for the purpose of economizing. Thus, in the Almog project the protection costs were estimated at approximately NIS 270 million, and after weighing the financial considerations the cost estimate was reduced to approximately NIS 55 million, and at the official residence on Balfour the cost of the renovation was estimated at approximately NIS 54 million, after the ISA had formulated the security content there was a cost estimate of approximately NIS 123 million, and after weighing the financial considerations the cost estimate was reduced to approximately NIS 50 million. The Office did not act in this way in other instances, such as the private-alternative residence in Ra'anana.
At the end of the day, the findings of this report reflect a prolonged weakness of the PMO for over a decade in making decisions regarding the construction of a new structure for the Office and the renovation of the prime minister's official residence, and in their execution; this weakness has led to considerable expenses of protection and construction in the private residences of prime ministers, which was characterized by inefficiency and a waste of public funds; the construction of private properties funded by the State Treasury leads to an undesirable mix between the private and the public.
Comptroller Englman recommends that the PMO should rectify the range of defects set out in detail in this audit report, promote a decision regarding approval of the project for the construction of a structure for the PMO and an official residence for the prime minister – and to make a suitable residence available to the prime minister, from the aspects of defense, security and functional and budgetary efficiency, until such time as it will be possible to occupy the official residence. In view of the realization of the war scenario in October 2023, during the course of which "the prime minister and his family are not supposed to reside in the apartment", that is to say, in the official-alternative residence, it is recommended that the PMO reconsider the need to complete the performance of the plans for the permanent protection of the residence on Azza Street, at a cost that as of August 2023 has been estimated at approximately NIS 18 million, and instead it should consider the purchase or renting of a structure for an official residence for the prime minister, whichj will meet all the requirements.
• Read the special report concerning the construction and protection of the prime ministers' residences and the Prime Minister's Office
