From government handling of imports to real estate taxation, from food supply in emergencies to the quality of teaching in higher education institutions – the State Comptroller’s Report addresses issues that affect us all
State Comptroller and Ombudsman Matanyahu Engelman today released the State Comptroller’s Annual Audit Report on economic and education-related issues.
The report examines several subjects that directly impact the cost of living and affect every citizen, including government policy on imports, real estate taxation, the economic feasibility of transportation projects, and a follow-up audit on the promotion and development of public transportation in the Haifa metropolitan area. An additional audit reviewed the quality of teaching in higher education institutions.
“Harm to Food Security”
The terror attack of October 7 had a profound effect on Israel’s economy — particularly in its early months — and disrupted the daily lives of citizens across the country.
The damage to the home front during the war and its prolonged duration require that government ministries ensure continuous provision of essential services in order to maintain the country’s functional resilience and minimize the war’s impact on the public.
As part of this report, the State Comptroller examined Israel’s preparedness to ensure food supply in times of emergency and found a series of deficiencies.
“The emergency food sector in the State of Israel is not regulated, and there is no overarching governmental framework in charge of ensuring its preparedness,” noted State Comptroller Engelman. "This stands in contrast to other countries, such as Japan, Singapore, Switzerland, and the United Kingdom, which have enacted legislation and appointed a coordinating body to manage national food preparedness. As a result, in Israel, responsibility for the food sector is fragmented among several bodies — primarily the Ministry of Agriculture and the Ministry of Economy.”
"In the field of agriculture, the audit found that government policy in the decade preceding the war weakened the agricultural sector and harmed Israel’s food security. Preparedness of the sector for emergencies relies, among other things, on the storage of wheat and animal feed in emergency warehouses. However, the audit found that wheat stored in these warehouses was kept under inadequate conditions, with some of it infested with insects, bird droppings, and other waste. Furthermore, the Ministry of Agriculture does not have a comprehensive assessment of the extent of wheat contamination, and essential components of animal feed are in short supply."
The Ministry of Economy is in charge of storing basic goods in emergency warehouses and overseeing essential food industry plants; however, the audit found that the Ministry lacks sufficient agreements for some of these products, and that certain items in the emergency warehouses are in short supply. In addition, the preparedness of essential food industries was found to be only partial and insufficient.
The State Comptroller concluded that the Ministry of Agriculture, together with the relevant bodies — including the National Security Council (NSC), the National Emergency Authority (RAHEL), the Ministry of Economy, the Ministry of Health, the Ministry of Finance, and in consultation with the Home Front Command — must complete the formulation of the national food security plan and advance its approval by the government.
Deficiencies in Import Reforms
The high cost of living has burdened Israeli citizens for an extended period. “Opening the Israeli market to competition is essential in battling the cost of living,” said State Comptroller Matanyahu Engelman.
“Governments have initiated several ‘reforms,’ yet these were accompanied by shortcomings: the implementation of the Standards Reform (2022) by the Ministry of Economy caused confusion and failed to achieve its full savings potential; under the ‘No Stopping at the Port’ reform (2024), the Ministry of Economy suspended the transfer of products for laboratory testing for 60 days due to the non-renewal of contracts with the laboratories; and in the ‘What’s Good for Europe Is Good for Israel’ reform (January 2025), importers are not sufficiently engaged in the import processes. The Ministries of Health and Economy have yet to publish the necessary regulatory updates required for the reform’s implementation. The gap in regulation and enforcement is highlighted by market inspection findings from June 1, 2023, to June 1, 2024. During this period, 424 products were sampled, and most (approximately 57%) were found to be non-compliant with official standards.”
“Reducing the cost of living in Israel is essential, and the ‘What’s Good for Europe Is Good for Israel’ reform is a step in that direction. However, the Ministers of Economy and Health must address the deficiencies identified in this report. The Minister of Economy is also advised to consider expanding the reform to additional countries, such as the United States.”
Real Estate Data Not Up to Date
One of the most significant expenses for Israelis, if not the most significant, is housing. Buyers and sellers need reliable information to determine the true value of real estate assets, yet the State Comptroller’s report exposes a series of deficiencies in the databases relied upon by the Israel Tax Authority.
“The high cost of housing in Israel requires substantial attention. Addressing it demands up-to-date and accessible real estate data,” said State Comptroller Matanyahu Engelman. “Nevertheless, more than 900,000 apartments—about half of the housing units listed in the Land Registry—do not appear in the Real Estate Database maintained by the Tax Authority.”
“Moreover, hundreds of thousands of data entries in the Tax Authority’s database—such as the year of construction, the number of floors, and the apartment size—are inaccurate,” the Comptroller warned.
“Because the Central Bureau of Statistics relies on data reported to the Tax Authority, its calculation of the Housing Price Index failed to account in real time for benefits offered by contractors, particularly financing campaigns and discounts on linkage differentials and interest expected to accumulate until occupancy. As of the end of the audit, the CBS had also not yet incorporated data on protected rooms (‘Mamad’) in older apartments into the Housing Price Index formula or reflected them in any other way, despite the importance of timing and elapsed time.”
The Comptroller further cautioned: “The right hand does not know what the left hand is doing, with two separate databases presented to the public on two different government websites: the Real Estate Database, managed by the Tax Authority, and the Government Real Estate Website, managed by the Survey of Israel. Significant differences were found between the results produced by the two sites – potentially misleading the public when making decisions based on this information.”
"There may be cases in which citizens do not receive a work grant despite being eligible for it, due to deficiencies identified in the Real Estate Database maintained by the Tax Authority. For example, in 2022, 5,700 appeals were submitted for reconsideration of denied work grants, of which 4,783 (83.9%) were found to be justified. The audit also found that, for an unknown period, the verification of property holdings, which affects citizens’ eligibility for the work grant, was based on faulty files.
The Prime Minister’s Office should examine and determine which entity will be responsible for establishing a national property information infrastructure that consolidates data from multiple sources."
