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December 21, 2005

Israel Academia Corruption: Think Twice Before Supporting Hebrew U and the Weizmann Institute

"While the media constantly focuses on alleged irregularities in the administration of Torah institutions, reports that turn out to be unfounded and inciting, a highly critical report on corruption at Israeli universities received minimal coverage in the mainstream press.

According to a report, State Comptroller Eliezer Goldberg released last week, the Hebrew University, Tel Aviv University and the Weizmann Institute of Science were found to have serious flaws and irregularities in their account books from 2001 to 2003.

Degel HaTorah General Secretary MK Rabbi Moshe Gafni sent a letter to the acting president of the Press Council to complain about the lack of reportage on the grave figures. "To the best of my knowledge this report was not published in the mainstream press, not even in brief, while with regard to their counterparts -- institutions of higher Torah learning, i.e. the yeshivas -- any report or finding of vastly lesser significance receives front-page headlines.

"In a state where one of its principles is freedom of information and the right of the public to know without press censorship based on political views, is it desirable for such a phenomenon to take place?" wrote Rabbi Gafni, demanding that his complaint come before the Press Council's Presidential Board and its Court of Ethics.

According to the Comptroller's report, which covered the management of research and development (R&D) projects funded by external bodies and the activity of the National Science Foundation, the leading provider of research grants, the three universities that were audited transferred surplus income that did not need to be spent on the original research into private research accounts of various researchers. These surplus funds accumulated regularly because costs that really were classified as regular expenses and really were funded out of the regular budget were also listed as expenses that were associated with the research that was being funded by organizations providing financial support. These surpluses were not reported to the sources of funding. Had the respective universities returned the surplus funds to the financial supporters, more grants would have been available for other researchers.

Even the supervision of research expenses was found to be faulty. At the Hebrew University and Tel Aviv University, rather than keeping records of the research assistants' original work hours, reports were filled out based on declarations of the researcher, made long after the work was completed, just before the submission deadline. Such an arrangement is an obvious temptation for corruption, though there was no definite indication that any occurred. In addition, expenses such as reimbursements for researchers' car expenses, office renovations, business-management courses, etc., were covered using monies from the research accounts.

The Hebrew University and the Weizmann Institute reported the same expenses to two different underwriters, in 13 cases. In doing so, the universities deviated from the terms of their contracts with the funding providers regarding research costs that had not been approved. The Comptroller lodged the most severe criticism against the Weizmann Institute for keeping two sets of books, one with the researcher and another with the funding provider.

At the Hebrew University, some 1,250 research studies are conducted annually at a total cost of NIS 288 million ($63 million). At Tel Aviv University, some 1,350 studies are conducted at a cost of NIS 144 million ($32 million) and at the Weizmann Institute, some 1,100 studies are conducted at a cost of NIS 190 million ($42 million).

The Comptroller found that the universities submitted explicitly false reports to public bodies that provide them funding, reporting that all of the funds had been expended and then surreptitiously transferring the remaining funds to their workers' research accounts.

As a result of the various accounting irregularities, "the universities and researchers received from the funding providers monies for which they were not eligible according to the funding providers' guidelines or the contracts signed with them," writes the Comptroller. "The principle of academic freedom and scientific research cannot serve as justification for deviating from standard accounting regulations and proper disclosure."

An audit conducted by the National Science Foundation revealed that the Foundation did not maintain sufficient supervision of financial management of the grants it provides. Even after the Foundation received information from the State Comptroller on the overlapping funding at the universities, it did not check whether grant recipients were indeed eligible for the funds they received.

In conclusion, the report says the universities must disclose more to the financial supporters, manage the research budget and report on expenses, based on accepted accounting guidelines, while increasing supervision and control over the use of research funds.

Following the release of the original Comptroller's report, the Council for Higher Education's Budget Planning Committee and the Board of University Chancellors set up a committee to formulate uniform regulations and guidelines and to advance the changes needed to rectify the defects. The committee submitted its recommendations in December 2003. The Budget Planning Committee adopted the regulations and directed the universities to implement them immediately. The universities agreed to the recommendations in principle and intend to update the regulations within the next few months, says the report.

In reaction to the State Comptroller's report, MK Rabbi Moshe Gafni said he would request that the Knesset be specially convened during the summer break, to discuss the scandal at the universities. He also asked Attorney General Mani Mazuz to look into the matter.

Rabbi Gafni said government ministries, including the Justice and Education Ministries, have long known that billions of shekels are transferred to the universities without any supervision or control, calling it an open secret. "I raised this issue several times in the Education Committee, but there were those who silenced the matter.

"We live in "two different countries," he says. "One nation embitters the lives of yeshiva managers with a system of supervision and control, scrupulously checking every student's identification card and then leaking to the press that `there are dishonest institutions' although nobody ever uncovered irregularities at the yeshivas. In the second nation, billions of shekels are funneled to institutions of higher education without any supervision or control, while university administrators spend enormous sums on inflated salaries, benefits, sabbatical years abroad, cars and lavish offices.

"There is no equality in the State of Israel," he says. "Only NIS 850 million ($190 million) was cut from higher education out of its enormous budget of NIS 6.4 billion ($1.4 billion). The entire yeshiva budget now comes to no more than NIS 500 million ($110 million), though the number of students is the same."

Rabbi Gafni demanded that the Attorney General apply the same stringent supervision found at Torah institutions to the universities and implement the same criteria.

MK Rabbi Yisroel Eichler sent the Attorney General a similar request. "I have never been able to comprehend why nobody at universities checks how many students arrive at the science `kollel,' what time they arrive and how many hours they study per week. Neither do I understand the enormous gap between the wages of lecturers and professors and the measly allowance given to maggidei shiur and roshei yeshivos of great stature in Torah. However, this is not a legal matter but a political and social one.

"I hereby request that the same criteria and fences to protect the public purse be implemented at the universities and the various kinds of secular cultural institutions. I would be interested to know how many cultural institutions would meet these criteria.""

Source and copyright: G. Kleiman, Betzalel Kahn and Itim. Comptroller's Report: Account Management Seriously Flawed. Shema Yisrael (25 August 2004) [FullText]

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