In cooperation with the IDF: Accountant General promotes new system for monitoring the defense budget

The Ministry of Finance and the defense establishment have agreed on the establishment of a new monitoring system for the defense budget, but the Budget Commissioner opposes the move. This was learned by Globes.

The agreements, formulated between Accountant General Michal Abadi-Boiangiu and the financial advisor to the Chief of Staff, Brigadier General Nir Weingold, include the implementation of artificial intelligence systems and full and real-time reflection of the defense establishment's engagements with the Accountant General's division. In addition, it was agreed to hold monthly joint situation assessments and to ensure full transparency regarding future commitments.

Commitments of tens of billions

There is a long-standing debate between the Ministry of Finance and the defense establishment regarding the scope of budget oversight. The Treasury is concerned that in addition to the current budget, the Ministry of Defense also has an "engagements budget" that rolls over commitments of tens of billions of shekels years into the future.

Over the years, the Accountant General's division has placed an accountant on its behalf within the defense establishment — as is customary in other ministries — who is supposed to sign off on those commitments. However, in practice, the engagements often reach him as a fait accompli, without the ability to stop budget irregularities. The new arrangement is intended to reflect to the Treasury the defense establishment's commitments not only for the coming year, but also for the coming years.

Although the tension on the subject has accompanied the relations between the bodies for years, the issue has become particularly acute since the outbreak of the war, with the acceleration of the pace of orders and the expansion of the lack of budget control.

Fears of the "overbooking" method

This issue was at the center of an extensive discussion in the Nagel Committee for examining the defense budget, which submitted its recommendations in January 2025. The committee's report explained that "the Accountant General in the Ministry of Finance has full control over the individual engagement process, as it gets underway, but has no knowledge or prior control over the overall framework of the engagement plan transferred as instructions for planning and execution from the financial advisor to the Chief of Staff to the rest of the IDF, and over the considerations in determining the financing coefficient program (which actually determine the amount of overbooking) and the risks arising from it."

The majority position in the committee was that the existing method of work should not be changed from the ground up but rather adjusted — mainly by setting a multi-year framework, in which decisions will remain in the hands of the financial advisor to the Chief of Staff but will be reflected to the Accountant General in advance.

In contrast, the minority opinion emphasized that the financial advisor to the Chief of Staff allows the army to enter into future commitments whose derived cash flow is higher than the approved defense budget, on the assumption that some of the commitments will not be realized or will be delayed (a method known as "overbooking"). Since the Accountant General is not exposed to these data, the minority opinion recommended requiring the Accountant General's prior approval for any such move.

The minority opinion was supported by former Accountant General Michal Abadi-Boiangiu, who has since returned to the position and is currently promoting the oversight model vis-à-vis the army. On the other hand, the majority opinion was supported by former financial advisor to the Chief of Staff Maharan Froznfer, who currently serves as the Budget Commissioner at the Treasury.

The confrontation will roll to the doorstep of the next government

In the past, Froznfer defined the issue of defense budget oversight as an "esoteric" subject and argued that previous moves did not lead to savings. Now it seems that his approach has changed, but he still opposes the requested oversight model. Froznfer currently believes that one should conduct oneself vis-à-vis the Ministry of Defense exactly as with any other government ministry — a model completely different from both the Nagel Committee's recommendations and the agreements formulated now between the Accountant General and the army. In the defense establishment, his position is interpreted as an attempt to subordinate and control the army's budget, while the establishment wants to maintain a degree of independence that does not exist in other ministries.

The confrontation between the Budget Department and the defense establishment on the issue of control will likely roll to the doorstep of the next government. It is the one that will have to decide on a much broader question, which is what is the "new normal" of the current defense budget, which stood at about 60 billion shekels before the war and almost tripled during the years of fighting.