State Comptroller slams IDF inefficiency

Joseph Shapira
Joseph Shapira

Joseph Shapira found that the IDF has increased manpower while cutting maneuvers and army preparedness.

Two weeks after the publication of the report by the committee for examining the defense budget structure, chaired by Major General (res.) Yohanan Locker, at a time of peak tension between the defense establishment and the Ministry of Finance about the defense budget for the coming year, State Comptroller Judge (ret.) Joseph Shapira has published a special scathing critique of the IDF and the Ministry of Defense.

The report said that the defense establishment had failed to meet the main efficiency targets set in the framework of the budget format formulated by the Brodet Committee in 2007, inflated the permanent army apparatus, and cut maneuvers and army preparedness as a result of budget constraints; and that the senior command had not audited and inspected implementation of decisions made about economies and expenses.

In its report, the Brodet Committee stated explicitly that the defense establishment should cut its spending by NIS 30 billion within a decade at the rate of 1% a year.

The State Comptroller's report being published today shows that according to this format, the defense establishment should have cut its spending by NIS 10 billion in 2008-2012, but the amount actually cut was less than half - NIS 3.8 billion.

The report also said that the total savings actually achieved by the end of 2013 through cost cutting by the defense establishment was NIS 6 billion, compared with an NIS 11.5 billion target set by the Brodet Committee for that time.

The State Comptroller termed this "a significant delay with far-reaching consequences for the defense budget." According to the Brodet Committee formula, the large-scale savings that the defense establishment should have saved through thorough cost cutting were earmarked for the use of the IDF in its buildup of forces.

IDF and Ministry of Defense figures cited in the report show that spending on the building up of forces accounts for 15% of the defense budget.

The State Comptroller found that the repeated decisions by the Ministry of Defense director general and IDF Deputy Chief of Staff in 2011-2012 relating to streamlining in the Ministry of Defense Tank Program Directorate and the Administration for the Development of Weapons and Technological Infrastructure had not been implemented.

The report stated, "The parties made responsible for carrying out these decisions did not do so. Furthermore, the high steering committee that had been founded in the defense establishment for this purpose had not followed up the decisions taken, and it was not found that its leaders had demanded explanations of the reasons why their decisions had not been carried out. This is a substantial fault. A situation in which a committee headed by the Ministry of Defense director general and the IDF Deputy Chief of Staff determine targets and presents clear timetables for carrying them out, but they are not carried out, and the committee did not conduct an audit of the implementation of its decisions, should be regarded with the utmost gravity."

The report found that the IDF had not met the target for reducing the number of people serving in the permanent army set by the Brodet Committee. The State Comptroller states that spending on salaries for members of the permanent army accounts for 18% of total spending by the defense establishment, but that the IDF had not agreed on a personnel cutting program by the end of 2012.

According to the State Comptroller, not only did the IDF not reduce the number of those serving in the permanent army, but the number had actually increased by 9% in 2008-2013.

The IDF attributed the increase in the number of those in the permanent army during this period to the manning of essential positions in activity involving unmanned aerial vehicles (UAV), submarines, intelligence, cyber, aerial defense, and the Home Front - with the approval of the Chief of Staff.

The report also indicated that the program presented by the IDF Chief of Staff at the end of 2012 for cutting the size of the permanent army by 4,000 within four years, while hiring 1,000 new personnel for jobs defined as essential, had not been carried out.

IDF figures cited in the report show that the number of those serving in the permanent army had declined by only 412 in 2013-2014, due to the hiring of new personnel in the framework of "building up essential forces."

The State Comptroller noted, "In the five years starting in 2008, the permanent army grew by 9%, and according to the plan, is expected to decrease by 9% to about its previous level by the end of 2016. Even if this level is reached by the end of 2016, it is doubtful whether it can be regarded as a general streamlining in personnel in the permanent army."

An officer warned: "Wasted resources and inefficient management"

Following the Brodet report, the defense establishment contracted with the McKinsey international consultant firm, which drew a report including recommended cutbacks in construction, procurement, and maintenance in the IDF and the Ministry of Defense. McKinsey considered the question of maintenance in the IDF land forces deployment, and warned that "better use of resources is necessary."

The State Comptroller's report shows that implementation of the McKinsey recommendations in this area faced many difficulties, among other things as a result of lack of cooperation by parties within the system. The report quotes an internal IDF document signed by a senior officer in charge of carrying out this streamlining.

This document was distributed to senior officials in the Ministry of Defense and the IDF, including the IDF Deputy Chief of Staff and the Ministry of Defense. It lists the obstacles to making cutbacks in the land forces maintenance system.

"Activity in this aspect was replete with difficulties and opposition by many parties," the officer complained. "As I see it, the situation has to be substantially changed. All the analyses showed waste of resources, lack of efficient management, and significant potential for economizing. It is unacceptable for such an important general staff process to be affected by the level of motivation and cooperation among junior staff levels."

The State Comptroller wrote, "The situation described indicates an absence of proper command and control over the economizing process on the part of the senior echelon in the defense establishment, which has caused, among other things, failure to achieve the expected cost cutting in the maintenance sector."

He added, "Economizing should be continuous. In some areas, no comprehensive examination of cost cutting took place for years, while at the same time, the defense establishment was complaining that the budget was inadequate. Had such an examination revealed that shifting resources from some areas was possible, it is possible that this could have led to the reassigning of resources to areas such as combat readiness, which were for years a target for cutbacks due to an alleged lack of money."

Streamlining? The Ministry of Finances knows not

The State Comptroller says that the Ministry of Finance budget division conducts no regular supervision of cost cutting in the defense establishment. He found that its representatives had not attended a large proportion of the discussions by the higher steering committee in the Ministry of Defense in charge of streamlining in the various units, even though the budge department personnel had been invited to the meetings.

The Ministry of Finance asserted that the Ministry of Defense had not shown it the McKinsey report, although it had asked for it for the purpose of becoming a partner in the economizing process, and that it had therefore decided not to participate in these discussions.

The answer given by the Ministry of Finance budget director to the State Comptroller stated, "The Ministry of Finance does not know whether the defense establishment has economized." The Ministry of Finance thereby repeated its traditional claims that the defense establishment does not behave towards it with transparency, so that it is unable to optimally assess its cost cutting measures.

The Ministry of Defense, on the other hand, asserted in its response to the State Comptroller, "Representatives of the National Security Council and the Ministry of Finance were present at the discussions of the higher steering committee that took place in 2011-2012.

The Ministry of Defense added in the framework of the State Comptroller's examination that the cost cutting program had been presented to the Ministry of Finance and the National Security Council, and it had been willing to tell them about the progress of this cost cutting, insofar as they were interested in it.

Given the contradictions between the statements by the two ministries, the State Comptroller called on both of them to formulate clear and orderly rules for the process of inspection and supervision by the Ministry of Finance of economizing in the defense establishment. He called on the Ministers of Finance and Defense, and also the prime minister, to address this question.

Later in his report, the State Comptroller wrote that the prime minister had conducted only one discussion, in October 2008, about economizing in the defense establishment. He noted that no evidence had been found of any other specific discussions of the matter by the prime minister, or that the head of the National Security Council had given him reports on the matter, even though the Brodet Committee had recommended at the time that the security cabinet conduct at least one discussion a year on this topic.

The State Comptroller further commented that the National Security Council had not conducted continuous supervision on the question of economizing in the defense establishment.

Cutting back on maneuvers because it is easy

In his report, the State Comptroller also addressed the cuts in the budget for IDF training and preparedness caused by the defense establishment's perpetual lack of money. Commenting on what was defined in the State Comptroller's report as a "phenomenon," the Ministry of Defense director general told the State Comptroller's representatives, "A large proportion of the defense budget is locked up in the short term for pensions, salaries for soldiers doing compulsory service, and rehabilitation for army disabled. Only part of the IDF budget is considered 'flexible,' and can be immediately cut."

The State Comptroller commented, "In the long term, all the inflexible elements of the defense budget can be made flexible, but whenever the defense establishment is told it must make cutbacks, it was found that it had economized primarily in areas affecting the IDF's battle fitness and readiness - in particular exercises for reserves. This mode of operation highlights the need for a continuous process of streamlining involving all sections of the defense budget, and for an examination of the sources for a situation in which a budget cut is required, according to the priorities to be set, with minimal damage to the core IDF deployment."

He added that no evidence had been found that the IDF had done any work during the period under review on reducing activity not part of the core IDF task, such as military censorship, Galei Tzahal (Army Radio), Gadna (pre-army youth battalions), and more. "It is desirable that the possibility of considering substantial changes in IDF structure, while cutting back activities that are not part of its core business, take place as soon as possible," the State Comptroller wrote.

Response: "The State Comptroller report does not reflect what is currently being done"

The IDF and Ministry of Defense said in response, "The State Comptroller's report refers to 2008-2012, and does not reflect what is currently taking place in the IDF. We note that starting in 2012, for reasons beyond its control, the IDF has been operating without a multi-year plan, in contrast to the usual practice in organizations on the scale of the IDF and the defense establishment, despite its efforts to implement the "Tarash," "Oz," and "Teuza" multi-year budget plans.

"The Brodet framework was eliminated in 2013. Nevertheless, concurrently with the defense budget cut, the defense establishment is continuing its cost-cutting efforts, and expects to achieve 90% of the target (NIS 27 billion out of NIS 30 billion) by 2017. The IDF has also continued its economizing efforts on its own initiative in a difficult process in which thousands of permanent army personnel were laid off."

Published by Globes [online], Israel business news - - on August 5, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Joseph Shapira
Joseph Shapira
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