Serious deficiencies in the conduct of the Maor Haim Schools in Israel, Jerusalem, Safed, were revealed in an audit report prepared by CPA Rami Elchanati, on behalf of the Associations and Charities Unit in the Corporations Authority of the Ministry of Justice.
Among other things, the audit revealed that in 2017-2018, the association paid approximately 10 million shekels to a board member and his relatives, who are the children of the association's late founder. This was on the grounds that there was a debt to the founder, even though in the financial statements over the years and up to December 31, 2016, a debt of only approximately 2.8 million shekels was recorded to a third party - and not to the founder.
The audit believed that this involved prohibited profit distribution, prohibited payment to a committee member, and use of the association's assets for purposes other than its own and not for the benefit of the association.
In addition, deficiencies that emerged in a previous audit were not corrected, including providing loans to deregistered associations and to an association that did not submit reports to the Association Registry and did not have proper management certification. All of this without drawing up an agreement, without receiving collateral, and while making decisions with a conflict of interest.
CPA Ilan Dana, who is handling the case on behalf of the Nonprofits and Charities Unit at the Corporations Authority, noted that the nonprofit will be given an additional opportunity to correct deficiencies, while being monitored by an accountant on behalf of the Registrar of Nonprofits. This is, among other things, in light of the commitment of the founder's family members to return approximately seven million shekels to the nonprofit, and the nonprofit's commitment to correct the deficiencies that have arisen.
Registrar of Nonprofits Attorney Shuli Avni-Shoham: "The Nonprofits and Charitable Organizations Unit at the Corporations Authority aims to increase public trust in the third sector, through smart regulation and while implementing advanced, effective and efficient supervision and enforcement processes. Within this framework, we will continue to act resolutely to prevent the distribution of prohibited profits in nonprofits and companies for the public benefit, to ensure the proper conduct of nonprofits and Charitable Organizations, and we will also work to recover funds that were illegally taken from them.".
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