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According to the ministry, the association has some NIS 3.7 million in cash and is not experiencing any cash flow problem. It was also decided to form an acting committee that in the coming months will continue to work with the various cultural institutions, and the finance ministry-appointed accountant who oversees operations will stay on for three more months.

Nevertheless, the crisis in the association is far from over: The chairman of Omanut Laam's managing committee, Israel Gal, said yesterday that the association's activity is still on hold. Last week Gal informed Livnat that the employees have been sent out on a 'centralized vacation' and that later their work will cease altogether.

At yesterday's meeting the ministry's management presented Livnat with the report published in the wake of the accompanying treasurer's work. Because of the severe facts that have emerged, the ministry's management demanded that Omanut Laam's director general Amir Isbi resign forthwith.

Senior officials said that all the members of the previous management, who were in office during the previous minister's tenure, are responsible for the report. At the end of the meeting it was decided to appoint a special team headed by Avraham Natan, who heads the administration that deal with culture in the communities in the Israeli Council for Culture and Art, and who should, in the coming days, attend to the urgent handling of the crisis that engulfs the association.

According to the report, Isbi and the previous minister Ghaleb Majadle violated procedures and acted against the professional advice of officials in the association. Events, shows and festivals were produced that caused a huge cost overrun. Haaretz first reported this conduct in January 2009.

Last week Omanut Laam's workers gathered and wrote minister Livnat, and at the same time also the attorney general, the state comptroller and the registrar of non-profit associations in the finance ministry. They wrote that during the past three years the association has been going through a series of crises caused by failing managements, and that "the crises peaked last year due to severely defective behavior by the director general and the current management."

Commenting on the Culture and Sport Ministry's announcement, Gal said yesterday: "As the association's new management, we have come to improve it and make it more efficient. I do not understand the Culture Ministry's behavior: A complete stoppage of money transfers and dialogue. We are the ones who exposed the faults; we are the ones who approved the treasurer's entry; it is us who introduced criteria and procedures to the association's work. We - and not the minister - are the ones who launched the efficiency program so that there will be more money for culture in the periphery."

Gal said that he has been in office since February, and is the association's first chairman who has volunteered his services and is not being paid. "I have a feeling that it is not the report nor the criticism that interest the ministry, but appointments and jobs," he added. "Otherwise, they would have acceded to our requests to meet and transfer money owned us long ago, as the finance ministry-appointed accountant demanded. It's not too late to talk to us. The Omanut Laam association is important for the communities in which it functions, and I call upon the minister to sit down and talk rather than initiate wars."

"To my regret, until there will be such a dialogue the association's offices will be closed as an act of managerial and economic responsibility. If I do not get money I cannot undertake activity. During Operation Cast Led we organized artists' appearances that cost NIS 1 million, but until today the Culture Ministry has not paid us. Until today we have not received the money. This is not governmental culture. "

The Culture Ministry commented that "the treasurer's data speaks for itself."