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Local authority chairmen and their deputies shirk their legal duty to report their assets and additional jobs beyond their public office, State Comptroller Micha Lindenstrauss said on Wednesday in his report on local governments.

Council members in about one-third of all local authorities don't pay municipal taxes, water bills and other financial obligations, and people including former convicts and insolvents have run for public office despite being ineligible, the report said.

Despite these findings, the director of local government supervision at the State Comptroller's Office, Shmuel Golan, told Haaretz, "Local government in Israel is not corrupt."

"There are some failings, and you cannot deny there are places where safeguards are needed," he said. "Planning, construction and tenders still require special attention, since this is where money and government meet," Golan told Haaretz yesterday.

Golan and 60 staff members spent much of the year preparing the report.

Local planning and construction committees need new monitoring mechanisms, he told Haaretz yesterday.

"This is one place where a local authority can be dragged into losing its integrity. Planning and construction is full of money, there is a lot of pressure. These committees need control mechanisms," he said.

Golan said local government needs an ethical code, since municipal officials are particularly exposed to big business. Distinguishing legal and illegal is not enough, he said; not everything should be addressed through criminal law, especially since legislation does not address every possible situation.

"There need to be rules of right and wrong for elected local government officials," he said.

The report also addresses other areas, including how local authorities handle substance abuse, and maintain bridges and tourist sites.

Lindenstrauss passed his findings on a land purchase in the Ramat Gan diamond exchange to Attorney General Yehuda Weinstein. The comptroller found significant flaws in how the local planning and building committee and senior municipal officials handled the matter.

Shlomo Buhbut, chairman of the Union of Local Authorities in Israel, said local authorities must fix the failings the report found. An ethical code compiled by his group is up for discussion, he said.

The relationship between the state government and local authorities needs to be fixed in order to protect the latter from crises and collapse, he said.