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Former Knesset speaker Dalia Itzik was cleared by State Comptroller Micha Lindenstrauss from the criticism directed at her for modifying her private residence at the state's expense in 2006. In the annual state comptroller's report published yesterday, Lindenstrauss said "we did not find it appropriate to indicate any fault in the conduct of Itzik in this affair."

Haaretz had learned that an earlier draft of the report leveled direct criticism at Itzik and then-Knesset director general Avi Balashnikov, but the published report presents a much softened version of the remarks.

The comptroller's report examined the refurbishment of Itzik's Jerusalem residence. She said at the time that the residence was an "official" one and claimed expenses to the sum of NIS 140,000, which she repaid on her own initiative at a later date. The work included retiling the floor and purchasing new furniture.

Balashnikov was director general of the comptroller's office for two months in 2009, after serving as director general of the Knesset under Itzik. He is seen as a close confidant and associate of the former Knesset speaker.

In June 2009 Balashnikov said he asked to resign from his post at the comptroller's office, as the comptroller's investigation into the conduct of the Knesset administration accelerated. A short while after retiring, he returned to the office to give testimony for the report.

Working documents and testimonies used by the comptroller's office when preparing the report on Knesset administration reveals Balashnikov was directly involved, as Knesset director general, in the arrangements concerning Itzik's apartment. For instance, Balashnikov personally confirmed the fee of the floor tiler, after the contractor's fee was not paid.

Despite this direct involvement, Balashnikov's name was conspicuously missing from the report. Although he said in his testimony to the comptroller that he decided to avoid any decisions regarding the apartment because of his close relationship with Itzik, information gathered for the report indicates he was involved in authorizing repairs, purchasing equipment and transferring requests for payments related to the apartment.

One of the documents acquired by the comptroller's office is an internal record by an employee of the Knesset administration, where she notes she was asked by Balashnikov to arrange tiling of the residence. Another document indicates that the Knesset accountant instructed his officials not to confirm payments into Itzik's bank accounts, unless personally authorized by Balashnikov.

In his testimony,Balashnikov said he did not make any decisions on tiling the apartment and was only working to begin processes, without being involved in the details. He also testified that he authorized the payment for the tiling after the contractor complained that he had not been paid.

In advanced stages of preparing the report, the comptroller's staff had doubts that the officials involved took care to follow the outdated regulation permitting state coverage of painting and small-scale repairs as a result of reasonable wear-and-tear in an official residence.

For this reason, the comptroller's staff believed at a late stage of preparing the report that some of the decisions regarding the residence, such as retiling it, were made in accordance with an apparently unreasonable interpretation of the regulations.

However, the criticism was significantly softened in the published version of the report, placing the blame not with the officials who interpreted the regulations but with those who had phrased them. "It would appear that the incident could have been averted if the instructions were more unequivocal and detailed, rather that ambiguous and subject to various interpretations," the report said.

Balashnikov told Haaretz yesterday that he would not comment on the affair. "I didn't comment at the time - I let the comptroller's staff do their work, and I have no intention of commenting today," he said.

Balashnikov's name is mentioned elsewhere in the report, in chapters concerning deficiencies found in the Knesset's administration.