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The Haifa municipality has not filed a police complaint against a municipal official it suspects of embezzling NIS 200,000 in public funds, Haaretz learned this week.

The city comptroller disclosed the alleged theft a year ago, but though the municipality fired the official who worked in the water and sewage department, it has decided against filing a complaint with police.

The decision was based upon the recommendation of the comptroller and legal adviser, the municipality said.

"The municipality said that in such cases we have to leave room for the legal adviser's discretion, and he determined that there's no need to file a complaint and we should make do with firing him," said a municipal official opposed to the decision. "But here there is no discretion. This is a clear-cut criminal offense."

The municipality defended its response to the corruption accusations.

"A police investigation takes a long time," a municipal spokesman said. "In the meantime, the municipality will need to suspend him and pay him a salary, as opposed to firing him quickly without benefits."

The veteran municipal official, who was also a private insurance agent, is suspected of taking advantage of his public position to insure private contractors who provided services to the municipality. He allegedly received thousands of shekels in loans from these contractors which he never repaid.