But the court also said that municipalities would have to agree to an economic recovery plan sought by Mr. Netanyahu, who has charged the local governments with widespread mismanagement.
This is not usually the case in places where widespread mismanagement occurs.
Over the last year, opposition to the regime's highly centralized system, corruption and widespread economic mismanagement has grown markedly.
Metzler, who had already announced his intention to retire on July 2, 2010, admitted some mistakes had been made but denied allegations of widespread or serious mismanagement.
The audit by the United States Department of Housing and Urban Development found widespread mismanagement at the authority, which provides low-income housing for roughly 32,000 residents.
Allegations of widespread economic mismanagement dogged the Ershad regime during the early part of 1990.
A state investigation has found widespread mismanagement in New York City's public administrator offices, particularly in Manhattan.
Metzler, who had served for 19 years as cemetery superintendent, admitted some mistakes had been made but denied allegations of widespread or serious mismanagement.
The controversy was sparked when an audit of the agency Hydra House by the provincial auditor found examples of widespread mismanagement and misapplication of public funds.
The draft of the audit report, which was provided to The New York Times by a city official requesting anonymity, charged Columbia with "widespread fiscal mismanagement."