BPK aims to boost presence in newly empowered provinces<\/p>\n
Evi Mariani, The Jakarta Post, Jakarta<\/p>\n
The fiscal decentralization program introduced more than two
\nyears ago has provided regional administrations with greater
\naccess to various sources of funds, but there are fears of
\nrampant corruption or irregularities without the presence of an
\neffective audit system.<\/p>\n
The Supreme Audit Agency (BPK) is expected to play a key role
\nin ensuring transparency and good governance in the management of
\nfunds and assets by regional administrations.<\/p>\n
Farzana Ahmed, a financial management specialist at the
\nIndonesia branch of the Asian Development Bank (ADB), said that
\nimprovement in regional audits was extremely urgent, because a
\nlot a lot of money was being handled at the regional level.<\/p>\n
\"There has to be a role expansion of the BPK, but the question
\nis how to do so in a cost-effective manner,\" she told The Jakarta
\nPost last week.<\/p>\n
The BPK is planning to boost its regional presence by opening
\noffices in the country's 30 provinces. In order to complete the
\nprogram by 2007 -- as stipulated under last year's amendment to
\nthe 1945 Constitution -- the agency will need to recruit a huge
\nnumber of auditors.<\/p>\n
BPK senior auditor Soegiharto said there were 11,570 audit
\nobjects at the regional level that had to be checked by the
\nagency.<\/p>\n
However, BPK's reports show that the office can only complete
\nabout 350 objects on average, or about 3 percent of the total
\nnumber of audit objects.<\/p>\n
\"We only have seven representative offices in provinces with
\nonly 656 auditors and a limited budget to audit those 11,570
\nobjects,\" he told The Jakarta Post on Thursday at his office.<\/p>\n
It has been suggested that the BPK recruit auditors from the
\nDevelopment Finance Comptroller (BPKP), which already has a
\nstrong presence in provinces and regencies.<\/p>\n
The BPKP was introduced by former president Soeharto in 1983
\nwith the same audit task as the BPK's, but its status has never
\nbeen clear. While it is an internal auditor, its office remains
\noutside government institutions -- which already have their own
\ninternal audit divisions, known as the inspector general. It is
\nalso not an independent external auditor like the BPK, because it
\nreports directly to the President. With such a confusing audit
\nstructure and overlapping between the BPK and the BPKP, there
\nhave been calls for the government to dissolve the latter.<\/p>\n
The decentralization program allows regional governments to
\nraise local taxes and obtain higher portion of revenue from local
\nnatural resources.<\/p>\n
Under the recently approved State Finance Law, the BPK will
\nalso have a mandate to audit the budget of local governments and
\naudit companies owned by the local governments.<\/p>\n
To help address the problem of poor audit capability in the
\nregions, the ADB has planned around US$700,000 worth of technical
\nassistance.<\/p>\n
\"The purpose of the grant is to assist the government in
\ndeveloping a clear picture on how the audit institutions should
\nbe structured and to develop a long-term plan,\" she said.<\/p>\n
\"We did an internal survey and we found that at the regional
\nlevel, (there's a lack of) qualified financial people,\" she said.
\n\"We hope the technical assistance would provide the government
\nwith some alternatives,\" she said.<\/p>\n
She added that the technical assistance would come up with
\nsome conclusions next year.<\/p>\n
Box<\/p>\n
BPK audit findings
\n(percentage of deviations)
\n_____________________________________________________________<\/p>\n
2001 2002<\/p>\n
Semester II Semester I<\/p>\n
Central government 13.1 16.1
\nRoutine spending 20.5 9.8
\nDevelopment spending 6.4 15.6<\/p>\n
Province 3.7 27.9
\nRoutine 1.8 8.1
\nDevelopment 5.1 30.7<\/p>\n
District\/Cities 12.7 21.8
\nRoutine 13.8 21.6
\nDevelopment 11.6 22.0
\n__________________________________________________________-
\nSource: BPK reports, February 2003<\/p>",
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