BPKP to audit central government loan to regions<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The Development Finance Comptroller (BPKP) is investigating
\npossible misuse by regional governments of investment funds
\nprovided by international financial agencies through the central
\ngovernment.<\/p>\n
The audits follow the failure of the regional governments to
\nrepay a total of Rp 5.4 trillion (US$606 million) in debts,
\nincluding interest, principal payments and fines, over the past
\nsix years.<\/p>\n
\"The BPKP is conducting an investigative audit into possible
\nirregularities in the use of the funds,\" said Paskah Suzetta, a
\nmember of the House budget committee on Monday, adding that the
\naudit came at the request of the government.<\/p>\n
The BPKP met on Monday with the regional governments as
\nrepresented by the Association of Regency Administrations, the
\nAssociation of Indonesian Governors and the Association of
\nMunicipalities to discuss the issue.<\/p>\n
The regional governments' representatives asked for cuts in
\ntheir debts to ease their financial burdens.<\/p>\n
According to Paskah, most regional governments have invested
\nthe regional development investment (RDI) funds in building
\ninfrastructure, such as markets and transportation facilities.
\nSome regions channeled the funds to their own water companies.<\/p>\n
Paskah said the results of the BPKP investigation would
\ndetermine the next step regarding the repayment of the debts. The
\ndebt may be rescheduled, restructured or cut.<\/p>\n
The RDI funds are provided by international lending agencies,
\nsuch the World Bank and International Monetary Fund, to promote
\ninvestment in the regions.<\/p>\n
However, the funds are channeled through the central
\ngovernment because under the prevailing laws the regions the
\nregions are not allowed to directly take out foreign loans. The
\nfunds are thus treated as central government loan's to the
\nregions.<\/p>\n
R. Nuriana, the West Java governor, argued during the meeting
\nthat many regions had failed to repay their debt because they
\nwere financially incapable of meeting their obligations.<\/p>\n
\"We thus ask the government for such a policy (debt reduction,
\nrescheduling and restructuring) as each region has a different
\nability to repay its debt,\" he said.<\/p>\n
While admitting that many regions could not pay back the RDI
\nfunds to the central government, Nuriana said that the BPKP audit
\nwas necessary to see if it this was the result of mismanagement
\nor irregularities.<\/p>\n
The regions also hoped that the current inability of many
\nregions to repay their debts should not prevent them from
\nrequesting new loans from the central government in the future,
\nthe governor said.<\/p>\n
The RDI funds for 2001 stood Rp 7.3 trillion while for 2002,
\nthey were slightly down at Rp 6.3 trillion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bpkp-to-audit-central-government-loan-to-regions-1447893297",
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