Legal obstacles hamper auditing work, BPK says<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The Supreme Audit Agency (BPK) called on the People's
\nConsultative Assembly on Thursday to scrap or review several laws
\nit said hampered its work as the sole external and independent
\nstate audit agency, as mandated by the Assembly at its 2001
\nAnnual Session.<\/p>\n
The agency said the laws prevented it from auditing
\ninstitutions that use state funds for its activities, including
\nfoundations owned by both the military and the civil service, as
\nwell as publicly listed state-owned enterprises (SOEs).<\/p>\n
\"In order to strengthen BPK's role as the sole external audit
\nagency of state funds, eliminating and revising legal hurdles is
\nnecessary,\" BPK head Satrio Budihardjo Joedono said when
\ndelivering the agency's report to the Assembly during its Annual
\nSession.<\/p>\n
Satrio cited Law No. 1\/1995 on limited companies and Law No.
\n16\/2001 on foundations as among those laws that hampered his
\nagency in auditing state finances.<\/p>\n
The limited company law, according to BPK, prevents the audit
\nof the financial reports of publicly listed SOEs.<\/p>\n
According to Article 59 of the law, the board of directors of
\nan SOE must submit an annual financial report to a public
\naccountant for auditing.<\/p>\n
Satrio added that Law No. 8\/1995 on the stock market further
\nprevented BPK from auditing publicly listed SOEs, as it
\nstipulated that only public accountants who had obtained a
\nlicense from the Ministry of Finance and were listed with the
\nStock Market Supervisory Agency could audit listed companies.<\/p>\n
\"BPK has notified the Ministry of Finance and the Office of
\nthe State Minister of State Enterprises of its duty, as the sole
\nexternal state auditor, to audit SOEs,\" Satrio said.<\/p>\n
The law on foundations has prevented the agency from auditing
\nfoundations owned by both government institutions and the
\nmilitary, he said.<\/p>\n
Article 52 (3) of the 2001 foundation law stipulates that a
\nfoundation receiving state aid, foreign assistance amounting to
\nat least Rp 500 million or has assets of Rp 20 billion must be
\naudited by a public auditor.<\/p>\n
The foundation law was initially passed in response to alleged
\ncorruption by former Indonesia strongman Soeharto, who is thought
\nto have used his labyrinthian social foundations to amass wealth
\nduring his 32-year rule.<\/p>\n
BPK has repeatedly demanded that the law be scrapped for
\nmilitary-controlled foundations.<\/p>\n
Earlier this year, Satrio insisted that an audit of military
\nfoundations was necessary to determine whether they were using
\nstate funds to develop business empires.<\/p>\n
The Indonesian Military has dozens of foundations involved in
\nbusiness. Among them are the Army's Kartika Eka Paksi Foundation
\nand Inkopad, or the Army's Cooperative Center. The Air Force, the
\nNavy and the National Police also run businesses through their
\nfoundations.<\/p>\n
Satrio also told the Assembly BPK submitted the results of its
\naudit of the 2000 state budget on Dec. 24, 2001. However, BPK was
\nunable to draw a conclusion on the accuracy of the figures
\npresented in the state budget report.<\/p>\n
\"There are fundamental shortcomings in the state budget
\nreport, and the government also failed to follow up BPK's
\nrecommendations,\" Satrio said.<\/p>\n
The agency carried out several audits during 2001, including
\naudits of Bank Indonesia's financial report, the haj pilgrimage,
\nat the request of the Ministry of Religion Affairs, and the
\nexport credit facilities at the Ministry of Defense and the
\nIndonesian Military and National Police headquarters. These were
\nall performed from July to November 2001.<\/p>\n
BPK, however, did not disclose the results of these audits in
\nits report to the Assembly.<\/p>",
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