State treasury management<\/p>\n
Legislation alone will not be effective in preventing
\ncorruption and curbing inefficiency within public finance
\nmanagement, because the efficacy of the law, finally, depends on
\nthe mentality of the officials implementing it.<\/p>\n
But Minister of Finance Boediono was right in observing --
\nafter the House of Representatives endorsed the state treasury
\nbill on Thursday -- that stronger rules on budget allocation,
\naccounting systems, cash and debt management, procurement and
\ninternal control systems could greatly help minimize
\nopportunities for malfeasance.<\/p>\n
The passing of the new legislation itself came as a surprising
\nyear-end gift from the House. The general public, even most mass
\nmedia, seemed to have forgotten the bill after the government
\nsubmitted it to the House in September 2000, along with draft
\nlaws on state finances and on auditing state financial
\naccountability.<\/p>\n
There were vigorous debates for a few weeks immediately after
\nthe unveiling of the three bills, but then they disappeared from
\nthe deliberation agenda until this March, when the House
\nunexpectedly passed the state finance bill into law.<\/p>\n
The lack of media coverage of the deliberations has not
\nadversely affected the quality of the laws, which were prepared
\nwith assistance from the World Bank and the International
\nMonetary Fund, as well as several of Indonesia's sovereign
\ncreditors.<\/p>\n
The two laws provide stronger legal foundations for developing
\nhigher standards of transparency and accountability in public
\nfinance management. Hopefully, the other bill on auditing state
\nfinancial accountability can be completed early next year,
\nbecause the three pieces of legislation are designed to
\nsupplement and reinforce each other -- with the single objective
\nof improving public finance management and accountability.<\/p>\n
Law No. 17\/2003 on state finances, which replaced Dutch
\ncolonial laws of the early 1900s, stipulates that the financial
\naccountability reports of the central and local governments
\nshould not only cover revenues and expenditures, as they do now,
\nbut also cover budget realization, cash flow, notes on financial
\nreports and financial statements of state companies and other
\nstate institutions.<\/p>\n
In provisions specially designed to deter officials from
\nembezzling public funds, the State Finance Law stipulates that
\nany official who is tasked with receiving, keeping, paying and\/or
\ntransferring money, securities papers or state property will be
\nregarded as a treasurer, and are obliged to submit accountability
\nreports to the Supreme Audit Agency. The \"treasurer\" as defined
\nin this provision will be held personally responsible for any
\nloss of state money under their management.<\/p>\n
The State Treasury Law is to replace the Dutch colonial budget
\nmanagement law (ICW) of 1925 which, with some amendments, is
\nstill used by the government. The new law will put the ministry
\nof finance fully in charge of managing the state budget, and it
\nclearly stipulates the principle of a single consolidated fund.
\nThe law also enforces the role of the finance minister as the
\nstate's chief financial officer.<\/p>\n
The law stipulates provisions on budget management and
\nfinancial planning, debt, procurement and property management,
\nand penalty and sanctions for state treasurers. In addition, it
\nhas clear-cut stipulations on the settlement of government
\nfinancial losses caused by mismanagement or corruption, and on
\nthe foreclosure of the assets of treasurers found to cause
\nfinancial losses to the state.<\/p>\n
The new law will require the government to reorganize the
\nministry of finance by dividing its budgetary and treasury
\nfunctions. This will create a stronger treasury directorate
\ngeneral, which will conduct a comprehensive overhaul of the
\ngovernment's payment and receipt systems, consolidate the
\ngovernment's cash resources currently held in thousands of bank
\naccounts and improve the framework of internal control.<\/p>\n
The State Treasury and State Finance Laws will help the
\ngovernment greatly in building a sound financial management
\nsystem, which is a key factor in good governance.<\/p>\n
These two laws, together with the bill on state financial
\naudit, which is expected to be enacted early next year, will help
\nimprove transparency in government budget preparations and
\naccountability in treasury management. This, in turn, will
\nfacilitate the collection of sufficient resources from the
\neconomy and the effective allocation and use of these resources.<\/p>\n
______________<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/state-treasury-management-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }