Audit agency reveals billions of rupiah in losses

JAKARTA (JP): The Supreme Audit Agency revealed yesterday financial losses amounting to billions of rupiah by the government due to poor state finance management over the second semester of the 1996/1997 fiscal year.

Chairman of the agency J.B. Sumarlin told leaders of the House of Representatives that the losses were a result of 607 irregularities the agency found in its auditing of the state budget, regional budgets, and state and regional companies from October last year to March this year.

The irregularities included those discovered in 234 projects financed by the state budget over the same period.

In its report to the House, the agency cited losses amounting to "billions of rupiah" but stopped short of specifying the exact amount.

Yesterday was Sumarlin's first appearance in the House since Harmoko was elected House Speaker early last month. Sumarlin last addressed House leaders in June, when he unveiled hundreds of billions of rupiah in state financial losses.

Also present in the hearing were deputy speakers Syarwan Hamid, Abdul Gafur, Ismail Hasan Metareum and Fatimah Achmad.

Sumarlin told Harmoko that the agency's latest audit discovered that losses caused by regulatory violations topped the list with 243 findings, followed by inefficiency which occurred in 148 cases.

The agency also found 117 cases of improper use of resources, 67 cases of poor administration and 32 cases of inefficient use of resources.

"Generally speaking, these findings suggest the need for further correction in the use of state funds, whether they are allocated to the state budget, regional budgets, state companies or regional companies," Sumarlin said upon submitting the agency report.

He said strict discipline in state spending would not only improve efficiency and effectiveness of state expenditures, but also the government's accountability in the implementation of the budget.

Sumarlin said the agency had audited 1,658 expenditures since the 1993/1994 fiscal year, during which it found 4,451 irregularities ranging from poor administration to inefficiency.

He said the agency has relayed the bulk of these findings to the related ministries and institutions for follow-up measures.

"In general the findings have been or are being responded to, but we have not been informed of all of the correctional measures," Sumarlin said.

He suggested that the government revise the 1973 law on the audit agency, saying that the present law does not enable the agency to exercise a follow-up to its findings.

House Speaker Harmoko said the House would use the audit results to help it exercise its control on government spending.

"Our main focus is that the agency's findings receive a proper response. This would support our effort to establish a clean government," Harmoko said.

He also called on the government to carry out its economic reform program consistently and if necessary launch more policies in a bid to cut high spending rates. (amd)