BI challenges BPK's audit findings

BI challenges BPK's audit findings

The Jakarta Post, Jakarta

Bank Indonesia has denied any wrongdoing in the alleged misuse of
trillions of rupiah in state funds stashed in a government
account, as stated in a recent audit report issued by the Supreme
Audit Agency (BPK).

Central bank Governor Burhanuddin Abdullah said on Monday
that, to the best of his knowledge, there were no irregularities
in the use of funds in the 502 account, specially designed under
the government's bank blanket guarantee.

While calling the report "tendentious", Burhanuddin also
called for a thorough investigation to clarify the matter.

"I think we all must check (the validity of) the findings,
because it is tendentious," he said.

BPK announced last week that some Rp 20.9 trillion (US$2.52
billion) in the 502 account had been allegedly misused by the
central bank and the Indonesian Bank Restructuring Agency (IBRA).

The BPK audit report was the result of an investigation
undertaken at the request of the House of Representatives in mid-
2001, after most of the funds (about Rp 53.8 trillion) in the
account had been used.

The funds, which belong to the government and are deposited at
the central bank, are used to cover the financial obligations of
closed banks as part of the government's blanket guarantee
program. The program was introduced in the late 1990s to help
restore confidence in the ailing banking industry.

The audit request was made after the government decided to set
up a second account worth about Rp 40 trillion for the same
purpose. The new account is now known as the 509 account.

House Commission IX on financial affairs, to which the BPK
delivered the results of its audit, said it would hold a hearing
with the government, including Bank Indonesia and IBRA, to
clarify this matter.

Paskah Suzetta, deputy chairman of the commission, said the
hearing would likely take place sometime next month, to give
government officials time to prepare.

Burhanuddin said he welcomed the meeting and the opportunity
to discuss the matter.

"I think it will be good. We are obliged to explain things
that need explanation," he said, while insisting the central bank
had used the funds properly.

Anwar Nasution, Bank Indonesia senior deputy governor, said
there was little chance the allegations of misuse were true. "I
think the use of the funds have been accountable."

However, should the allegations prove true, Anwar said whoever
was responsible would be punished.

"If there was misuse, we should leave it to the Attorney
General's Office. Put the guilty party in jail."

Alleged irregularities in 502 account

(in trillions of rupiah)

1. Bank Indonesia 17.77

1.1. BPR's claims 0.27

1.2. Interbank claims (EOP) 3.18

1.3. Forex interest claims 0.11

1.4. Additional BLBI 14.45

1.5. PSWE claims 0.27

1.6. BI's forex deposit 0.67

2. IBRA 3.15

2.1. Third Party Liabilities 2.01

2.2. Interbank claims 0.86

2.3. Off shore claims 0.28

Total 20.9

EOP : Exchange Offer Program

PSWE: Post-Shipment Export Drafts

BLBI: Bank Indonesia liquidity facilities

Source: BPK