BPK finds 'missing funds' in budget

Tony Hotland, The Jakarta Post/Jakarta

Noting a staggering Rp 8.82 trillion (US$929.32 million) missing from the 2003 state budget, the House of Representatives is likely to order the Supreme Audit Agency (BPK) to carry out an investigative audit in hopes of clarifying the use of the funds.

A BPK regular audit on the government's 2003 state budget report, recently submitted to the House, discovered that the balance recorded at the end of the 2003 state budget period should have been Rp 34.58 trillion instead of only Rp 25.75 trillion.

The state budget was managed under the administration of Megawati Soekarnoputri, with Boediono as the minister of finance.

The enormous discrepancy between the figures, according to the BPK, resulted from the weak internal control system in all government institutions and violations of finance regulations.

The BPK ended up not giving any opinion to the government's report due to the ever-present problem of an absence of a standardized auditing system in government institutions, which has often led to poor documentation and reporting of fund management.

It is the fourth time the BPK has rendered no opinion to state budget expenditure, but the discrepancy seems to be more extensive than in the past few years.

The alleged discrepancy was also caused by, among other things, unreported grants received by ministries, undocumented purchases by the state, inappropriate debt and grant management, and unreported use of balance.

Although indications of corruption have not been detected as yet, the House budgetary commission is likely to ask the BPK to carry out an investigative audit.

However, commission chairman Emir Moeis said the government's report would be accepted.

"Acceptance of a state budget report is required to make way for the (regular) audit of following state budgets. But if we find irregularities worthy of further probing, we will render a specific motion and ask the BPK to do an investigative audit (on the 2003 budget)," he said on Friday.

Commission member Djoko Susilo, who hails from the National Mandate Party (PAN) faction, took a harsher stance, saying that a stronger measure needed to be taken to deal with the BPK finding.

"I can assure that the PAN faction will not accept this report, and will propose that the Corruption Eradication Commission take part in investigating this," he said.

Emir said the commission would start working on its review of the government and BPK reports on Friday night before submitting the review to the House plenary session on Monday, to be deliberated later.

Minister of Finance Yusuf Anwar acknowledged there was a discrepancy, but placed the guilt on the absence of regional accountant offices in some areas, unskilled human resources in accounting, as well as poor information and technology infrastructure.

Yusuf said the government was not obliged to formally explain such discrepancies because the law on the state budget only orders the report for the realization of the state budget.

However, the government will make formal reports of all uses of and spending for the 2004 state budget, as obliged in Law No. 28/2003 on the 2004 state budget, and is expected to submit them to the BPK next week.