BPK finds over 2,000 irregularities, state loses Rp7.1 trillion
Urip Hudiono, The Jakarta Post, Jakarta
The Supreme Audit Agency (BPK) found 2,128 cases of irregularities in the management of state funds during the second semester of last year, with potential losses to the state totaling Rp 7.12 trillion (about US$765 million).
While an irregularity by the BPK definition does not necessarily mean malfeasance, at least two cases worth a total of $3.3 million in the Ministry of Defense and Ministry of Culture and Tourism showed indications of corruption, BPK chairman Anwar Nasution said in a report presented to the House of Representatives on Tuesday.
"We have forwarded these two cases to the Attorney General's Office for further investigation," Anwar told a House plenary session to discuss the agency's regular audit of state funds.
The audit was conducted between July and December 2004 on 586 accounts worth Rp 282.89 trillion, which represents 64.84 percent of the funds allocated under the 2004 state budget and local government budgets, and in the financial reports of state-owned and local government enterprises.
On the two cases that showed indications of corruption, Anwar said that one was last year's $3.24 million procurement of MI-17- IV helicopters by the Ministry of Defense and the Indonesian Army, while the Ministry of Culture and Tourism appeared to have improperly accounted for state inventories worth up to Rp 1 billion.
Anwar acknowledged that the audits were based on the BPK's old auditing procedures and formats, and were also conducted by BPK staff during the 1998-2004 term.
"In the future, we will conduct our audits using new -- and hopefully better -- procedures and formats," he said.
"The new procedures and formats will include a performance audit, a financial forensic audit and a fraud audit as stipulated by Law No. 15/2004 on state treasury management, accounting and auditing, as well as a general audit."
Commenting on the government's 2003 State Budget Report, Anwar reiterated that the BPK had decided "to give no opinion on the report."
"There are two main factors that have led us to do this," he said.
"First, the government has yet to overhaul its accounting system, and second, the government has still not followed up on findings of irregularities in our reports over the past four years."
Anwar further said that the BPK -- at the House's request -- was also conducting an audit on the funding of the 2004 general election and fuel subsidy spending.
"The audit on the funding of the general election is now being finalized, and we expect to have the complete results and a report within three weeks," he said.
A source from the BPK told The Jakarta Post that the audit agency had found preliminary irregularities amounting up to Rp 90 billion out of total general election funding of Rp 2 trillion.
The irregularities included Rp 60 billion for the procurement of ballot boxes and Rp 30 billion for the procurement of ballot papers, ink and ballot envelopes.
Despite the BPK's regular identifying of possible abuses in state funds by government institutions, incidences of follow-up action by the relevant agencies have been few and far between, with many cases ending up unresolved.
Under the prevailing regulations, the BPK's reports are supposed to be used by the relevant ministries and state institutions as a basis for determining the necessary follow-up action. In cases where the BPK believes there are strong indications of corruption, it can directly report its suspicions to the AGO.
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