BPK to audit SOEs to curb financial irregularities
Rendi A. Witular, The Jakarta Post, Jakarta
The Supreme Audit Agency (BPK) will audit all state-owned enterprises (SOEs), both those under the central government and those under regional administrations, starting in 2006 as stipulated in the new state finance bill.
BPK Chairman Satrio B. Judono said on Friday that the audit would focus on finding financial irregularities at the SOEs, which for many years had been treated as cash-cows by people who were well-connected in political circles.
He also said that the move was crucial to help minimize state losses.
"Under the new bill, state audit of SOEs, which is currently unorganized, will all be handled by BPK," said Satrio at a press conference, adding that the audit would also cover publicly listed SOEs.
The state audit of 144 SOEs under the central government has been conducted by either the State Finance and Development Comptroller (BPKP) or the Directorate General of Financial Institutions. BPK has only audited specific SOEs by special request.
BPK previously revealed that throughout 2001 and 2002, it had found Rp 456.3 trillion worth of irregularities and abuse of state funds, mostly in the implementation of the 2001 and 2002 state budgets.
BPK said that the findings were the result of an inspection which covered the implementation of budgets in 2001 and 2002 for the central and regional governments, and state companies operating under the central and regional governments.
The uncovering of irregularities in the past had mostly passed by unheeded, partly due the absence of a strong legal basis.
The House of Representatives, however, last month approved the state finance bill, which is to ensure transparency and accountability in managing state finances.
It is hoped that the move will help curb the massive corruption at state institutions, including SOEs.
Under the Finance Law, if any irregularities in the use of state funds are found, not only will the officials in charge of the funds have to pay for the losses, they can also be jailed for the crime.
The Law also emphasizes the principle of equality before the law, which means that any official, even the leader of an SOE who has committed the wrongdoing, will be punishable equally under the law and that they would be accorded no special concessions nor privileges.
BPK is expected to start the audit in 2006, after all SOEs have submitted their financial reports to the agency at the end of the 2005 budgetary period.
Satrio said that in accordance with Chapter VIII of the state finance bill, all SOEs operating under the central government must attach their financial reports with the government state budget accountability report, which would then be submitted to the House of Representatives.
BPK is to audit the financial report first, before it is passed on to the House.
In the case of SOEs operating under regional governments, they must attach their financial report to the local government's budget accountability report, which will then be tabled at the local legislative council.