BPK to get foreign help in Aceh fund audit
Urip Hudiono, The Jakarta Post
An independent advisory board comprising representatives of international state audit institutions will be established to assist the Supreme Audit Agency (BPK) in coordinating and carrying out the auditing of tsunami aid for Aceh.
Recommendations from a three-day conference on the issue held jointly by the BPK and the Asian Development Bank (ADB) earlier this week said the international community had agreed that reports on fund disbursement and audits be conducted on a regular basis to ensure accountability.
The conference also recommended that internal control systems for reconstruction projects be assessed beforehand, to ensure that nothing would interfere with the audit process later on.
"These measures are expected to make the auditing process more comprehensive and able to cover the majority of the flow of funds -- hopefully up to 80 percent or 90 percent of it," the ADB's head of financial management and fund disbursement Farzana Ahmed said on Thursday.
She explained that the advisory board would help the BPK improve its audit capacity and coordinate the sharing of information -- of financial report and audit results -- with other auditors.
The conference also agreed that the BPK would not only be limited to auditing funds channeled through the government, but would also be given the authority to appoint additional external auditors.
Citing as an example the recently established US$500 million multi-donor trust fund for Aceh, Ahmed explained how donors or the government might want to hire private auditors, besides the BPK.
"Private auditors, however, usually report their audit results to the party that appointed them," she said. "But, if the BPK was given the mandate to appoint these auditors, then they would be obliged to report to the BPK as well."
Nevertheless, there would still be fund disbursements out of the BPK's auditing reach, such as funds channeled bilaterally between governments or directly by private institutions or non- governmental organizations.
"That is why coordination is important," she said, adding that the ADB -- which had handed over $300 million for Aceh in grants and loans -- was also prepared to help fund the hiring of additional auditors if necessary.
Of the regular reporting and auditing of fund disbursements, Ahmed said the situation in Aceh was an extraordinary case, so its auditing also needed to be all-embracing.
"If audits are ordinarily conducted a year after a program or project commences, it should not be that way for Aceh," she said. "The time gap between the projects and their audits should be smaller, to ensure improved accountability."
The international community will also set up an online system for the tracking and monitoring of fund disbursements, as well as the status and progress of the projects they are financing.
ADB governance adviser Staffan Synnerstrom said an assessment of the internal control system before the rebuilding period was crucial as the procurement projects during the period carried the largest potential for corruption.
He said there should be better procurement procedures and law enforcement, incorporating the Corruption Eradication Commission (KPK), besides the police and prosecutors.
"The KPK, as well as the Anticorruption Court, should be given the authority to follow up on any corruption indications in the projects," he said.
The government finalized Aceh's reconstruction blueprint earlier this month and will set up the Aceh Authority Board (BOA) to start the reconstruction projects in June.