BPK to get foreign help in Aceh fund audit

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.