BPK to use better audit procedures

BPK to use better audit procedures

JAKARTA (JP): The Supreme Audit Agency (BPK) yesterday
promised to adopt more comprehensive procedures in auditing the
state budget and state-owned companies to ensure the economy,
efficiency and effectiveness of public spending.

However, speakers at a panel discussion here yesterday
suggested that the country also adopt a principle of balance of
power and implement procedures for performance audit to ensure
maximum benefits from public spending.

The agency's chairman, J.B. Sumarlin, told the meeting which
discussed "Performance Audit" that the agency, with planned
comprehensive procedures, will deal not only with the compliance
to regulations of the government and its companies but also with
economy, efficiency and effectiveness of their spending.

"In regard to the growing complexity of development and the
budget for it, it is high time for auditors to pay attention to
the economy, efficiency and effectiveness of public spending,"
Sumarlin said.

BPK, the Government Audit Agency (BPKP) and inspectorates of
government institutions have for the last five decades adopted
the conventional auditing method, dealing mainly with the
regularity and financial aspects of government institutions and
state companies.

BPK usually audits financial reports of governmental projects
and state-owned companies by taking samples to be examined. With
such a method, for the last three successive fiscal years the
agency could respectively audit only 457, 456 and 192 projects
throughout the country.

During the period of April 1 to Sept. 30, 1993, BPK found a
number of corruption cases involving a cumulative amount of
Rp 600 billion.

Suggestion

Speakers at yesterday's discussion suggested Indonesia follow
other countries which have abandoned the old method and adopted a
new and more comprehensive one.

P.Th. Schure, a consultant of the Dutch BMB Group, defined the
performance audit as an independent appraisal of an organization,
program, project, operation, activity or function to determine
the extent to which resources are managed with regards to
economy, efficiency and effectiveness, generally called the three
E's.

Schure said performance audits still relate to regulations,
rules and procedures.

Another speaker, Muhammad Murni, a vice chairman of the
Budgetary Commission of the House of Representatives (DPR), said
auditing work will never reach an optimal level if a balance of
power between the executive and the legislative bodies does not
exist.

"Worse than that, most of the time DPR has been harassed,"
Murni said, referring to the habit of BPK to consult its findings
with the government before submitting its annual financial report
to the DPR.

"What is the use of analyzing a financial report which has
been updated?" he said, adding that the Trias Politica principle
should be established for the long-term benefit of Indonesia.

Schure said an appropriate audit procedure is an audit that
deals with regularity, performance and sustainability of a
project as well as the environment, spatial conditions, social
fabric and economic performance.

"An economic analysis tends to overvalue project benefits
whereas negative effects are ignored. Strains on the health of
people and erosion of land are examples of such side effects.
Auditing may reveal a better location for a project or may show
improvements which still can be effected," he said.

The Dutch consultant said the Indonesian government should
develop prototype guidelines for performance audit and design
training modules.

Other speakers in yesterday's panel discussion were Director
General of Tax Fuad Bawazier, deputy chairman of BPKP Irsan Yani,
a member of BPK Gandhi and Inspector General of the Ministry of
Public Works E.L.M. Malonda.(09)