BPKP lists BP Migas among top abusers

Rendi A. Witular, The Jakarta Post, Jakarta

The Development Finance Comptroller (BPKP) has again discovered massive financial irregularities in the Oil and Gas Implementing Body (BP Migas) this year.

During a hearing with the House of Representatives' finance commission on Thursday, BPKP chairman Arie Soelendro said the agency had found irregularities in the use of state funds worth Rp 1.32 trillion (US$146 million) in the first nine month of this year.

Arie said the financial irregularities discovered at BP Migas amounted to Rp 1.11 trillion, or some 84 percent of total irregularities.

"BP Migas is responsible for the largest portion of the irregularities with 416 cases in the first nine months ending September this year," said Arie, while refusing to spell out the type of irregularities found at the agency.

Both the BPKP and BP Migas are accountable to the President. BP Migas' head, Rachmat Sudibyo, could not be reached for comment.

"Irregularity" in BPKP terminology does not necessarily mean "corruption". Aside from the misuse of funds, it can also refer to improper accounting.

Earlier, the BPKP said it had found 61 financial irregularities worth Rp 967 billion in the agency during the first quarter of last year.

BP Migas later clarified this by saying that this figure referred to cumulative irregularities involving oil and gas contractors in the country between 1995 and 2001. During this period, oversight in respect of oil and gas contractors was carried out by state oil and gas firm PT Pertamina.

BP Migas, which has taken over Pertamina's duties in overseeing the country's upstream oil and gas industry, was set up in mid 2003.

The second highest number of irregularities in the January- September period was found in Pertamina with 202 cases involving Rp 89.33 billion, followed by departmental and non-departmental institutions with 7,015 cases worth Rp 80.94 billion. State enterprises, other than Pertamina, accounted for 535 cases involving Rp 17.45 billion.

Arie said only 2,280 cases worth Rp 420 billion, or 31 percent of the total value of the irregularities in the first nine months of this year had been "followed up".

Following up means that the public prosecution service or the police takes action against the agencies, institutions or companies where the financial irregularities have been found after receiving a report from the BPKP.

During the hearing, Arie also expressed concern over the fact that there was still Rp 512.83 billion, $8.71 million and DM 765,287 in non-budgetary funds that had yet to transferred to the state budget.

Non-budgetary, or off-balance-sheet funds, are basically revenues other than revenues from tax collected by state institutions, but are not included in the state budget. In the past, these huge funds were a source of corruption and were allegedly used to finance the 32-year authoritarian rule of former president Soeharto.

The government issued a regulation in 2000 requiring state institutions to transfer all off-balance-sheet funds to the budget. However, a number of state institutions, such as the Directorate General of Taxation, the Directorate General of Customs and Excise and the Office of the State Minister for State Enterprises, are reportedly still not wiling to let go of such funds.

Elsewhere during the hearing, finance commission chairman Paskah Suzetta said the commission would urge the government to review the position of the BPKP as it had similar duties as those of the Supreme Audit Agency (BPK), which is independent of the government.

"We will ask the government to consider merging the BPKP with the BPK in order to boost the efficiency of state administration, and improve the reliability of audit findings," said Paskah, who is from the Golkar Party.