BPKP reports funds leakage of Rp 10.3 trillion

JAKARTA (JP): The State Development Finance Comptroller (BPKP) reported on Tuesday that some Rp 10.3 trillion (about US$1.08 billion) in state funds had been abused during the 2000 budget year and in the first half of this year.

Abuses in the State Logistics Agency (Bulog) made up almost half of that amount, whereas abuses in the Finance Ministry worsened by over 22 times in the first six months of this year, according to a BPKP report.

"The findings of BPKP's inspection in the last two years, comprising findings based on regular inspections and those requested by stakeholders, have been handed over to the respective institution or can be inspected," BPKP chief Arie Soelendro said during a hearing with House of Representatives' Commission IX, which oversees financial affairs.

BPKP's report highlighted the audit results of the usage of state funds by ministries and other government institutions.

The top three state fund abusers were Bulog, with Rp 4.43 trillion, state oil and gas company Pertamina (Rp 3 trillion) and the Finance Ministry (Rp 1.26 trillion).

Bulog has long been criticized as a nest for opportunists eking out personal gain from deals in the trade of basic commodities.

An audit by Arthur Anderson revealed that unfavorable business contracts, irregularities, and weak supervision led to Bulog losing some $840 million between April 1993 and March 1998.

But for the first six month of this year, BPKP's audit found only Rp 315.84 billion in abuse of state funds at Bulog. That compared with Rp 4.12 trillion for the whole of last year.

Like Bulog, Pertamina also has a tainted reputation, with an audit by PriceWaterhouseCoopers showing inefficiencies and potential income losses amounting to $4.59 billion from April 1996 to March 1998.

But as at Bulog, Pertamina recorded a lower level of abuse of state funds for the first semester of this year, at only Rp 556.42 billion. The bulk of the findings, or Rp 2.44 trillion occurred during the year 2000.

Following the findings of PriceWaterhouseCoopers and Arthur Anderson, the government has initiated corrective action against Pertamina and Bulog to improve efficiencies and root out corruption.

Unlike at the last two state institutions, BPKP found a staggering increase in abuse of funds at the finance ministry.

Of the Rp 1.26 trillion in the findings, almost all, or Rp 1.20 trillion, occurred within the first six months of this year.

No details for the findings at the finance ministry were available.

Next to ministries and other state institutions, BPKP also audited the possible abuse of state funds by the private sector.

The report said some Rp 1.5 trillion in state banks' pre- shipment facilities might have been misused.

The amount included an abuse of Rp 282 billion, which the banks should have channeled to seven exporters.

Meanwhile, exporters abused some Rp 1.2 trillion and $548.3 million in pre-shipment credits.

According to BPKP, the exporters, instead of using the funds as pre-shipment capital, deposited them in bank accounts.

BPKP chief Arie declined to say whether textile giant Texmaco Group was one of the exporters included in the list.

Last year, Texmaco was under the spotlight over charges it had abused some Rp 9 trillion in pre-shipment credits from state Bank Negara Indonesia (BNI).

An investigation was launched, but the Attorney Generals' Office later dropped the case. It said there was insufficient evidence that the state had suffered financial losses from the loan transaction, as confirmed by testimonies of BPKP experts.(bkm)