BPKP reports funds leakage of Rp 10.3 trillion

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)