Corruption-prone nonbudgetary funds still exist: BPK

Corruption-prone nonbudgetary funds still exist: BPK

Rendi A. Witular, The Jakarta Post, Jakarta

Chairman of the Supreme Audit Agency (BPK) Satrio B. Judono
has expressed concern that the old, bad habit of government
ministries and state agencies collecting nonbudgetary funds
remains widespread.

He said there were indications that some of the institutions
were reluctant to transfer funds to state coffers via the
Ministry of Finance account, as required by existing regulations.

"The government has not taken any steps to uphold the existing
regulations (on nonbudgetary funds).... We presume there are
still many off-balance-sheet funds managed by the institutions,"
he told the media on Friday.

Judono, however, refused to give figures or mention the state
institutions involved.

Nonbudgetary or off-balance-sheet funds are basically nontax
revenues collected by state institutions but 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.

In a bid to curb corruption as well as to implement good
governance and transparency in state institutions, the government
decided to eliminate nonbudgetary funds and transfer them to a
state revenue account subject to public audit.

Two presidential instructions (Nos. 9/1999 and 4/2000) and a
Ministry of Finance decree were issued to prohibit state
institutions from managing their own budget drawn from nontax
revenues.

The government had set a deadline of July 2000 for the
institutions to transfer the funds. However, of 58 ministries and
state agencies, only 24 had reported their nonbudgetary accounts,
21 declared they did not maintain such accounts and 13
institutions had not yet reported by the deadline. Some analysts
have even suspected that many institutions did not reveal the
genuine level of funds, although BPKP (the internal audit agency)
was called in to verify their reports.

At the time of the deadline, the government managed to net
more than Rp 11 trillion (US$1.3 billion) in nonbudgetary funds,
the bulk of which came from reforestation funds, which totaled Rp
7.5 trillion. This figure was much higher than the Rp 4.1
trillion initially reported by the Ministry of Forestry at the
time, and there have been accusations that the actual amount of
the funds was much higher.

Many institutions have refused to transfer their nonbudgetary
funds (or some only transferred part of them) because there are
no definite sanctions stipulated if they violate the ruling.

Judono said that in order to prevent any misuse of
nonbudgetary funds and to uphold accountability, BPK was now
giving consideration to auditing foundations or other legal
entities linked with the institutions, including the newly
established Vice President Center and several universities.

The Vice President Center is a non-governmental organization
set up by Vice President Hamzah Haz aimed at providing an
alternative forum for communication between the government, the
public and the private sector in dealing with problems facing the
nation. During its launch in August the center managed to collect
Rp 325 million ($38,700).

State universities are also targeted in the audit because they
often receive foreign funds for research projects or education
infrastructure. Such funds are not subject to public audit.