Finance watchdog says fund leakage above Rp 1 trillion

JAKARTA (JP): Head of the Government Finance Comptroller (BPKP) Soedarjono said on Monday the state has suffered more than Rp 1 trillion (US$117.6 million) in losses due to corruption during the first three quarters of the 1998/99 fiscal year (April 1998 to December 1998).

He said only Rp 19.6 billion, 10.54 percent of the discovered losses, had so far been recovered.

Soedarjono was speaking at a hearing session with the House of Representatives Commission II for domestic and foreign political affairs and public administration about the findings of BPKP audits of the state budget and state companies.

Soedajono said the losses were caused by rampant corrupt, collusive and nepotistic practices in the bureaucracy.

He was quoted by Antara as saying the total losses mainly consisted of an investment loss of $100.5 million suffered by state construction company PT Hutama Karya and state plantation company PTPN 11, allegedly through questionable purchases of commercial papers.

He said that Rp 29.3 billion in budget funds were embezzled but some Rp 3 billion, or 13.53 percent, of these funds had been recovered. Another Rp 18.06 billion of foreign aid was misplaced but none of this has been recovered.

Soedarjono explained that the low rate of recovery of the embezzled funds was primarily due to the lack of political will on the part of the government.

Lidya Arlini, a legislator from the ruling Golkar party, urged the government to strengthen BPKP with a presidential decree to allow it to legally process its findings.

"The BPKP is too weak to follow up its findings, so it has to be empowered with a presidential decree," she said.

"If it can't legally process its findings, what's the point of having BPKP?" she added.

Indonesia has been so deeply mired in corruption that many analysts believe that usually about 30 percent of state budget funds disappear through official misconduct.

An internal World Bank memorandum leaked to the press last year disclosed that Indonesian officials had siphoned off about 20 percent of the bank's loans.

The report said that much of the corruption involved state contracts with firms owned or controlled by government officials and their relatives.

The international community and the public are keeping a close eye on the bureaucracy over the use of the multi-billion dollar social safety net project intended to help the poor survive the country's worst economic crisis in decades.

The government has invited non-governmental organizations to actively participate in overseeing the program to ensure the money ends up where it is supposed to. (rei)