Finance watchdog says fund leakage above Rp 1 trillion

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)