Financial watchdogs ask for the House for grater power

Financial watchdogs ask for the House for grater power

Urip Hudiono, The Jakarta Post, Jakarta

Two financial watchdogs -- the Supreme Audit Agency (BPK) and the
Financial Transaction Reports Analysis Center (PPATK) -- have
asked the legislature for more power to create better monetary
governance.

The BPK asked the House of Representatives to amend a 32-year-
old law on the agency to give it more independence and authority
to carry out audits down to the regional level.

Similarly, the PPATK requested a review of the antimoney
laundering law to give it the authority to trace and freeze
accounts with suspected ties to money laundering. The center also
wants the power to sanction uncooperative financial firms.

BPK chairman Anwar Nasution said the agency needed more
authority to lay out and implement its policies, as well as to
determine its own budgetary needs. "This is to ensure our
independence in monitoring the government's management of public
finances."

The Constitution places the BPK on the same level as the
government, the Supreme Court, the House and the Regional
Representatives Council. Article 2 of Law No. 5/1973 on the BPK
gives the agency the authority to audit the state's annual budget
and report the results to the House.

"More power would enable the BPK to audit nonbudgetary funds,
apart from the state budget," Anwar said. "It is also important
for us to audit state-owned enterprises."

Nonbudgetary, or off-balance-sheet funds are basically non-tax
revenues that state institutions collect but do not include in
the state budget. A recent report on governance by the Asian
Development Bank said these funds were particularly prone to
corruption.

On the issue of regional autonomy, Anwar said the BPK should
also have the power to audit regional budgets and regional
enterprises.

Audits of regional companies and budgets are usually performed
by internal auditors from the Development Finance Comptroller
(BPKP), which has representative offices in every province.

In acknowledging that amending the law on the BPK and
implementing the changes would take time, Anwar again called for
the merger of the BPK and the BPKP. "We only have a third of the
staff of the BPKP, so the merger would really help us carry out
those audits."

Separately, in a hearing with House Commission II for law and
human rights, PPATK head Yunus Hussein said the center needed
more powers to fight money laundering.

"In Italy, the antimoney laundering agency has the legal power
to freeze bank accounts two days after the account owners are
named suspects in a money laundering crime," he said.

The PPATK, he said, also needed the authority to sanction
uncooperative financial firms to force them to report suspicious
transactions, as required in Law No. 25/2003 on money laundering.

"We also need cooperation from the police and prosecutors to
process money laundering crimes and not just charge them as
subsidiary offenses," he said.

Indonesia was removed from global money laundering watchdog
Financial Action Task Force's list of noncooperative countries
and territories last month.