Govt sets up team to probe Rp 3.9t in irregularities

Govt sets up team to probe Rp 3.9t in irregularities

Urip Hudiono, The Jakarta Post, Jakarta

The Office of the Coordinating Minister for the Economy set up an
internal team on Monday to follow up on the Development Finance
Comptroller (BPKP)'s latest findings on financial irregularities
worth Rp 3.9 trillion (US$418.23 million) within ministries under
the coordinating minister's supervision.

The team -- whose members consist of BPKP officials and the
inspectors general of the relevant ministries -- will also
coordinate the drafting and implementation of a common action
plan by the ministries to prevent irregularities in the future.

"The team will particularly look at 5,430 cases worth Rp 3.6
trillion which have been commented on by the BPKP but have yet to
be followed up on and resolved," Coordinating Minister for the
Economy Aburizal Bakrie said on Monday after a meeting with BPKP
director Arie Soelendro.

"It is expected that the team will finish sorting out those
cases by the end of this year," he added.

The BPKP reported last September that it had found a total of
6,757 cases of financial irregularities amounting to Rp 3.9
trillion within the economics ministries. However, only 1,327
cases worth Rp 310 billion have been followed up on within the
ministries.

A total of 435 other cases worth Rp 7.4 trillion had been
legally processed by the police and prosecution service -- 427
cases worth Rp 2.85 trillion and $219.4 million were prosecuted
in last year's third quarter while eight cases worth Rp 96.12
billion and $7.87 million were done so in the final quarter of
2004.

"Irregularity" in BPKP's terms does not necessarily mean
"corruption". Besides malfeasance, it can also refer to "improper
accounting."

Aburizal explained that one of the team's first tasks would be
to come up with a clear definition of which budgetary acts would
be classified as malfeasance and which would merely constitute
"improper accounting".

"The team must explain this to officials from the relevant
ministries so as to ensure a uniformity of perception on the
matter between the BPKP and the ministries' inspectorates," he
said.

Aburizal revealed that 5,430 cases had yet to be resolved
pending legal processing or clarifications from the Director
General of Taxation and other institutions outside the
ministries.

He said that to prevent such irregularities in the future, the
team would also implement "budgeting based on target achievement
and performance" within the ministries and train internal
supervisors based on good governance principles.

Meanwhile, Arie explained that the State Finance Law (No.
17/2004) and the State Treasury Law (No. 21/2004) strictly
obliges all state institutions to account for their budgets
within the state budgetary structure.

"The Ministry of Finance has ordered all state institutions to
report their off-budget funds starting this year," he said. "We
have regularly reported any findings of financial irregularities
in these funds to the ministry and the relevant institutions
every three months so that they may engage in follow-up."

Due to a lack of money from the state budget, many state
institutions have relied on off-budget funds to finance their
operations -- something that brings in its train the potential
for widespread corruption.

Also attending Monday's meeting was State Minister for State
Enterprises Sugiharto, Minister of Trade Mari E. Pangestu,
Minister of Industry Andung A. Nitimihardja and Minister of
Communications and Information Sofyan Djalil.