Tue, 08 Mar 2005

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.