Govt slammed over unchecked irregularities

Govt slammed over unchecked irregularities

Fitri Wulandari, The Jakarta Post, Jakarta

The Supreme Audit Agency (BPK) repeated on Friday its
criticism of the government's poor management of the state
budget, saying the government also appeared unwilling to do
anything to improve the situation.

BPK chairman Satrio Budihardjo Joedono said his agency had
long called on the government to set up an internal control
system to prevent the budget from being abused. However, the call
remained unheeded.

"We are practicing a system of state financial management
without internal control ... As a consequence, mismanagement and
irregularities in managing the state finances have been going on
unchecked, apparently with impunity," Satrio said in the BPK's
report as the Annual Session of the People's Consultative
Assembly (MPR) kicked off on Friday.

The government's reluctance to curb budget abuses was also
clear from the fact that it had never followed up on the agency's
reports on irregularities in the budgets of government offices
and agencies over the past several years, Satrio said.

The BPK disclosed Rp 12 trillion worth of financial
irregularities in the implementation of the state budget in 1999.
The next year, the figure was Rp 3.296 trillion.

But in 2001, the irregularities had skyrocketed to Rp 387.1
trillion.

Given the poor management of the state budget, Satrio said his
office always suspected the accuracy of the budget figures
presented by the government to the House of Representatives.

He said the BPK had finished auditing the state budget
estimates for 2001 and had submitted the results to the
government on Dec. 12, 2002.

"But as in previous years, the BPK could reach no conclusion
on the accuracy of the figures presented in the state budget
estimates due to the various weaknesses affecting them," he said.

Satrio, who is widely known for his integrity, noted that the
government had yet to change a number of laws and regulations
that had been hampering the BPK in performing its duties.

As examples, Satrio cited the Stock Exchange Law No. 1/1995,
which provides that publicly-listed companies may only be audited
by public accountants. This prevented the BPK from auditing
state-owned enterprises listed on the Stock Exchange.

Furthermore, Law No. 16/2001 on foundations prevented the
agency from auditing foundations owned by both government
institutions and the military, he said.

The Foundation Law provides that a foundation receiving state
aid, foreign assistance amounting to at least Rp 500 million, or
which has assets of Rp 20 billion or more must be audited by a
public accountant.

The BPK has repeatedly demanded that this law be amended to
prevent government-linked foundations from abusing state funds,
which was a common practice during former President Soeharto's
era.

The agency is also adamant that military foundations must be
audited.

For box

BPK chairmanship may be vacant after October

The amendment to the 1945 Constitution has caused fear that
the seats of the Supreme Audit Agency (BPK) executive boards
could be left vacant from Oct. 8 this year, when all the current
board's members end their tenure.

In the amended 1945 Constitution, BPK's executive board,
including the head, deputy head and members, is to be selected by
appointed in the selection process by the House of
Representatives and the Regional Representatives Board (DPD),
Antara reported.

However, DPD will not be established pending the general
election in 2004.

"The Head, deputy head and members of BPK will end its tenure
on Oct. 8. We have report it to the President and the speaker of
the House of Representative," Satrio Budihardjo Joedono said in
his report during the annual session of the People's Consultative
Assembly on Friday.

It sparks question whether the absence of BPK's board members
will render the agency unable to do their auditing works. -- JP