House mum on investigative audit for IBRA

House mum on investigative audit for IBRA

Leony Aurora, The Jakarta Post, Jakarta

The House of Representative needs to submit a formal request for
the Supreme Audit Agency (BPK) to conduct an investigative audit
on the Indonesian Bank Restructuring Agency (IBRA), says a senior
audit official.

BPK head Satrio "Billy" Budiharjo Joedono responded to
journalists on Friday that the House had not made such a request,
even though "reporters have repeatedly asked (about this issue)".

Several lawmakers have told the media over the past few weeks
that the House might ask the audit agency to conduct an
investigative audit on IBRA. Top government officials and
analysts, including State Minister of National Development
Planning Kwik Kian Gie and economist Faisal Basri, have also
urged an audit into IBRA for possible cases of corruption or of
legal violations during the agency's five-year existence. IBRA
is scheduled to be closed down on Feb. 27, when its mandate
expires.

Billy also said the House needed to explain what it meant by a
comprehensive investigative audit, as an investigative audit
verified whether an action or activity had been properly
executed.

"During IBRA's operation, millions of measures and activities
have been implemented," he said. "(Of these) Which specific ones
need to be checked for their having been properly executed?"

Responding to a question as to whether or not the BPK would
undertake such an audit on its own initiative, Billy said the
agency would focus on a performance audit.

The BPK launched a performance audit in early January to see
if IBRA had carried out its mandate, which was issued in 1998
after the monetary crisis.

Three groups of key performance indicators are used in a
performance audit: The first group, used to determine the success
of the recapitalization program, comprises capital adequacy
ratio, non-performing loans ratio, loan to deposit ratio and
return on equity.

The second, comprising debtor participation, number of credits
resolved and credit restructuring implementation, assesses the
asset restructuring program.

The third assesses the recovery of bank liquidity funds and
includes divestment timing, consultancy cost and the recovery
rate of government funds injected into troubled banks during the
crisis.