House OKs bill on management of public finance
Dadan Wijaksana, Jakarta
The House of Representatives approved the public finances accountability bill on Monday, the last installment of a three- part legal package aimed at helping to curb the misuse of state funds.
The package was first proposed in 2000. The House passed two other bills into law earlier this year -- one on the state finance and the other on the state treasury.
"The government believes the newly completed legislation will lay solid foundations for the management of the state finances as part of the effort to promote good governance and clean government," Minister of Finance Boediono told lawmakers.
A variety of surveys and reports have confirmed that irregularities and the misuse of state funds have been rampant in state institutions and companies, but follow-up action has been relatively rare, due in part to a lack of legal instruments.
It is hoped that the new legislation will be able to prevent corruption from flourishing any further and thus minimize potential losses on the part of the state. Article 26 sets out sanctions for any person that has the authority to follow up on audited reports but fails to do so.
Irregularities are defined as any discrepancies not properly accounted for in the use of state funds as between the budget estimates and the amounts actually spent.
In addition to previous legislation -- which basically set out a grand design on how state finances should be managed in the most professional, transparent and accountable ways -- the third law deals with sanctions and punishments for those responsible for the misuse of state funds.
The available punishments range from fines to jail terms.
Three of the 29 articles are devoted to punishments, with the penalties ranging from Rp 500 million (about US$) to Rp 1 billion in fines, and/or 1.5 to 3 years in prison.
Not only bureaucrats, be they officials from state institutions or state enterprises, but also auditors from the Supreme Audit Agency (BPK) can be charged under these articles.
Other articles on the BPK also facilitate greater public access to information regarding the financial position of state companies, including those already listed on the stock market.
In the case of state firms already governed by other legislation -- such as the Capital Markets Law for listed state firms -- the BPK still has the power to review and evaluate audit results.
Role of BPK: * BPK will carry out the auditing of state financial management for all state institutions * For audits carried out by public accountants as required by other legislation, the results should be reported to the BPK and made public
Criminal Sanctions: * Any person who refuses to produce documents or information necessary for the auditing process faces a term of imprisonment of up to 1.5 years and/or a fine of up to Rp 500 million * Any person who prevents, hampers or thwarts the auditing process faces a term of imprisonment of up to 1.5 years and/or a fine of up to Rp 500 million * Any person who falsifies or creates false documents faces a term of imprisonment of up to 3 years and/or a fine of up to 1 billion * Any auditor who misuses any document obtained during the auditing process faces a term of imprisonment of up to 3 years and/or a fine of up to Rp 1 billion