House OKs bill on management of public finance
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