IBRA financial audit gets disclaimer opinion

IBRA financial audit gets disclaimer opinion

JAKARTA (JP): Independent auditor Hans Tuanakota Mustofa/
Deloitte Touche Tomatsu (HTM/DTT) has given a disclaimer opinion
on the 1998 to 1999 financial audit of the Indonesian Bank
Restructuring Agency (IBRA).

IBRA deputy chairman Sumantri Slamet said on Friday that the
disclaimer was given due to uncertainty about the validity of
financial data coming from IBRA, closed down banks and other IBRA
"working partners".

Sumantri said in a news conference that IBRA would take
corrective action as a follow-up to the audit result.

He said that the corrective action plan was expected to be
completed by July and implemented in August.

IBRA has made the results of the audit public, available on
its website, www.BPPN.go.id.

A disclaimer means that the auditor declines to give its
opinion on a financial audit. An auditor usually gives an
unqualified opinion or qualified opinion.

Coordinating Minister for the Economy, Finance and Industry
Kwik Kian Gie said earlier this week that he would be surprised
if the auditor did not give a disclaimer opinion considering the
incompleteness of data within IBRA as former bank owners or
debtors had destroyed the data.

Centre for Strategic and International Studies (CSIS)
economist Pande Raja Silalahi said that the disclaimer opinion
could further harm the reputation of IBRA if the agency failed to
effectively explain the reason.

"If you have a red (a failure) rapport, you must explain it,
whether it's because you've been sick or you have been with a
bunch of bad boys," he said.

But Sumantri was confident that the disclaimer opinion would
not affect the agency's reputation.

He said the public should understand that the complexity of
issues faced by IBRA during the audit period in which many things
were dependent on external institutions.

Sumantri recalled that when the government closed down banks
in 1998 and 1999, IBRA-assigned auditors found difficulties
entering the banks to get "a picture of the banks."

"This kind of problem caused the auditor (Hans
Tuanakota/Deloitte Touche) to have doubts about the data," he
said.

There have been reports that former bank owners tried to
prevent IBRA auditors from immediately auditing the banks' assets
after the closure in a bid to take some of the assets away before
the government took over.

"I don't think the disclaimer will harm IBRA's reputation,"
Sumantri said.

Indeed, IBRA will be in serious trouble if this happens. The
agency manages some Rp 600 trillion worth of assets transferred
from the banking sector. The agency must restructure and dispose
of the assets to raise cash to help finance the state budget.

A unit of the finance ministry which was established in early
1998, IBRA has been under fire for its slow progress in the
restructuring of the assets and their disposal.

The agency is targeted to raise Rp 18.9 trillion this year,
but has so far only raised about Rp 2.8 trillion.

Asked if the disclaimer would lead to the uncovering of a
crime within the agency or the banking industry, Sumantri said
that to prove it an investigative audit would need to be
conducted.

"And so far there has been no demand for an investigative
audit," he said.

Elsewhere, Sumantri said that on March 22, the finance
minister had enacted a new accounting policy, dedicated to IBRA.

He said consultations regarding the policy had earlier been
conducted with the Indonesian Accountants Association (IAI).

"The new audit process is the first experience for both IBRA
as auditee and HTM/DTT as the auditor," he said.

"Based on the new accounting policy, IBRA will embark on
changes or conversion of previous systems and postings into the
new format of accounting policy," he added.(rei)