ICW demands probe into non-budgetary funds

ICW demands probe into non-budgetary funds

Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta

Indonesian Corruption Watch (ICW) renewed its demands to the
Attorney General's Office on Friday to investigate all findings
concerning the off-balance sheet funds in government institutions
and their misappropriation.

ICW's chairman, Teten Masduki, admitted that the spending of
off-balance sheet funds, also known as non-budgetary funds, did
violate existing administrative principles, which ruled all
earnings and expenditures should be recorded in the same balance
sheets.

"However, no matter how weak the evidence held by the state
investigators, the office has to trace down the findings," Teten
told The Jakarta Post, referring to a report on the alleged
misuse of such funds issued in May 2000 by the Development
Finance Comptroller (BPKP).

The report, which consists the audit of the off-balance sheet
funds of the State Logistics Agency (Bulog), claimed
misappropriation of Bulog funds between 1994 and 1998 amounted to
Rp 2.1 trillion.

However, Bulog chief Widjanarko Puspojo later corrected the
figure, saying misappropriation accounted for less than Rp 420
billion.

The BPKP report also revealed that Bulog failed to provide
data prior to that period, concluding that the off-balance sheet
funds were never recorded until the comptroller asked for them.

Teten pointed out that the existence of non-budgetary funds in
government institutions was actually illegal and prone to
corruption since the collection and spending of such extra funds
was out of the public's control.

ICW found that such extra funds also existed in Bank
Indonesia, which were collected from the welfare funds of the
bank's employees; in the Ministry of Forestry from reforestation
funds; and the presidential donation funds from business
contributions.

"It is dangerous if a government institution, which has such
non-budgetary funds, is chaired by a member of a political party.
As the chief of the institution, the official has the right to
disburse the money for the political party's interests, but on
behalf of the official," he added.

He denied remarks, which said that the off-balance sheet funds
could be useful to finance emergency operations, arguing that the
state budget had provided contingency funds for disbursement at
any time.

Many recent graft cases were related to the misappropriation
of reforestation funds and Bulog non-budgetary funds that went to
private institutions and individuals.

The latest high-profile case is on the swindling of Rp 54.6
billion of Bulog funds prior to the general election in 1999. It
implicates big names, including former Bulog chief Rahardi
Ramelan and former minister/state secretary Akbar Tandjung, who
is also the House of Representatives Speaker/Golkar Party
Chairman.

Apart from facing corruption charges in court, ICW deemed that
both Rahardi and Akbar had also violated Presidential Decree No.
16/1994 on state budget, which was strengthened by Presidential
Decree No. 8/1997. The two are also believed to have ignored BPKP
warnings on the annulment of Bulog's off-balance sheet funds in
1999.

Under the decrees, the existence of different balance sheets
in each government institution is prohibited.

Rahardi had sent a letter to former president B.J. Habibie at
that time, asking that the existence of such funds could be
maintained.

It was not clear how Habibie responded to the request, but
Akbar issued a circular to economic and finance ministers on
April 14, 1999. The circular stated that the president did not
ask for any changes to the Bulog funds as long as the chief gave
monthly reports to the president and obtained the president's
approval for each of the funds' expenditures.

BPKP had protested against the circular to the president, but
no response was made.

It was only in June 2000 that a Ministry of Finance decree was
issued, prohibiting the existence of off-balance sheet funds. It
was then applied by the then Bulog chief Rizal Ramli, who cohered
the non-budgetary funds into the agency's account.

Attorney General's Office spokesman Barman Zahir corroborated
the findings, saying the prosecutors had inserted the facts in
their indictment against Rahardi.

"We're not keeping our eyes shut on this matter. Rahardi also
faces charges of ignoring the BPKP warnings and the decrees on
the state budget," he said.