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.