Independent auditor needed for bank fund: Economist

Independent auditor needed for bank fund: Economist

JAKARTA (JP): The planned investigative audit on the bank
blanket guarantee fund must include an independent auditor due to
the lack of public confidence on the Supreme Audit Agency (BPK),
according to an economist.

"We need to question, can we really trust an audit by BPK,"
said director of University of Indonesia's Institute for Economic
and Social Research (LPEM) Mohamad Ikhsan on Thursday.

Ikhsan cited the Pertamina case an example where an
independent auditor managed to uncover the massive abuse of funds
within the state-owned oil and gas company.

"If I were the minister of finance I would appoint an
independent auditor to assure the public that there was no
misuse,"he told journalists on the sidelines of a seminar on
corporate governance by the Center for Strategic and
International Studies (CSIS) here.

"But then of course this proposal would be rejected by BPK
because it would harm its reputation," Ikhsan added.

The House of Representatives earlier said that it would ask
BPK to conduct in an investigative audit into the bank guarantee
fund, kept under a special government account number 502 at Bank
Indonesia, amid suspicion of misuse.

The House wanted BPK to start the investigative audit next
week.

The fund was launched by the government in early 1998 to
finance the so-called blanket guarantee fund on banks in a bid to
help maintain confidence in domestic banks in the wake of the
1997 financial crisis.

Under the program, the government will guarantee all
obligations of closed down banks.

In November 1997, the closure of 16 private banks created
widespread panic among depositors, which threatened the overall
domestic banking system, due to the absence of the blanket
guarantee scheme.

Elsewhere, Ikhsan said that if indeed the funds were misused,
then the ministers in power at the time of the misuse must be
held responsible.

"The account was opened in 1999 so there are three ministers
accountable for it -- Bambang Subianto, Bambang Sudibyo, and
Rizal Ramli," Ikhsan said, explaining that the use of the funds
were only allowed with the approval of the minister of finance.

However, he explained that the misappropriate use of the
account should also be carefully looked into, for it could be
done for with a reason to avoid greater loss.

The government had reported that between Jan. 26, 1998 and
Aug. 25, 2001, Rp 25.75 trillion was used by IBRA and Rp 23.6
trillion was used by BI, while the balance was Rp 4.39 trillion.

However, the details of the cash flow have not been verified,
and there have been suspicions that the funds were allegedly
misused.

The demand for the investigative audit was made after the
House approve the government plans to issue an extra Rp 40
trillion worth of bonds to replenish the blanket guarantee
fund.(tnt)