Legal obstacles hamper auditing work, BPK says
Legal obstacles hamper auditing work, BPK says
Fitri Wulandari, The Jakarta Post, Jakarta
The Supreme Audit Agency (BPK) called on the People's
Consultative Assembly on Thursday to scrap or review several laws
it said hampered its work as the sole external and independent
state audit agency, as mandated by the Assembly at its 2001
Annual Session.
The agency said the laws prevented it from auditing
institutions that use state funds for its activities, including
foundations owned by both the military and the civil service, as
well as publicly listed state-owned enterprises (SOEs).
"In order to strengthen BPK's role as the sole external audit
agency of state funds, eliminating and revising legal hurdles is
necessary," BPK head Satrio Budihardjo Joedono said when
delivering the agency's report to the Assembly during its Annual
Session.
Satrio cited Law No. 1/1995 on limited companies and Law No.
16/2001 on foundations as among those laws that hampered his
agency in auditing state finances.
The limited company law, according to BPK, prevents the audit
of the financial reports of publicly listed SOEs.
According to Article 59 of the law, the board of directors of
an SOE must submit an annual financial report to a public
accountant for auditing.
Satrio added that Law No. 8/1995 on the stock market further
prevented BPK from auditing publicly listed SOEs, as it
stipulated that only public accountants who had obtained a
license from the Ministry of Finance and were listed with the
Stock Market Supervisory Agency could audit listed companies.
"BPK has notified the Ministry of Finance and the Office of
the State Minister of State Enterprises of its duty, as the sole
external state auditor, to audit SOEs," Satrio said.
The law on foundations has prevented the agency from auditing
foundations owned by both government institutions and the
military, he said.
Article 52 (3) of the 2001 foundation law stipulates that a
foundation receiving state aid, foreign assistance amounting to
at least Rp 500 million or has assets of Rp 20 billion must be
audited by a public auditor.
The foundation law was initially passed in response to alleged
corruption by former Indonesia strongman Soeharto, who is thought
to have used his labyrinthian social foundations to amass wealth
during his 32-year rule.
BPK has repeatedly demanded that the law be scrapped for
military-controlled foundations.
Earlier this year, Satrio insisted that an audit of military
foundations was necessary to determine whether they were using
state funds to develop business empires.
The Indonesian Military has dozens of foundations involved in
business. Among them are the Army's Kartika Eka Paksi Foundation
and Inkopad, or the Army's Cooperative Center. The Air Force, the
Navy and the National Police also run businesses through their
foundations.
Satrio also told the Assembly BPK submitted the results of its
audit of the 2000 state budget on Dec. 24, 2001. However, BPK was
unable to draw a conclusion on the accuracy of the figures
presented in the state budget report.
"There are fundamental shortcomings in the state budget
report, and the government also failed to follow up BPK's
recommendations," Satrio said.
The agency carried out several audits during 2001, including
audits of Bank Indonesia's financial report, the haj pilgrimage,
at the request of the Ministry of Religion Affairs, and the
export credit facilities at the Ministry of Defense and the
Indonesian Military and National Police headquarters. These were
all performed from July to November 2001.
BPK, however, did not disclose the results of these audits in
its report to the Assembly.