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.