Managing Aceh relief

Managing Aceh relief
and reconstruction

As the initial horror of the tsunami catastrophe recedes and
emergency aid flows into the most affected areas, commentators
are raising doubts over the management of the billions of dollars
committed for relief and the reconstruction of Aceh.

Urip Hudiono (The Jakarta Post, Business, Jan. 10), wants the
funds kept separate from the State Budget, and quotes economist
Faisal Basri and non-governmental organizations (NGOs) as
preferring an independent body to monitor and manage the aid
funds in Indonesia, because the public still doubts the
government's credibility, as it still plagued by corruption.

Now is not the time to establish yet another public body that
bypasses financial management and budget legislation. The
Indonesian government must show what good governance is about by
bringing all aid within budgetary authorization and reporting.
The Aceh aid is public money, whether provided in cash or kind.
Under Law 17/2003, the President, the legislature and agency
heads are responsible for these public funds.

The Ministry of Finance must take responsibility for ensuring
aid funds are managed properly. This includes reporting these
monies in whole in government financial statements that show
total revenues received, how those funds have been expended and
the assets and liabilities created. The size and nature of
revenues and expenditure from the tsunami tragedy will be
extraordinary, therefore they need separate disclosure in a note
to the government's consolidated financial statements. These
financial statements need to be signed off by state auditors.

The appropriate financial reporting standards to be applied
are the international public sector reporting standards (IPSASs)
issued by the International Federation of Accountants for
governments using either the cash and accrual bases of
accounting.

Indonesia needs to demonstrate leadership and good management
of government finances to the international community on this
occasion. As Endy Bayuni says (the Post, Jan. 10, God's grace,
good governance and our reputation), if the donated funds for
Aceh are corrupted, it will bring terrible shame to the nation.

GRAEME MACMILLAN
Director
Public Management International Institute
Jakarta