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