Minister's right to hold public funds queried

By Didik J. Rachbini

The recent controversy over a Rp 50 billion transfer to the Minister of Mines and Energy I.B. Sudjana's bank account horrified many people. Economist Didik J. Rachbini argues that a direct transfer of public funds to a ministry account is a procedural mistake.

JAKARTA (JP): The widely publicized cash transfer to the Minister of Mines and Energy's bank account indicates there is increased government control of many matters.

The role of the House of Representatives has also grown in importance but its influence is governed by individuals' initiative. And as the legislators' term is approaching its end any vocal legislator will risk being replaced.

Thus, deviations in the procedure for handling public budget revenues and allocations will continue to occur.

To prevent them happening too often the state's sources of revenue should be planned and submitted by the government to the House. Any budget revenues and allocations outside this procedure should be considered illegal.

Nevertheless, the House cannot do much to influence the government's proposals on account of House members' lack of expertise. Thus, the question of procedure and control is not adequately addressed.

Apart from procedural aspects, the Sudjana case shows that the government's dominance of the legislators is still very pronounced. However, this cannot be maintained indefinitely because the demands for transparency and implementation of good governance are growing stronger. A more advanced community is demanding improvements in the government's performance in implementing its public policies.

There are a number of interesting lessons to be derived from this case:

First, the government's dominance of public policies has been going on for quite a while. Various decisions are made by public officials without considering the people's aspirations. Therefore, the existence of public budget revenue accounts directly under the minister is not considered a deviation from standard procedure.

Second, the transfer of public funds into the hands of the government is an error which can lead to further deviations. The private sector is a different story. Control of private budgets is not needed because if a director of a private company makes a decision-making error, the risks and consequences will be borne directly by the company concerned, not the public. However, if a government official makes a mistake, the risks and consequences will be borne by the whole community.

Therefore, the process and mechanisms of public budget decision making require an element of public control and must be based on the principles of transparency and accountability.

Public control of the Minister of Mines and Energy's account budget is difficult because the mechanism for revenues and allocations is outside the existing procedure. A procedural error like this should not occur if public officials and decision makers are aware that the budget is a public budget which requires an element of public control.

According to Tadjudin, the legislator who blew the whistle on Sudjana, "what is orderly can still be corrupted, let alone what is non-procedural like this."

I share his opinion because any order in budget control is hard to apply. Apart from the account of the Minister of Mines and Energy, there are many more procedures of public budget revenues and allocations which are not accountable.

Third. So far the House's right to modify the budget has not been used because of the government's domination of decision making. Therefore, the House needs to be strengthened as an institution by having more experts.

Although standard procedures in public budget planning are applicable and pass House scrutiny, the budgets submitted by the government are not changed much. Although the legal procedure is accountable, deviations in implementation often take place.

Fourth, the process of decision making regarding the public budget is part of the implementation of good governance and transparency where the government must be held responsible.

This principle is difficult to carry out as long as the people and the House's control over the government is weak.

Moreover, an ineffective legislature hampers efforts to improve national governance. If this continues an opaque public policy will persist, characterized by strong corporatism, nepotism and cronyism.

The writer is a lecturer at the University of Indonesia.