Official denies 40% graft of DAU

Official denies 40% graft of DAU

Berni K. Moestafa and Pandaya, The Jakarta Post, Jakarta

The Director General for Regional Autonomy Sudarsono denied on
Tuesday reports that unscrupulous local government officials had
siphoned off nearly 40 percent of regional decentralization
subsidies, describing the alleged amount as illogical.

Sudarsono said that even if corruption had taken place, the
amount was likely less than 10 percent of the total funds
disbursed.

"I, the director general for regional autonomy, deny the
statement by Pak Benny," he was quoted as saying by detik.com.

Sudarsono was responding to a claim made by the chairman of
the House of Representatives' budget committee, Benny Pasaribu.

Benny told reporters on Monday that corruption was rampant
among regional authorities, who are being accused of misusing the
so-called General Allocation Fund (DAU).

Citing unconfirmed reports, he said the amount equals nearly
40 percent of the DAU that the central government had disbursed
so far, to assist less well-off regions.

He further alleged the massive graft occurred in almost every
region, at about the same proportion of nearly 40 percent.

But Sudarsono said it was unlikely that local officials could
have taken nearly 40 percent of the DAU they received.

"This is how the logic works: most regions spend 75 percent of
their DAU on routine spending for civil servants. If the abuse
was 40 percent, then what are they (civil servants) supposed to
live off of?"

"Thus far they have been paid normally. So the figure (40
percent) itself must be wrong," Sudarsono explained.

However, he did not totally rule out the possibility of
corruption in the use of the DAU.

But according to him, the amount is unlikely to be more than
one third of the remaining DAU after 75 percent was spent on
routine spending. This would equal less than 10 percent of the
total DAU.

Sudarsono also said that Benny's comments would only further
strain relations between Jakarta and regional governments.

The central government has earmarked some Rp 60 trillion
(about US$5.75 billion) for the DAU in 2001. Its disbursements
began last January which coincided with the regional autonomy
laws.

The DAU allows regions to better cope with regional autonomy.

Meanwhile, Benny on Tuesday backed down slightly from his
allegations, saying the amount of the corruption varied from
region to region.

He said he had found the highest figure to be 40 percent of
the DAU that at least one region had received.

When asked what he based his calculations on to arrive at 40
percent, he said to find out, an audit would be necessary.

He said it was a moral obligation to highlight the abuse of
public funds, and take corrective action against it, starting
with an audit.

Benny had earlier said that the House budget committee would
ask the Supreme Audit Agency (BPK) to do an investigative audit
of the DAU funds.

Sudarsono said he would welcome a plan for the BPK to embark
on an investigative audit.

In a related development, Finance Minister Boediono said he
would request the Development and Finance Control Agency (BPKP)
to audit the use of the DAU.

BPKP is in charge of conducting routine internal audits at
state organs and is already in charge of auditing the DAU.
Whereas BPK is the state's external auditor.

Boediono said in performing the audit, it should be enough to
use only a few regions as samples.

"I think by the end, it all depends on the regions. The
central government won't meddle in this. The use of the DAU is
entirely up to the regions," he said.

Boediono urged provincial authorities to improve the
controlling procedure of the provincial legislative assemblies in
order to detect leakages in regional funds.

Meanwhile, Minister of Home Affairs Hari Sabarno promised to
look into the reports of massive corruption at regional levels.

"We will find out which regional administrations have
misappropriated the funds," Hari told reporters.

Observers have long warned against corruption among local
authorities eating into the DAU, channeled by the cash-strapped
government.

According to Benny almost all of the regional government
officials who had received the DAU had spent the funds to buy
luxuries such as Mercedes Benz cars and property.

Hari said he took the report seriously and would request the
relevant agencies, BPK, BPKP and the Home Affairs Ministry's
Inspectorate General to help follow it up.

The alleged looting of taxpayers' money by regional
governments also raised concerns from Vice President Hamzah Haz.

"It needs a thorough investigation," he said speaking at an
International Literacy Day ceremony.