Public demands up for BPK to audit military foundations
Kurniawan Hari, The Jakarta Post, Jakarta
The Supreme Audit Body (BPK) chairman Satrio Budihardjo Joedono blamed Law No. 16/2001 on foundations on Sunday for preventing his office from auditing military foundations, but fell short of demanding the law be scrapped.
An audit conducted by BPK is necessary to determine whether or not military foundations are using state funds to develop their business empires, Joedono told The Jakarta Post on Sunday.
Joedono was reacting to public demand that BPK should audit military foundations on the grounds they were owned by a state institution -- the military.
"The state audit body should have access to information about the foundations run by the defense forces because the military is a state institution," military analyst of the Centre for Strategic and International Studies (CSIS) Kusnanto Anggoro said on Sunday.
The Indonesian Military have dozens of foundations involved in business. The Army's Kartika Eka Paksi foundation allegedly has 26 other companies dealing in a variety of businesses, ranging from shrimp farming to electronics.
Inkopad (the Army's Cooperative Center) allegedly has 12 affiliated companies. The Air Force, the Navy and the police are also more or less the same. The Red Beret Corps Foundation even attended training held by Ikadin on how to master business.
However Law No. 16/2001 on foundations gives the authority to the public auditor, instead of the state audit body, to examine financial reports of foundations.
"Let the public interpret the law themselves," Joedono said, when asked if the law hampered the work of his office.
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 an assets worth Rp 20 billion, must be audited by a public auditor.
Joedono said his office could only ask the public auditor to carry out an audit of military foundations using the standard of state audit (SAP) and to submit a copy of the audit results to his office.
Kusnanto also urged the military to hand over their business enterprises to the government, so they could focus on being professional soldiers.
"Military business activities through various foundations should be terminated, in order to boost the professionalism of the military," he said.
"Any problems or irregularities emerging from military business practices could not be resolved until the businesses were controlled by the state," said Kusnanto, urging President Megawati Soekarnoputri to issue a decree ordering the takeover of military businesses by the state.
If the military's business enterprises are sold to the public, the military could be compensated with 70 percent of the sale proceeds, with the remaining 30 percent going to the state, he said.
There has been strong speculation that profits from military businesses only benefit high-ranking military officials, while low-ranking soldiers remain strapped for cash.
"Only five percent of the military's business profits is given to low-ranking soldiers," Kusnanto added.