Public demands up for BPK to audit military foundations

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.