'Serious mistakes' seen in audit report

JAKARTA (JP): Chief of the Supreme Audit Agency (BPK) Satrio B. Yudono said on Tuesday that there were "many serious mistakes" in the PricewaterhouseCoopers (PwC) audit report on the Bank Bali scandal.

He said many of the personal bank accounts audited by PwC had turned out to have no connection at all with the Bank Bali affair.

"The PwC audit has many serious mistakes, so it's not proper for BPK to make such a clamor about it," he said at a media conference.

"But this doesn't mean that the credibility of PwC is undermined."

Yudono said that despite pressure from the International Monetary Fund (IMF) and other multilateral creditors, one of the reasons why his agency declined to disclose the complete PwC audit report was to protect people who were mentioned but who were not guilty.

He reiterated that the existing banking secrecy law and Law No. 5/1973 on BPK prohibited the agency or PwC from disclosing the full audit report, except to the police and the attorney general.

Yudono said violation of the BPK law could carry a six-year jail sentence.

However, Ichsanuddin Noorsy, a member of the House Special Investigation Team on the Bank Bali Scandal, disputed Yudono's argument, pointing out that both the Constitution and the central bank law requires BPK to submit its audit report to the House of Representatives.

"The PWC audit of Bank Indonesia was part of the BPK special audit on the central bank which was made at the request of the House," Noorsy said.

He said Article 23 of the Constitution stipulates that BPK is required to submit its audit report to the House. Article 59 of the central bank law stipulates that BPK can perform a special audit on the central bank only at the request of the House.

"So BPK's refusal to fully disclose the PwC audit report is only a high-level conspiracy to protect influential people," Noorsy added.

PwC was assigned last month by BPK to audit the central bank in relation to the Bank Bali scandal. The international auditor completed its audit on Sept. 8, but at the request of the agency, a full report was only submitted to the police. The complete version contains the audited result of personal bank accounts in which funds derived from the scandal were allegedly deposited.

BPK distributed a condensed report of the PwC audit to government officials, legislators and journalists.

But the IMF has insisted that the government disclose the complete PwC audit report to the Independent Review Committee (IRC), which provides advise to the government on the economic reform program.

"The IMF has to play by our rules," Yudono said.

He urged the IMF and the public to wait until a police investigation had handed over its findings to the court.

"I've told the IMF to wait for the court process to be completed."

Yudono dismissed concerns that the police and the court system would fail to resolve the Bank Bali scandal satisfactorily.

"There's no reason for the police to deviate. All eyes are closely watching this case."

He urged the government push the police and the court in order to swiftly resolve the scandal.

"If this scandal is not resolved satisfactorily, the government will be doomed," Yudono said, pointing out that confidence in the country would plunge.

The IMF, the World Bank and the Asian Development Bank have suspended aid disbursement to Indonesia until the government resolves the scandal satisfactorily.

The Bank Bali scandal stems from the questionable transfer in early June of Rp 546 billion (US$80 million at the June rate) from the bank to PT Era Giat Prima (EGP) as a commission to help the bank recoup some Rp 904 billion in interbank loans on a closed-down bank.

The bank should have not used the service of EGP because the interbank loans were guaranteed by the government.

The Rp 546 billion commission was returned after the scandal was widely publicized in late July.

There have been allegations, most of which were proven by the audit, that the inner circle of President B.J. Habibie used EGP to help raise money for political purposes ahead of the upcoming November presidential election.

One of the main purposes of the PwC audit was to trace the flow of funds from EGP to specific bank accounts and the sources of funds back to the escrow account at Bank Bali.

PwC told the House at a recent hearing that "PwC successfully traced up to 150 separate banking transactions involving large amounts of money being distributed over a short period of time.

"Our detailed report describes those transactions and identifies members of the House and senior public and political party officials who appear to have received funds. Given that we're not able to complete our fund tracing, we do not know if there are additional persons who received funds".

PwC said that due to time limitations and restrictions enforced by the banking secrecy code, it was unable to audit the personal bank accounts of certain people. (rei/vin)