'Serious mistakes' seen in audit report

'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)