SOEs uncommitted to fight corruption, BPK says
Rendi A. Witular, Jakarta
The Supreme Audit Agency (BPK) criticized state-owned enterprises (SOEs) and public accountants for being reluctant to support the agency's drive to fight corruption and collusion by refusing to conduct special audits to spot any irregularities.
"The managements of some SOEs order the accountants not to conduct compliance audits for fear that irregularities in the SOEs may become public knowledge. Some of the accountants agree with the request," said Amrin Siregar, a BPK auditor overseeing SOEs, on Friday.
The Indonesian Accountants Association has a regulation obliging public accountants to check that SOEs comply with existing regulations, such as those on the tender process, dividend allocations and payments, and goods procurement.
However, Amrin said most public accountants ignored the regulations, putting many SOEs at risk of becoming victims of corruption and collusion.
Amrin said the SOEs technically complied with the audits on financial, performance and administration, but such audits were deemed insufficient to ensure good corporate governance and prudent management of state assets.
To protect the interests of the public and ensure good corporate governance, the BPK sent letters to the Office of the State Minister for State Enterprises, the Ministry of Finance and some 164 SOEs in May 2003, announcing that the agency would audit the compliance of SOEs with existing regulations and their internal controls.
At its own initiative, the BPK has audited some 23 SOEs, while the remaining 141 SOEs were ordered to submit their 2003 audited financial reports to the agency by July 2004. The audited financial reports should include audits of regulation compliance and on internal controls.
However, according to the BPK's first semester report, which submitted to the House of Representatives last week, some 47 SOEs, both listed and non-listed, failed to submit their financial accounts by the July 2004 deadline.
The report said the listed SOEs argued the BPK order was in conflict with Law No. 8/1995 on capital markets, which stipulates that listed companies must be audited by public accountants (not the BPK).
Among the listed companies that have not submitted their accounts to the BPK are PT Bukit Asam, PT Timah, PT Perusahaan Gas Negara, PT Indofarma, PT Kimia Farma, PT Semen Gresik, PT Telkom and PT Aneka Tambang (Antam).
Antam corporate secretary Dohar Siregar said, however, that the company had never received a request from the BPK, and had never been given any warning letter from the agency.
"It is impossible for Antam not to meet the BPK demand. Maybe their letter did not reach us," said Dohar.
The report also said the BPK had rejected the financial accounts of Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Mandiri, Bank Tabungan Negara, PT Adhi Karya and PT Danareksa for failing to include audits on regulation compliance and internal controls.
Based on the state financial accountability law, the BPK is allowed to audit all SOEs.
However, for publicly listed SOEs, the BPK can only audit the companies after receiving their financial reports audited by public accountants.
The BPK report also said non-listed SOEs had refused to submit their financial reports to the agency after the deputy to the Office of the State Minister for State Enterprises, Ferdinand Nainggolan, issued a letter suggesting that SOEs should be audited solely by public accountants.