TNI asked to explain budget irregularities

TNI asked to explain budget irregularities

Muninggar Sri Saraswati and Tiarma Siboro, The Jakarta Post, Jakarta

A legislator hinted on Tuesday that the Indonesian Military (TNI)
might not get House support for a rise in the defense budget if
it failed to explain irregularities in the use of state funds.

"We will ask for clarification from TNI Headquarters over the
report (of irregularities). We demand to know whether the
irregularities were due to corruption or markups, or were the
result of technical problems," legislator Amris Hassan of the
Indonesian Democratic Party of Struggle (PDI Perjuangan) told The
Jakarta Post.

Amris was commenting on a report released by the Supreme Audit
Agency (BPK), which showed irregularities in the use of state
budget funds in various government offices, institutions and
state enterprises, including the Ministry of Defense. The report,
submitted to the House of Representatives on Tuesday, revealed
758 cases of irregularities involving Rp 6.421 trillion (US$710
million) between January and June of this year, or 17 percent of
the total value of the expenditure that was audited.

The BPK report showed irregularities in the use of Rp 4.2
billion of foreign borrowings intended for providing export
credit facilities in the Ministry of Defense, the Indonesian
Military and the National Police.

The Air Force topped the list, with irregularities amounting
to 100 percent of its total Rp 745 million budget allocation.

The Army, perceived as the most corrupt of the services, was
found to have misused Rp 250 million, or 18.3 percent, of its
budget.

Irregularities of between 3 percent and 10 percent are widely
regarded as being acceptable, although the BPK sets the limit at
3.8 percent.

"The BPK officials also said around 50 of the 213 transactions
made in the 2001-2002 period must be canceled as there were no
loan agreements between the military and the creditor countries,"
Amris said.

Amris, deputy chairman of House Commission I on political,
security and foreign affairs, expressed disappointment following
the report, especially as his commission had supported the TNI's
proposal for a rise in the defense budget.

"Should the TNI fail to explain the irregularities, I don't
think we (Commission I) will support their proposal (for an
increase)," Amris told the Post after attending a closed-door
meeting between Commission I members and BPK officials at the
BPK's offices on Tuesday.

The meeting was held to discuss a proposal from the Ministry
of Defense to raise its budget from Rp 16.162 trillion (US$18
million) last year to Rp 19.487 trillion in 2003.

"The BPK report shows that the irregularities were caused by
various problems, including lengthy procedures in entering into
transactions with foreign countries. This resulted in military
weaponry being obsolete by the time it arrived here," Amris said.

The lack of field preparation as well as poor human resources
were also blamed for inefficiency in TNI spending. BPK officials
also complained of the military's poor data collection and
reporting system, and an overall lack of transparency, Amris
said.

He admitted that the members of Commission I, who also sit on
the House Budget Committee, had failed to monitor and control the
use of the defense budget in the defense ministry and TNI.

"We can only argue for a rise (in the budget) but cannot
control the use of funds," said Amris.

To improve the monitoring of military spending, the commission
planned to set up a small group to intensify dialogue with the
TNI and follow up on the BPK report. The team would also decide
whether or not to impose sanctions in respect of funds misuse or
price markups.

Meanwhile, Air Force spokesman First Air Marshall Edy Harjoko
denied allegations of irregularities in his organization.

"But we will follow up on the report," Eddy told the Post
Tuesday.