Treasury law leaves room for graft
Rendi A. Witular, The Jakarta Post, Jakarta
Chairman of the Supreme Audit Agency (BPK) Satrio B. Judono expressed disappointment on Friday with the newly endorsed State Treasury Law as it fails to empower state treasurers to reject any unscrupulous demands from their superiors that may lead to the corruption of state funds or assets.
Satrio said that with the absence of such authority in the law, BPK feared that the state treasurers could be squeezed by other officials or their superiors to approve questionable transactions or disbursement of state funds.
"The law is not what we had expected... The country's management of state funds will remain as it was in the old days, with messy internal control at state institutions over the disbursement of the funds," said Satrio in a press briefing.
The House of Representatives passed on Thursday the long- awaited state treasury bill into law, which Minister of Finance Boediono boasted will greatly improve the management of state funds and assets and thus help prevent corruption.
Satrio explained that the treasurers should be independent of their superiors and other officials in order to help curb corruption in the management of state funds and assets.
However, under the new law the treasurers are still restricted by their superiors although they are personally responsible for any losses of state money under their management.
"I am pessimistic about the law... Good management of state funds should come first from strong and reliable internal control," said Satrio.
BPK had proposed to the government and the legislators a couple of years ago to include several articles that would give the treasurers the power to reject improper payment orders that may lead to the leakage of state funds or other irregularities.
For instance, the treasurers must be able to reject a proposed transaction if there are no funds available in their accounts, preventing them from taking funds allocated for other purposes.
The agency had also proposed an article that would strongly regulate what things could and could not be done in managing state finances, so that violations committed by treasurers could be easily defined.
However, Satrio said that the government had rejected BPK's proposal, saying such a huge authority for a treasurer could obstruct the flow of fund disbursement, thus disturbing the country's overall economic development.
"The government once said that a strong treasurer could foul up development. That is why they rejected our proposal," he said.
The State Treasury Law provides rulings on how state funds, assets and debts should be managed by government officials both at the central government and local administrations. This law is crucial to allow the enforcement of the State Finance Law, which provides basic principles in public financial management, approved by the House in March this year.
The House is expected to pass into law another bill on state financial accountability to support the implementation of the State Finance Law.
All these three laws, the drafts of which had been submitted to the House in September 2000, are designed to replace Dutch laws on treasury management.
The lack of political will to combat corruption has positioned Indonesia this year as the second most corrupt country in the Association of Southeast Asian Nations (ASEAN) after Myanmar, and the 10th in the world, according to the Berlin-based Transparency International.