Urip Hudiono, Jakarta – The Supreme Audit Agency (BPK) has issued yet another damning report on the management of the state finances, revealing 5,377 cases of irregularities worth nearly Rp 48 trillion (US$5.3 billion) in the spending of public funds during last year's second semester.
The BPK's latest audit report is particularly alarming given that the number of cases and the sums involved represent a significant increase on the 2,128 cases worth Rp 7.12 trillion reported by the agency for the same period in 2004.
Among the financial improprieties that BPK chief Anwar Nasution reported Tuesday to a House of Representatives's plenary session was a finding that Rp 2 trillion and $27.58 million in tax and non-tax revenues from 11 ministries had not been reported to the Finance Ministry's treasury unit.
"We have also reported two cases that appear to involve corruption to the Attorney General's Office for further investigation," Anwar said.
"These cases consisted of a Health Ministry project that potentially caused losses to the taxpayer of Rp 1.75 billion, and the State Secretariat's management of Rp 199.75 billion-worth of state assets at the Gelora Bung Karno sports stadium and the Kemayoran complex." Other significant findings include inefficiencies and losses of up to Rp 253.75 billion in various government procurement projects, and Rp 1.5 trillion in questionable debt reductions and bad loans involving a number of dissolved banks that had to be guaranteed by the government.
The audit was conducted from July to December 2005 and involved 534 audit items worth Rp 402.13 trillion, and $643.84 million in funds covered by the year's state budget, local government, state-owned enterprise (SOEs) and regional enterprise accounts.
The BPK's SOE audit revealed inefficiencies and losses of up to Rp 6 trillion and $573.83 million in government investment funds managed by the SOEs.
Its audit on the regions, meanwhile, uncovered Rp 423 billion in unreported tax revenues and Rp 646.74 billion in procurement project inefficiencies and losses.
Anwar lambasted the fact that the government has been inordinately slow in following up on the BPK's findings, having only taken action in respect of less than half of the 16,433 cases of irregularities, worth more than Rp 132.49 trillion, that the BPK has reported since 2003.
"This shows a lack of seriousness on the part of the government in establishing good governance in the state finances," he said.
Anwar further said that the BPK hoped to complete its full audit on the government's 2005 state budget accounts this July.
In the four years since 2001, the BPK has given a disclaimer opinion on the government's annual accounts – refusing to approve them due to the persistence of irregularities despite the coming into force of the new State Finance Law and Treasury Law.
President Susilo Bambang Yudhoyono's administration, elected in 2004, has said that combating graft and establishing good governance are its top priorities. The 2005 state budget was the first budget to be drafted and administered by the Yudhoyono government.
Separately, Finance Minister Sri Mulyani Indrawati was quoted by Antara as saying that the government would soon issue a regulation to help SOEs recover their claims and settle debts, without affecting the BPK's constitutional right to audit them. A number of state banks plagued by rising non-performing loan levels have requested more flexibility from the government in dealing with their financial problems.