Urip Hudiono, Jakarta – Despite a number of improvements over the years, the Supreme Audit Agency (BPK) says that significant irregularities are still commonplace in the management of public funds, and that the government is slow to take follow-up action on its findings.
In its latest audit report presented Wednesday to a House of Representatives plenary session, the BPK revealed six cases where there was clear evidence of malfeasance during this year's first half, involving a total of Rp 779.7 billion (US$86 million) in taxpayer funds.
During the same period last year, the BPK found only four cases of malfeasance involving Rp 123 billion in potential losses to the taxpayer. Meanwhile, in the second semester, the BPK found only one case of malfeasance, which involved the reporting of non-tax state receipts worth Rp 24 trillion. This paucity of cases over the last two years compares to thousands of cases of malfeasance involving at least Rp 48 trillion in 2005.
The findings for this year's first semester, however, still give a total of 36,009 cases of financial irregularities uncovered since 2004, with less than a quarter of them having been followed up on, BPK chairman Anwar Nasution said. Of the 5,717 cases that resulted in actual losses to the state, full recovery had been achieved in only 860 of these.
"We would, therefore, urge the government to issue a regulation as soon as possible to allow for the transparent recovery of taxpayer losses as provided for by the State Treasury Law," Anwar said. "The government must also continuously improve its accounting systems and capabilities."
The BPK's latest semiannual report was compiled based on the audits it conducted between January and June 2007 on the accounts of 82 ministries, state institutions (including the central bank), 362 local governments, nine state-owned enterprises, and three local government-owned firms.
Also included were the BPK's audit findings on the government's 2006 annual accounts, which were once again given a disclaimer due to a disagreement over auditing of the tax service.
Among the significant cases reported was a financing scheme cooked up by Bank Indonesia's investment house, PT Bahana Pembina Usaha Indonesia (BPUI), for Credit Asia Finance worth Rp 212.8 billion and $34.8 million.
The BPK also highlighted an aircraft leasing deal worth Rp 27.2 billion between PT Merpati Nusantara Airlines and AF Aerospace, and the government's ineffective Rp 75 million injection of capital into the state-owned carrier.
Problems in local government accounts, meanwhile, included a suspicious Rp 106.6 billion shortfall in East Aceh regency's budget, Rp 11.8 billion in fictitious procurements in Purwakarta regency, and a Rp 33 billion loss due to an overdue land-leasing deal in Cilacap regency.
More irregularities could yet surface this year as the BPK has so far only managed to audit the budgets of 362 out of 467 local governments.
The BPK has also been involved in a row with the Supreme Court over the way it accounts for court fees. The dispute was recently resolved when the nation's highest court finally opened its doors to BPK auditors.
Regarding BPK audits of the tax service, Anwar said he expected the Finance Ministry and the BPK to arrive at a similar resolution soon so that audits could be conducted without compromising confidentiality.
"We will carry out the audits as we do at the central bank and state banks. Has anyone heard of the personal data of any customers being leaked by the BPK?" Anwar asked.