New Members for The Raising of The Supreme Audit Board

Since all attention was on Indonesia’s general election from May to July, 2009, the citizens eyes have been staring at the way to get the new leaders. Nowadays, a new president-VP and house of representative members have been elected, therefore let us now go back to the real problems of Indonesia, as have been campaigned by many candidates.
One big problem faced by Indonesians is still the high level of corruption in the state income and budget spending. The released survey results from Transparency International in 2008 stated Indonesia as the fifteenth most corrupt country in the world with the score on the corruption perception index of 2.6. Instead of its better condition compared with the last government term, there should be a bigger effort to reduce the corruption to the lowest level. One of the bodies which has a central role in combatting corruption is the State Audit Board of Indonesia (BPK).
However, as the supreme audit board, the BPK has released some significant audit reports related to the effectiveness source and usage of state budget, which is many of them have been neglected by many stakeholders because of the general election. Firstly, the report on special purpose audit of the oil sector amounted to 14.58 trillion Rupiah as a lack of state income (Media Indonesia, 23 April 2009). Secondly, the report on 212 cases of financial management irregularities in the coal mining sector totalled 2.69 trillion rupiah and 778.8 million Dollars (Tambang Magazines, May, 2009).

Unfortunately, the audit report on the central government’s Financial Statements give a disclaimer opinion for the fifth time. The local government financial statements also have the relatively same conditions, which are from 191 financial statements, 72 get disclaimer opinion, 8 get adverse opinion, 110 get qualified opinion, and only 1 gets an unqualified opinion. These bad facts are parrallel with low political will of the government to follow up the BPK’s recommendations.
Until May, 2009, the BPK has sent to the law enforcers and Corruption Eradication Commision (KPK), 40 cases of fraud resulting from their audit amount of 3,67 trillion Rupiah and 26.37 million dollars. Also from the audit report of Semester II, 2008, there are potential loses to government money from 126 cases amounting to 1.31 trillion Rupiah, 629 cases of lack of local government income is 2.2 trillion Rupiah, and 212 cases on unaccountably money amount of 1.49 trillion Rupiah. The BPK also reports inefficiencies of state money on local governments expenditure, 205.11 billion Rupiah from 227 cases.
The developments
Many improvements had been taken by the Indonesian Supreme Audit Board since its bureaucratic reform in 2005. Firstly, the BPK has “deployed” its representative offices in 33 provinces as mandated by the constitution. Secondly, the BPK has conducted many special purpose audits such as audit on oil and coal mining sector. In addition, the BPK also has conducted many non-financial audits, like audits on the environment, audits on forest and land fire, audit on the Sidoarjo mudflow, and audits on special grants for education. These developments cannot be imagined would happen in the New Order era.
On the issue of military airplane and helicopter accidents, this has risen a polemic since the Minister of Defence stated that the BPK cannot audit the military equipment effectiveness, because the BPK does not have the military expertise. However, if the public agree that many accidents are caused by a lack of maintenance and might be as a result of a lack of budget, the BPK should have an access to conduct the performance audit on it. In the established democratic country like USA, it’s supreme audit could calculate the effectiveness of bullets and missiles usage by US military, for instance in the Iraq and Afghanistan war. It is fine that the decision to deploy the military is the object of the government and house of representative policy, but supreme audit board has a mandate to audit the performance of its military equipment usage, since it is a kind of non-financial audit.
In late July, 2009, the parliament members plan to form the Board of Financial Accountability to monitor the government budget expenditure (Kompas, 22 July 2009). This action leapfrogs the monitoring process, because it will push the accountability of the government further. This is because, for a long time the House of Representatives as a budget “wachdog” takes very limited action to respond and follow up the BPK recommendations, since they do not have expertise to review the thousands of pages of BPK findings. The upcoming board also has the authority to investigate the fraud not only from the BPK’s reports, but also from citizen’s information.
This development is paralel with the BPK’s effort to legislate the rule of auditee’s obligation to follow up the audit recommendations from the BPK in the limit time of 60 days. In the bill, there is a penalty amount of 500 million Rupiah for the auditees that neglect the BPK recommendations. The data from the BPK website stated that there is a very low percentage follow up of BPK recommendations from the auditees.
Choosing the new board’s members
Until nowadays, the BPK has been conducting full financial audits, with minor sampling related to local government spending money on special purpose audit and performance audit. It will be an advanced development if the next new members of the BPK focus on performance audit and investigative audit. The BPK should form a special unit in which could act everytime it is needed to conduct audit with special cases and is broadly concerned by the public, since the BPK has a strong power which is explicit mentioned in the constitution.
On the other hand, the BPK are not rarely included in turbulent political issues, for instance, should the BPK conduct special audit on the KPK, or special audit on KPU’s general election expenditure. Moreover, the BPK have started to conduct investigative audit on Bank Century’s bailout that the government have been injected money about 6,7 trillion rupiah. Furthermore, inevitably the BPK will perform audits on the gold and other mining companies that are related to the bigger value of state income. The BPK’s strategic planning as stated by the previous members is ultimately giving the best direction to the government on decision making, should be continued by the new members since it is an “unaccomplished mission”. The BPK should also boost transparency and accountability of all government institutions, started by the BPK efforts to upload its audit reports on the official website.
The choosing process of the new BPK members should avoid getting bad members. Also, the parliament members should consider the proportion of the new BPK members from inside and outside institution to assure continuation of its strategic planning and bureaucratic reform. As stakeholders of this country we hope the house of representatives members will struggle for our aspirations to get seven good, capable and honest BPK members. The parliament members should avoid the failure they have taken by choosing bad figure as the head of the “anti-corruption superbody”. Only God can answer it.

*Nico Andrianto
Rechearcer on The Economic Reform Institute
Australian Development Scholarship Awardees