A bank teller counts rupiah notes in Jakarta on April 30. (Beritasatu Photo/Mohammad Defrizal)

State Faces $432 Million in Losses From Legal Violations: Supreme Audit Agency


MAY 05, 2020

Jakarta. Indonesia's Supreme Audit Agency, or BPK, delivered its second-semester audit results (IHPS) and investigative report (LHP) from last year to the House of Representatives on Tuesday, revealing thousands of financial irregularities that may lead to potential losses for the state.

The IHPS is a summary of 71 audit reports from the central government, 397 from regional governments, city-owned enterprises and regional public service agencies, and 20 from state-owned enterprises and other agencies.

"During the second half of 2019, we found a total of 5,480 financial irregularities, 971 related to internal control system, 1,725 related to legal violations [which may cost the state] Rp 6.25 trillion [$432 million] and 2,784 related to inefficiency and ineffectiveness which may cause Rp 1.35 trillion in state losses," BPK Chairman Agung Firman Sampurna said in a plenary meeting with the House of Representatives.

Agung said 74 percent out of the 1,725 legal violations may potentially cause financial losses to the state or reduce state revenues.

He said 709 violations could cause financial losses of up to Rp 1.29 trillion, 263 violations Rp 1.87 trillion in potential losses and 298 violations Rp 3.6 trillion in reductions in state revenues.

"The audited entities have responded to our report by relinquishing their assets and returning the money to the state. So far, we've already received back Rp 449.45 billion or 7 percent of the total losses," Agung said.

Performance Audits

Agung said an audit on regional expenditure management for human development had also been done on six provincial governments, 45 district governments and nine city governments.

The BPK found several issues that could disturb the effectiveness of the regional expenditure management and that need to be resolved immediately.

The BPK has also audited the Education and Culture Ministry, nine provincial governments, 31 district governments and eight city governments on learning quality improvement and the implementation of the 2013 education curriculum.

"Our audit showed that the ministry had not implemented learning quality improvement programs effectively. Meanwhile, the programs had been quite effective in four regional governments, less effective in 25 regional governments and not effective in 19 regional governments," Agung said.

The Health Ministry, National Health Insurance (BPJS) and 64 regional governments have also been audited for the financial management of basic health services.

"According to the report, the Health Ministry has not effectively managed its special allocation fund (DAK), medical supplies for doctors or medical workers. Meanwhile, the BPJS has been quite effective in managing its funding," Agung said.

In the meantime, 43 regional governments have effectively managed their health funding, 20 regional governments have been less effective and one regional government has not been effective at all.

In the past 15 years, the BPK had given 560,521 recommendations to help regional governments, state-owned enterprises, city-owned enterprises and agencies work more efficiently and effectively.

A total of 416,680 recommendations (74.3 percent) had received positive responses.

"As of 2019, the audited entities had returned a total of Rp 106.13 trillion to the state, regional governments and state-owned enterprises," he said.