opinions are rarely expressed as consequences and impact on society and causes are rarely investigated. Auditors tend to focus on internal control weaknesses and report
on assets but forget, for example, food supply risks because state-owned farmland might be lost.
bpk
should provide more historical analyses of findings, recommendations and solutions. According to staff, this information was recently
included in
bpk
’s half-year report.
1.7.2 Impact audits
Under the law, public entities must follow-up
bpk
’s recommendations within 60 days and report on the follow-up. What follow-up means has not been defined: an action
plan or full implementation of the necessary corrective measures?
bpk
takes account of the time auditees need to implement measures. If measures need more time
bpk
states that the recommendation has been followed-up but not finished and explains why not.
The follow-up is scored in three categories: not followed-up, followed-up, followed-up but not finished.
The follow-up to recommendations could be monitored more effectively.
bpk
should pay more attention to the impact of its recommendations, not only to compliance with
recommendations. This would also make it possible to learn from the effectiveness of recommendations.
According to staff, the results of audit findings are presented in dpr by the Chairman of
bpk
or in local parliaments by the Head of Regional Office. Parliament dpr generally has only a limited interest in
bpk
’s reports according to staff . Regional parliaments, also, show little interest in them because they are too
technical and there are no sanctions for local governments: they can continue business as usual despite
bpk
’s findingsopinion. To enhance the impact of its reports,
bpk
should permanently seek new ways to inform parliaments and the general public about its audits and role.
bpk
recently organised a two-month tv series to provide an explanation of several of its audit reports.
1.7.3 Overly strict separation of audit types
bpk
strongly believes that anything other than financial statements belongs to performance or special purpose audits. This narrow view prevents auditors
commenting on the causes and impact on society of their financial audit findings.
1.7.4 Quality controls
Echelon I and all central and regional audit offices hold a coordination meeting in Jakarta twice a year. During the meeting, manuals and guidelines are explained and a
work plan is discussed for the next period. A helpdesk and reporting team have been installed for each Auditorate. Principal
auditors permanently monitor and review their audit teams. Furthermore, internal review teams have been appointed at several regional and central
audit offices to perform hot reviews of audit reports.
1.7.5 Quality Assurance
The combination of internal auditinspection tasks with quality assurance tasks in itama
does not improve the quality assurance environment. The combination of what is seen as punishing and learning at the same time should be discouraged. itama does
not consider the strategic and technical quality of audit reports, only compliance with procedures. This approach does not have any learning benefit for
bpk
. We recommend that an implementation plan be drawn up to define itama’s role in
relation to: • Evaluation unit epp;
• internal review teams; • hot review teams in the audit units.
bpk
recently took the first steps to prepare project charters to clarify each function’s use as a quality assurance instrument.
itama should be able to use the findings errors of those other units’ summarising
verifying activities. Only itama reports relevant findings and lessons to the management of
bpk
. Quality assurance should look for best practices what went wrong and what went right? and suggest improvements to the team involved or management on such
aspects as training, manuals and line control. Step by step
bpk
must develop a strategy based on added value: What should it learn first and what later? For learning purposes,
a deep review could first be carried out of, for instance, methodology, followed up later by recommendations and conclusions. Furthermore, very experienced auditors with a
certain authority and teaching skills should be placed in itama, so that it becomes an honour to work for it. itama’s current staff should be clearly informed about their
role, tasks and required performance as soon as possible, enjoy the support of
bpk
’s senior management and have sufficient budget to do the job. According to the Board,
bpk
recently started to recruit experienced auditors for itama. Two units evaluate audit reports cold reviews. Both suffer from lack of adequate
capacity and poor communication. In semester ii of 2007, the 33-man staff of the Evaluation unit epp evaluated 821 final reports lhp containing 7,052 findings.
They found that 3.4 of the 821 final reports did not comply with
bpk
’s internal criteria. The findings should improve accuracy and the logical relation between
findings and recommendations, prevent misinterpretation and increase compliance with auditing standards spkn. epp produces half-yearly compilations of extracts
from reports submitted to parliament. Files are not reviewed. However, the Principal Inspectorate supervises administrative support, discipline and audit activities at
Auditorates at Headquarter and regional offices. It also performs quality assurance by reviewing the technical quality of a small selection of audits using audit files. These
reviews are designed to increase internal learning. As
bpk
’s new qa manual has almost been adopted this is the right moment to streamline qa activities in a single unit. This
will enhance the production and quality of qa activities, which is necessary in view of the extra workload coming from regional offices. Furthermore, we recommend that
the aforementioned inspection of administrative matters be separated from audit qa activities because they do not improve the qa environment. We noticed that auditors
are barely interested in a qa inspection function owing to its negative image.
1.8 External stakeholder relations
