AUDITING laporan hcs english 8 mei 2013

A S S E S S M E N T O F H O S T C O U N T R Y F I N A N C I A L S Y S T E M I N M A N A G I N G F O R E I G N G R A N T 43 The Inspectorate General of MMAF Inspectorate General does not conduct audits speciically with regard to grants, either directly or indirectly. Nevertheless, it does review the Ministry’s inancial reports internally prior to auditing by an external auditor the Supreme Audit Agency - BPK. This review does not assess the recording of grants or the most recent Government Accounting System SAI. In addition to reviews of inancial and performance audit reports, the Inspectorate General also conducts other activities, namely: speciic-purpose audits, monitoring of post-audit follow-up actions, strengthening inancial and state asset management, strengthening internal control systems, evaluating partners’ program planning activities, evaluating government agency partners’ performance reports, monitoring and evaluating marine affairs and isheries programs, handling public complaints, providing mentoring for marine and isheries development programs, implementing continuous control over the procurement of goodsservice, and providing technical guidance in the performance of supervisory activities. The Inspectorate General has 217 staff with a variety of educational qualiications, including: one Ph.D.; 53 Master degrees; 109 Bachelor degrees; 14 staff with Diploma-4 qualiications; 17 staff Diploma-3 qualiications; and 23 with either high school or elementary school certiicates. Out of the total number of staff 217, 97 are auditors spread across ive inspectorates. Of this, there are two senior auditors daltu, 21 middle-level auditors dalnis, 21 junior auditors team leaders, and 52 prospective auditorssupervisors team members. From the information gathered on educational levels in the Inspectorate General, it has been concluded that they are adequate. The current number of work units Satker in the MMAF is 743, with 56 at the ministry level Satker Pusat, 127 at the local government level Satker Daerah, 198 Deconcentration work units Satker Dekonsentrasi, and 362 Assignment Task work units Satker Tugas Pembantuan. With a strategic target of 100 oversight coverage and 21 auditing teams that can be formed from available Inspectorate General staff, each team conducts audits at more than 35 Satkers per year with auditing period of ive to seven days each. This auditing period is quite short given the targeted coverage. Recommendations upon the results of oversight are aimed at improving performance and control systems, with the target of 70 realized at 48 69 of the target. In addition, follow- up actions on inancial indings exceeded its goal, with the target of 70 realized at 89 127

CHAPTER VI AUDITING

A S S E S S M E N T O F H O S T C O U N T R Y F I N A N C I A L S Y S T E M I N M A N A G I N G F O R E I G N G R A N T 44 The Inspectorate General does not speciically conduct audits on grants, however it does conduct performance audits with regard to Satkers and performs reviews of the MMAF’s inancial reports. In the reviewing of inancial reports, including records on grants, it has been recommended that the capacity of Inspectorate General staff requires improvement in regards to understanding the recordingaccounting and reporting systems relating to the most recent grants, for both planned and direct grants. CONCLUSIONS The Inspectorate General of MMAF reviews the ministry’s draft inancial reports before they are inalized. However, with regard to grants, these reviews are considered to be ineffective due to a lack of capacity amongst Inspectorate General staff in understanding new regulations relating to both direct and planned grants. The Inspectorate General does not speciically conduct audits on grants. In addition, auditing techniques and procedures for activities funded by grants are not speciically developed, along with the requisite human resources capacity. A S S E S S M E N T O F H O S T C O U N T R Y F I N A N C I A L S Y S T E M I N M A N A G I N G F O R E I G N G R A N T 45 The framework for the receipt of foreign grants as discussed below relates to grants made to local governments and Non-Government Organizations NGO. Such grants are to inance activities and are in cash only. Grants can be provided directly through the Ministry of Marine Affairs and Fisheries MMAF or a Trustee Institution LWA established by the MMAF. The receipt of foreign grants by NGOs through a Trustee Institution takes place under the direct grant mechanism. There are four methods as presented below, namely: 1. The Receipt of foreign grants by local governments through the MMAF 2. The receipt of foreign grants by local governments through a Trust Fund 3. The receipt of foreign grants by NGOs through the MMAF under the Direct Grant Mechanism 4. The receipt of foreign grants by NGOs through a Trust Fund under the Direct Grant Mechanism.

CHAPTER VII DESIGNS OF THE RECEIPT OF FOREIGN