Professionalism and Integrity of BPK Post Audit Reform

6.2.3 Professionalism and Integrity of BPK Post Audit Reform

As mandated by Article 9 of the Law on BPK (2006), auditors are required to develop competence for their functional position through continual professional education to enhance their audit skills. Since audit reform, BPK has increased trainings, education, workshops, seminars and other programs, both inside and outside of Indonesia, to develop the professionalism and competence of its personnel. A BPK trainer (Interview B28) explained that every BPK auditor must complete at least 20 hours of a total 80 hours

education and training package within a one to two year period 86 . This professional education includes audit topics such as: knowledge of audit standards, general knowledge

of the auditee environment, skills to communicate effectively both verbally and in writing, statistics, finance and accounting, management, information systems, state administration, government structure and policies, industrial techniques, economic science, social science and information technology (BPK RI 2007g: 22-23).

After reform, BPK also developed two functional positions for auditors, namely, skilled auditors and expert auditors. The development of these positions is relevant to the needs of auditors for undertaken performance audits in the future. For financial and compliance auditing, BPK requires accountants, while for performance audits, it requires other disciplines such as civil engineering, public policy, economics, management and the environmental management and engineering.

To provide good quality auditors and maintain their integrity and professionalism, BPK increased its budget to provide better compensation for its personnel (staff, managers,

86 This means all professional auditors of BPK shall carry out a total of 80 hours of training and education. This

Members and auditors). Moreover, if an audit requires a very specific audit method, the audit team may involve experts (BPK RI 2007g: 24). The Chairman of BPK) 87 underlined four reasons for increasing auditor income and incentives, namely: (1) there are high risks for auditors in uncovering corruption, fraud and other criminal findings, (2) the remuneration for auditors must be balanced with the value contribution they make to state income/state cash revenue through the audit findings, (3) the income of auditors is obviously relevant to the new recruitment of qualified auditors and their participation in training, education, workshops, seminars and other professional development activities, and (4) the professional performance of auditors is obviously relevant to the quality of audit results and recommendations for restructuring the public sector entities for the wider public interest.

Table 6.1 (below) illustrates improvements made regarding the salaries and allowances of BPK personnel since the implementation of audit reform and the remuneration system on 2006. The remuneration system is linking performance with payment to motivate personnel to perform better. The data indicates a significant increase in the total income of BPK managers and staff compared with other public servants or apparatus in government institutions. For instance, the audit fee for BPK auditors was formerly only Rp.50,000 per day, which meant inadequate travel expenses and shortages in essential supplies like fuel. Since 2006, the audit fee has increased to Rp.200, 000 per day, four times higher than before.

87 Speaking at the ceremony to celebrate the 60 th anniversary of BPK on 8 th January 2007.

Table 6-1Remuneration Income of BPK Managers and Staff in 2004 and 2006(in Rupiah) Personnel Groups

Income in 2004

Income in 2006

Level of Manager Echelon IA

Echelon IB

Echelon IIA

Echelon IIIA