Survey Results and Comments on Support from Authorised Investigators

7.3.2 Survey Results and Comments on Support from Authorised Investigators

The survey results indicate various opinion from auditors and auditees on the support of authorised investigators for BPK reports that indicated corruption and fraud. Figure 7.6 (below) shows that the majority of respondents were ‗neutral‘. Moreover, similar perceptions were presented by both auditors and auditees, only a few responded ‗strongly agree‘ and ‗strongly disagree‘ and similar percentages responded ‗agree‘

(auditors 23 per cent and auditees 22 per cent). The results imply that the support from authorised investigators remained low.

Figure 7.6 Survey Results of ‘Authorised Investigators Support the Audit Findings of BPK Indicating Corruption and F raud’

s en tage rc Pe

Strongly Agree

Strongly disagree

Pe rce ptions

Auditors

Auditees

Overall responses

112 The Government of the Republic of Indonesia uses two currencies for payment. Payment in the country uses Indonesian Rupiah (IDR), while for public goods and services to and from abroad, use US Dollar payment.

Source: Fieldwork survey from 5 th November 2006 to 25 th March 2007

Auditors and Members of Parliament expressed their opinions on the importance of support to BPK reports from authorised investigators as follows:

 “Follow-up of fraud indications is really dependent on the Police and Attorney General and KPK ” (Interview B23, an auditor of AKN V).  “Audit reports from BPK are not final reports. If there are findings that indicate

fraud or corruption, these reports need to be followed up by Police or the Attorney General or KPK for a further investigation ” (Interview C6, a Member of Parliament from Commission IX of PAN faction).

 “Ineffectiveness of government auditing is because of the low commitment of law

enforcers to follow up this audit result. The institutions of law enforcers themselves have to be improved Commission II of PKS faction). 113

” (Interview C12, a Member of Parliament from

These excerpts indicate that auditors have no authority to take action or follow up for auditees who have criminal indications based on audit findings. The sanction from auditors is substantially limited to shaming auditees through the publication of their audit reports.

A Member of Parliament from Commission V stated (Suara Pembaharuan

16 th May 2006) as follows:

Law enforcers, such as the Police and the Attorney General should use BPK audit findings as preliminary evidence to solve some irregularities in SOEs and government entities, by requesting BPK to do an audit investigation.

Although this statement indicates that BPK reports are important for the Police and the Attorney General as evidence for further investigation,law enforcers and investigators did not take BPK findings seriously.

Some negative responses were also recorded in the survey results. Of the total respondents, 60 per cent were ‗neutral‘, 13 per cent ‗disagreed‘ and 1 per cent ‗strongly

113 This is based on an interview on 14 th November 2006, at Parliament House (Wisma Nusantara I), Jakarta 113 This is based on an interview on 14 th November 2006, at Parliament House (Wisma Nusantara I), Jakarta

 “Police, the Attorney General and KPK have not followed up audit reports optimally ”(auditors).  “Many audit findings or audit reports had not been followed up by the Police and the Attorney General ”(Members of Parliament).

These excerpts imply that the Attorney General and the Police were not concerned with following up BPK‘s audit findings. Two Members of Parliament from the National

Mandate Party (PAN) faction made the following criticisms (Rakyat Merdeka 18 th May 2006):

BPK‘s audit reports found state losses to a value of Rp.40 trillion, but only Rp.10 billion was returned to state revenues. This indicates that no serious efforts to eradicate corruption were made.

And on the lack of followup by law enforcers:

Law enforcers were not objective in their work. Police caught many suspected people that were under investigation. But strangely, people engaged in criminal activities which clearly caused trillions of state losses were still free and still could

be negotiated with, for instance, fraud of BLBI which lost trillions of state funds but were still free and untouchable. It is obviously not fair.

These statements identify a lack of effort from law enforcers in following up on audit findings. One of the Members of Parliament indicated that money returned from those state losses was only 0.025 per cent of the total value and criticised the lack of law enforcement for auditees who perpetrated fraud on state finances.

An auditee who pointed out the misuse of BPK audit findings by investigators commented as follows:

I strongly agree if there is any suspicions of fraud, audit findings have to be followed up for further investigation by the Police, Attorney General or BPK. However, in I strongly agree if there is any suspicions of fraud, audit findings have to be followed up for further investigation by the Police, Attorney General or BPK. However, in

Supported this view is a statement made by a researcher from Parliament, who said, ‗In some cases, evidence from BPK‘s audit findings has been used by law enforcers as a tool

to pressure the corrupted audited entities 114 ‖ .

In addition, a Member of Parliament from Commission IX criticised the lack of coordination between BPK and law enforcers and was cited in a national newspaper (Rakyat Merdeka18 May 2006), as follows:

Lack of coordination between BPK and law enforces has resulted on making no sense of cases. For example, BPK had not yet reported its findings, but the Police had considered irregularities. On the contrary, BPK reported fraud that should be followed up, but the Police did not do.

In a keynote address in 2007, the head of Parliament 115 concurred with the above view as follows:

For audit findings that indicate corruption, BPK reported and submitted to KPK, the Attorney General and Police. Therefore, the role of BPK in eradicating corruption is significant. Nevertheless, its role is limited to auditing and then stops. After that, the BPK findings will depend on the commitment of law enforcers to follow up the findings.

This statement implied a lack of coordination between BPK and law enforcers. They work separately and independently. Although BPK had provided audit reports, law enforcers did not use the reports aspreliminary data for further investigations.

To summarise, the survey results and data in this study indicate a lack of support from authorised investigators for audit findings that have indications of corruption and

114 This is based on interview with a researcher at Secretariat General of Parliament during fieldwork on 4 th January 2007.

115 Keynote Speech of the Spokesperson of Parliament, H.R. Agung Laksono, at the One Day Seminar of Public Sector Auditing, on 9 th January 2007, Jakarta Convention Centre, Jakarta.

fraud. To improve investigator follow-up of such audit findings, four mechanisms were introduced.These are: (1) a joint agreement between BPK and KPK to prevent and eliminate corruption, (2) a joint agreement between BPK and PPATK, related to data for preventing and eradicating corruption, (3) strengthened coordination between the Attorney General and police of the Republic of Indonesia, and (iv) a joint agreement between BPK and the Attorney General to support more effective law enforcement. Since the implementation of these mechanisms, there have been significant changes in support by authorised investigators for BPK audit findings indicating criminal activities.