Where dirty money goes

The Jakarta Post ,  Jakarta   |  Tue, 08/28/2007 1:44 PM  |  Opinion

The current polemic between the Attorney General's Office, the Finance Ministry and the Supreme Audit Agency (BPK) over the accountability of compensation funds paid by corruption convicts validates the public's suspicions about the utterly poor management of our state finances and assets, despite the numerous reform measures already taken.

The controversy also shows how internal controls, supposed to be the first line of defense against corruption, are still inadequate within most government offices.

The polemic was triggered by Hendarman Supandji just days after his appointment as the new attorney general early in May, apparently on the back of the achievements he made in his capacity as chairman of the Coordinating Team for Corruption Eradication.

Hendarman said that during its two years of operation the team, which worked under the AGO, recovered almost 4 trillion (US$43 million) in state assets through the collection of fines imposed by courts on corruption convicts.

However, a few days later, Dradjad Wibowo, a member of the House of Representatives' Financial Commission, refuted Hendarman's claim, saying that after checking the government's balance sheet, as prepared by the Finance Ministry, he found no mention of Rp 4 trillion in receipts from the AGO.

Realizing his mistake, Hendarman immediately clarified his remarks, saying that of the almost Rp 4 trillion collected from corruption convicts only Rp 18 billion (0.04 percent) had been transferred to the state treasury.

The controversy further heated up after the Supreme Audit Agency, which is in charge of auditing government financial reports, joined the fray.

Baharuddin Aritonang, a senior executive at the BPK, said audit reports on the government financial statement for 2005 found Rp 6.9 trillion in fines collected from corruption convicts recorded in the accounts of the AGO and its offices across the country, but as of last year only around Rp 3 trillion had been transferred to the state treasury.

Junior Attorney General for Special Crimes Kemas Yahya Rahman issued another clarification on Aug. 13, saying that cumulatively the AGO recorded Rp 10.70 trillion and $5,500 in money collected from corruption convicts, but only Rp 2.56 trillion had been handed over to the state treasury.

With the controversy ongoing and the Supreme Audit Agency yet to conduct an investigative audit of the flow of compensation funds from corruption convicts, it is really almost impossible to ascertain which of the figures, as claimed by AGO, the Finance Ministry and the BPK, is really correct.

But one thing is quite evident; the large discrepancies in the figures, as reported by the three state institutions, reflect the messiness of state financial accountability. Tracing money from corruption convicts should not be that difficult a process, because the amounts are announced simultaneously with the sentencing of the defendants.

The big question, though, is whether the AGO has really been serious about enforcing the court's decisions and collecting the fines, and then transferring the money to the state treasury, as required by the State Finances Law.

Given the discrepancies in the figures reported by the three institutions -- even the information issued by AGO officials often contradicts itself -- we cannot help but suspect that internal audits within the AGO have been quite lax and the State Finance Controller, the institution in charge of developing effective internal audit mechanisms within government offices, seems to have failed to accomplish its task at the AGO.

We get the impression that inadequate internal controls have bred corruption and allowed collusion between AGO officials and corruption convicts. Many convicted corruptors seem to have been able to make AGO officials simply ""forget"" to collect the fines. Others seem able to claim personal bankruptcy, thereby freeing them from the obligation of having to pay the fines.

Investigative reporting by Kompas daily showed how several big corruption convicts, who remain rich even by international standards, had not paid the compensation imposed on them by the courts even after they got out of jail.

The government should put an end to the fruitless polemic and order the Supreme Audit Agency to conduct a forensic audit on the management of compensation funds due from corruption convicts, otherwise the assets will continue to be poached by corrupt officials.

A  |   A  |   A  |    |   |    |    |    |  

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.