BPKP finds indications of state funds misuse

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Wed, 03/19/2008 12:20 AM  |  Business

The State Development Finance Comptroller (BPKP) said Tuesday it had found indications of misappropriation involving the special allocation fund (DAK) of several local administrations.

The DAK is a fund the central government sets aside for regions annually.

"(Last year) we found three regencies and one municipality had created fictional projects worth Rp 1.61 billion (US$175,454), or 45.8 percent of the contracts' value," BPKP head Didi Widayadi said at a press conference.

The regencies were Sarmi in Papua (Rp 1.11 billion), South Halmahera in North Maluku (Rp 398.6 million) and Bireun in Aceh, Rp 14.6 million, and the municipality was Palu in Central Sulawesi (Rp 90.95 million).

The BPKP based its findings on its regular survey, conducted in 133 regencies and municipalities that received a combined DAK of Rp 5.63 trillion last year.

The BPKP also found 85 regencies and municipalities had not been able to finish their projects by the end of 2007, and said there was a Rp 95.49 billion difference between the project costs and the disbursed funds.

The Finance Ministry said last year regions should be able to finish their projects by the end of 2007 if they wanted the funds allocated for the following year disbursed.

The ministry last year allocated Rp 17.1 trillion of DAK to support 434 regencies and municipalities, particularly in infrastructure development. It disbursed Rp 16.2 trillion, or 94.8 percent of the allocated funds.

"It has happened all these years. We cannot let it keep happening," Didi said.

"It is not fair for other administrations which could be in need of such funds."

Finance Minister Sri Mulyani Indrawati said her ministry would report the findings to the State Audit Agency (BPK) for follow-up.

Didi suggested the regions return "the suspicious money" before the BPK, the prosecutor's offices and the police conducted investigations.

Sri Mulyani said the government was considering placing sanctions on the regions.

"The most available mechanism would be by postponing the fund disbursement.

"If there are regions that keep misappropriating the funds, we will not disburse the funds to them again," Sri Mulyani said.

This year, the government in its 2008 state budget allocated Rp 21.2 trillion for the DAK.

Most of the money is expected to be spent on infrastructure development, health and education.

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