Disharmony in govt budget halts key projects

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Fri, 04/18/2008 12:43 AM  |  Headlines

Disharmony between the central and local administrations in managing their budgets has halted the progress of several health, education and infrastructure projects in the regions, the Supreme Audit Agency (BPK) says.

"The state budget and regional budgets were not synchronized with each other, which caused the projects not to run smoothly," BPK chairman Anwar Nasution said Thursday after meeting with the Regional Representatives Council (DPD).

According to Anwar, many bridges and roads in the regions did not meet standards because they were built using less funds than had been intended, making them unsafe for people.

He said some regions also marked up project prices, which inflicted state losses.

On education and health, the BPK said many procured items were not used as initially designated, causing programs in both sectors to fail.

Should these things continue, the government will have a difficult time improving public services to improve people's living standards nationwide, said the BPK.

Every year, the central government distributes so-called general allocation funds (DAU) and special allocation funds (DAK) to support regions in developing infrastructure projects.

The government has promised that this year it will strive to develop infrastructure projects nationwide to support the country's economy.

In its 2008 revised budget, the government allocates Rp 179.5 trillion (US$19.54 billion) in DAU and Rp 19.08 trillion in DAK.

The BPK said the central government should improve its monitoring mechanisms to make sure regions spend the funds properly.

It also reported that judging from 97 financial reports were submitted by local administrations in the second semester of 2007, the administrations might have misappropriated Rp 23.35 trillion in funds.

The report was based on its audit of three government bodies, 97 local administration bodies, five state-owned enterprises and three regional enterprises.

The audit agency said about 27.8 percent of administrators of 349 regencies and 91 autonomy municipalities nationwide had not professionally managed their financial reports.

"Six regions have not submitted their 2006 financial reports," said Anwar, adding that those were located in Nanggroe Aceh Darussalam, North Maluku, Papua and West Papua.

Responding to the BPK's audit, DPD chairman Ginandjar Kartasasmita said he would order the regions' representatives to urge the regional administrations to submit their financial reports immediately.

"If there is nothing to hide, there is nothing to worry about," said Ginandjar, adding that the regions' representatives should scrutinize the financial reports.

Under existing regulations, regions that are found to have misappropriated the allocated funds can be reported by the House of Representatives to the Attorney General's Office or the National Police for further investigation.

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