The regional autonomy law, which disburses trillions of rupiah from the state budget to regions, has encouraged many local officials, councilors and businesspeople to conspire to create fictitious projects and procurements to embezzle state money.

A survey conducted over the past year by Transparency International Indonesia (TII) on 10 cities and regencies across the archipelago has found that corruption in procurement projects and regional budget arrangements remains prevalent in most regions.

The survey, released Wednesday in a 194-page report, examined corruption practices in Palangkaraya in Central Kalimantan; Wonosobo in Central Java; Pare Pare in South Sulawesi; Tanah Datar in West Sumatra; Yogyakarta; Cilegon in Banten; Denpasar in Bali; Gorontalo; Mataram in West Nusa Tenggara; and Maumere in East Nusa Tenggara.

The first five regions are listed as having the cleanest cities and regencies by TII’s 2006 corruption perception index, while the last five are the worst.

Most graft cases in those regions stemmed from the nepotistic behavior of local officials, councilors and businesspeople, the survey found.

In an attempt to reap money from regional budgets, councilors would take on the roles of brokers or contractors in fictitious projects, and then employ family members in the schemes.

The felonious councilors, regents or mayors would then establish budgets for their administrations, it added.

“So, councilors and local administration executives create the region’s budget based on the projects rather than on the needs of local people,” TII researcher Frenky Simanjuntak told a press conference.

The survey shows that in Gorontalo and Mataram, councilors have never scrutinized proposals by the region’s development planning agency when setting the budget for the region.

In Tanah Datar, officials also tried to divide a huge project into smaller ones, each valued at less than Rp 50 million, in order that a constructor could be directly appointed without the need for an open tender.

A direct appointment would make it easier for the regional officials to select contractors based on a highest bribe basis.

Presidential Decree No. 80/2003 rules that a project worth more than Rp 50 million must be conducted through an open tender.

Even in projects valued at more than Rp 50 million, local officials and businesspeople have been known to collaborate in deciding the winner.

The contractors would have to pay a certain amount of money — known as uang cendol — to secure the tender.

Some Rp 300 trillion of the Rp 1,000 trillion 2008 state budget has been channeled directly to regions. On top of the amount, each ministry will dedicate projects worth trillions of rupiah to regions.

TII said that unless transparency, accountability and control were boosted and local values — such as honesty and the desire to work hard and cooperate for the good of the community — were embraced, state money would continue to leak into the hands of corrupt officials.

According to a 2007 audit by the Supreme Audit Agency, Cilegon was unable to explain around 20 percent of its expenditure for the year.

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