Jakarta receives ‘squeaky clean’ financial report

The Supreme Audit Agency (BPK) has given its best mark to the Jakarta administration’s 2011 financial report, saying that the financial report was all clear, the first time ever for the administration.

BPK Jakarta office head Blucer W. Rajagukguk said that the agency found the administration had finally made improvements in its financial reporting after years of being given a “qualified” opinion.

BPK audits mark evaluations ranging from disclaimers — the lowest ranking — to adverse, qualified opinions and unqualified opinions — the highest ranking. The auditor gives a “qualified” opinion should they find irregularities in the report and an “unqualified” opinion if there are no significant reservations about the financial report.

“This achievement should serve for better accountability and transparency in the financial management of the city,” Blucer said during a speech at the City Council on Wednesday.

Last year, the agency issued a “qualified” opinion in its audit of the city’s finances in 2010, citing difficulties in completing its analysis of the financial report.

BPK said last year that the lack of records and incomplete data, especially on asset inventory, submitted to the agency made it impossible for the agency to make a proper audit of the city’s finances.

Blucer said that improved asset inventory was the main reason the city received its best mark.

Last year, the Jakarta administration launched a special program to investigate Rp 4 trillion (US$424 million) worth of unaccounted assets from property developers across the city.

According to an inventory audit in 2007, the city owned a total of Rp 8.76 trillion in property from property developers; yet this figure had later grown to Rp 17.4 trillion from a total of 447 properties during an audit in 2010. However, the city only had proof of 355 ownership titles for the 447 properties, with the remaining 92 properties unaccounted.

The administration has assets worth Rp 407.1 trillion in total, according to an audit dated Dec. 31, 2010.

Blucer, however, underlined that the audit opinion did not translate to a clean administration.

“Unqualified opinion does not mean that the administration is free of corruption. It’s not the only parameter for clean governance.”

Jakarta has received a qualified rating since 2009, an improvement from 2008, when the BPK issued a disclaimer after discovering 169 irregularities worth more than Rp 5.6 trillion.

Governor Fauzi Bowo said that he was delighted with the audit agency’s rating.

“It is a result of collective hard work from administration staff and also a result of good cooperation with the City Council,” Fauzi said.

The governor said that the administration had been making progress since its “disclaimer” days in 2007, the first year of his tenure. Fauzi, who is seeking reelection this year, said that he would keep up the good work.

“The unqualified opinion is big challenge for us. It will not be easy to retain it in the future.”

Earlier this year, Fauzi acknowledged that his administration had less-than-optimal monitoring in the budget planning, scheduling and implementation phases, leading to a staggering Rp 6.47 trillion (US$705.23 million) surplus from the 2011 budget.

Jakarta recorded a Rp 4.9 trillion surplus for its Rp 26.7 trillion budget in 2010, a Rp 3.7 trillion surplus for the Rp 23.96 trillion budget in 2009, and a Rp 4.44 trillion surplus for the Rp 20.59 trillion budget in 2008.

This year, the administration allocated Rp 36.02 trillion for its budget, a 13.43 percent increase from 2011, with expectations of more than Rp 40 trillion in the 2012 after it is revised mid-year.