PRESS RELEASE

Jakarta, Friday (October 5, 2018) – The unqualified opinion achieved by regional governments continued to increase. It was well noted that there were only 3 regional governments achieving unqualified opinion (0.65%) in 2006. In 2017, the number increased up to 411 regional governments (76%). This was also stated by the Chairman of BPK, Moermahadi Soerja Djanegara when handing the Summary of Audit Reports of the First Semester of 2018 (IHPS I 2018) to the House of Regional Representatives (DPD) today.

The quality improvement of financial statements in 2017 is an effort of regional governments to refine weaknesses found in 2016. Efforts made include updating fixed asset data, inventorying land, buildings, as well as depositing and recovering the value of liability for goods and services expenses to regional treasury.

During the first semester of 2018, BPK audited 542 (100%) financial statements of regional governments in 2017. Among those audited regional governments, there were 411 entities obtaining unqualified opinion, 113 gaining qualified opinion, and 18 entitled to disclaimer. If viewed based on the provincial level, among 34 provinces throughout Indonesia, there were 33 provinces (97%) gaining unqualified opinion for their financial statements while there was only one province with qualified opinion (3%). Furthermore, if based upon the number of districts, of all 415 districts in Indonesia, there were 298 districts receiving unqualified opinion (72%) and 99 districts with qualified opinion (24%), whereas there were 80 out of 93 city governments in Indonesia receiving unqualified opinion (86%) and 13 cities with qualified opinion (14%).

Since 2005 to Juni 30, 2018 BPK provided 510,514 recommendations to make the government, State/Regional-Owned Enterprises and other bodies more compliant, accountable, efficient and effective. Of all these recommendations, there were 369,356 recommendations (72%) have been followed up accordingly, of which there were as many as 306,691 recommendations (83%) have been followed up by the regional governments.

Cumulatively, up to June 30, 2018, BPK's recommendations have been followed up with the transfer of assets and /or deposits to the state/regional/enterprises’ treasuries amounting to Rp 79.98 trillion. Of that amount, there were Rp 17.81 trillion that were the deposits of money of the handover of assets from regional governments.

Regarding the audit on financial statements of regional governments, the IHPS I 2018 stated that BPK found problems affecting financial matters comprising of 2,903 problems of non-compliance resulting in the state loss of Rp1.54 trillion, 426 problems with potential loss worth Rp 317.87 billion, and 868 problems of lack of revenues worth Rp 686.49 billion. In addition, there were 2,361 problems of administrative irregularities. During the audit process, the regional governments have followed up the findings with transfers of assets and deposits into the state/regional treasuries that amounted up to Rp 476.65 billion.

The above mentioned problems of non-compliance included a shortage of works/goods volumes worth Rp 547.96 billion that occurred in 475 regional governments. There were also spendings incompatible with or exceeding the provisions happened in 395 regional governments valued Rp 344.45 billion, overpayment in addition to a shortage of volumes in 262 regional governments valued Rp 148.04 billion, doubled official travel costs or not in accordance with the provisions of Rp 87.45 billion in 232 regional governments, as well as the use of money/goods for personal gain worth Rp 20.72 billion occurred in 54 regional governments.

BPK hopes that the information as revealed in the IHPS I 2018 and BPK’s Audit Reports published during the first semester of 2018 can support the DPD in conducting its duties and authorities in accordance with rules and regulations.

Public Relations and International Cooperation Bureau