PRESS RELEASE

Jakarta, Tuesday (December 5, 2023) – The Audit Board of the Republic of Indonesia (BPK) appreciated the efforts and hard work of regional governments for completing their financial statements on time. Over the last five years, from 2018 to 2022, the overall opinion on Financial Statements of Regional Government (LKPD) has improved.

"Efforts that have been made by the regional government include identifying, verifying, validating proof of expenditure, as well as making necessary corrections and depositing cash into the regional treasury for expenditures that have not been approved by the Regional Budget Office (BUD) and have not been recorded in the audit reports. The regional government also conducted an inventory of fixed assets whose whereabouts are unknown, controlled by other parties, and recorded jointly, as well as recovering excess payments for capital expenditure on roads, irrigation, and networks as well as buildings and structures, by depositing them into the regional treasury," explained the Vice Chair of BPK, Hendra Susanto, when handing the Summary of Audit Results for the First Semester of 2023 (IHPS I 2023) to the Speaker of Regional House of Representatives in Jakarta today (5/12).

BPK gave 496 Unqualified Opinions of the audited 542 LKPD fiscal year 2022 , accounting for 91% of the total number of regional governments. However, there were 41 regional governments obtained Qualified Opinion and 5 regional governments obtained Adverse Opinion. The overall audit opinion on LKPD has improved in the recent five years, from 2018 to 2022.

However, compared to the previous year, the audit results of the LKPD fiscal year 2022 showed a decrease in BPK's opinion, namely, from an Unqualified Opinion to a Qualified Opinion in 2 Provincial Governments, 12 Regional Governments, and 4 City Governments, as well as a decrease from Unqualified Opinion to Adverse Opinion in 1 District Government.

The issues affecting the fairness of the presentation of LKPD fiscal year 2022 to get Unqualified Opinion include:

1. cash deficiencies at the Expenditure Treasurer that have not been recovered by deposits to the regional treasury;
2. fixed assets that have not been recorded and/or cannot be traced;
3. realization of irregular expenditure on goods and services that is not in compliance with provisions and/or is not supported by proof of accountability; and

excess payments owing to insufficient work volume, non-compliance with work specifications, as well as non-compliant work planning and implementation procedures have not been recovered by depositing them into the regional treasury.

BPK gave 697.383 audit recommendations to all audited entities between 2005 and the first semester of 2023. 566.815 audit recommendations were made specifically for regional governments and BUMD, accounting for about 81% of all recommendations. "Encouragement from DPD leaders and members to regional heads is crucial to increasing the commitment of entity leaders in accelerating the completion of follow-up to BPK recommendations as a joint effort to strengthen regional government accountability," said Hendra.

The IHPS I 2023 includes summary of 705 Audit Reports, comprising 681 Financial Audit Reports, 2 Performance Audit Reports, and 22 Special Purpose Audit Reports. BPK’s audit results showed 9.261 audit findings. Based on the audit, the entities have followed-up the recommendations throughout the auditing process by depositing money and/or handing over assets amounting to Rp852,82 billion, including contributions from regional governments and Regional-owned Enterprises amounting to Rp597,25 billion. The top three contributors making significant deposits of money and/or handing over assets during the audit process are the Ogan Ilir Regency Government, DKI Jakarta Provincial Government, and Mahakam Ulu Regency Government

Public Relations and International Cooperation Bureau