Until now, BPK, which is regulated in Law Number 5 of 1973 concerning the Supreme Audit Agency, still does not have an adequate operational basis in carrying out its duties to examine the management and responsibilities of state finances. Prior to the enactment of Law Number 1 of 2004 concerning the State Treasury, apart from being guided by the IAR, in the implementation of the BPK examination, it was also guided by the Indische Comptabiliteitswet or ICW (Staatsblad 1925 Number 448 Jo. As stipulated in the 1945 Constitution of the Republic of Indonesia, The audit that is the duty of the BPK includes an examination of the management and responsibility of state finances. The audit covers all elements of state finances as referred to in Article 2 of Law Number 17 of 2003 concerning State Finance. Financial audit is an examination of the financial statements of the central government and local government. This financial audit is carried out by BPK in order to provide a statement of opinion on the fairness of the information presented in the government's financial statements.
The audit implementation as intended above is based on an audit standard.
Performance inspection is an examination of economic and efficiency aspects, as well as an examination of effectiveness aspects which are commonly carried out for the benefit of management by the government's internal supervisory apparatus. Article 23E of the 1945 Constitution of the Republic of Indonesia mandates BPK to carry out audits of the performance of state financial management. The purpose of this examination is to identify matters that need the attention of representative institutions. As for the government, performance inspection is intended to ensure that activities financed by state/regional finance are carried out economically and efficiently and meet their targets effectively. Examination with a specific purpose, is an examination carried out with a special purpose, outside of financial audits and performance audits. Included in this specific purpose audit are audits of other matters relating to finance and investigative audits. The audit implementation as intended above is based on an audit standard. These standards are prepared by BPK by taking into account the standards in the international auditing profession. Before the standards are set, BPK needs to consult with the government and professional organizations in the field of auditing. BPK has freedom and independence in the three stages of examination, namely planning, implementation, and reporting of audit results. Freedom in the planning stage includes freedom in determining the object to be examined, except for inspections whose objects have been regulated separately in the law, or inspections based on special requests from representative institutions. To realize a comprehensive plan, BPK can take advantage of the results of inspections by the government's internal supervisory apparatus, paying attention to input from representative institutions, as well as information from various parties. Meanwhile, freedom in the implementation of audit activities includes, among others, freedom in determining the time of implementation and inspection methods, including investigative audit methods. In addition, BPK's independence in auditing state finances includes the availability of adequate human resources, budgets, and other supporting facilities.
39;s internal supervisory apparatus is obliged to submit the results of its examination to the BPK.
BPK can take advantage of the work carried out by the government's internal control apparatus. Thus, the extent of the audit to be carried out can be adjusted and focused on areas that have the potential to impact on the fairness of financial statements as well as the level of efficiency and effectiveness of state financial management. For this reason, the government's internal supervisory apparatus is obliged to submit the results of its examination to the BPK. BPK is given the authority to obtain data, documents, and information from the audited party, the opportunity to physically examine every asset that is under the management of the inspected agency official, including sealing to secure money, goods, and/or state financial management documents at the time of the inspection. inspection in progress. The results of each examination carried out by the BPK are compiled and presented in an inspection report (LHP) immediately after the audit activity is completed. The financial audit will produce an opinion.
The performance examination will produce findings, conclusions, and recommendations, while the examination with a specific purpose will produce conclusions. Each report on the results of the BPK examination is submitted to the DPR/DPD/DPRD in accordance with their respective authorities, followed up by, among others, discussing it with related parties. In addition to being submitted to representative institutions, the audit report is also submitted by the BPK to the government. In the case of a financial audit report, the results of the BPK audit are used by the government to make necessary corrections and adjustments, so that the audited financial statements contain the corrections referred to before being submitted to the DPR/DPRD. The government is given the opportunity to respond to the findings and conclusions presented in the audit report. The response is included in the report on the results of the BPK examination which is submitted to the DPR/DPRD. If the examiner finds a criminal element, this Law requires the BPK to report it to the competent authority in accordance with the laws and regulations.
BPK is required to compile an overview of the results of examinations conducted for 1 (one) semester. The said summary is submitted to the DPR/DPD/DPRD in accordance with their respective authorities, and to the President and the relevant governor/regent/mayor in order to obtain comprehensive information on the results of the examination. In the context of transparency and increasing public participation, this Law stipulates that any audit report that has been submitted to a representative institution shall be declared open to the public. Thus, the public can have the opportunity to know the results of the examination, among others through publications and the BPK website. This law mandates the government to follow up on BPK's recommendations. In this regard, BPK needs to monitor and inform the results of the follow-up monitoring to the DPR/DPD/DPRD. As mandated in Article 62 paragraph (3) of Law Number 1 of 2004 concerning the State Treasury, this Law further regulates the imposition of state/regional compensation for the treasurer. BPK issues a decision letter on the determination of the time limit for the treasurer's accountability for the shortage of cash/goods that occurs, after knowing that there is a shortage of cash/goods in inventory that is detrimental to the state/regional finances. The treasurer may file an objection to the BPK's decision. The arrangement for the settlement of state/regional compensation is determined by the BPK after consulting with the government. The submission of the audit result report as referred to in this paragraph is required so that the BPK can evaluate the implementation of the audit conducted by a public accountant.
The results of the public accountant's examination and evaluation are then submitted by the BPK to the representative institutions, so that they can be followed up in accordance with their authority. Audits with certain objectives include, among others, examination of other matters in the financial sector, investigative examination, and examination of the government's internal control system. In preparing the audit standards as referred to in this paragraph, BPK shall determine the standard preparation process and consult on the substance of the standards to the Government. The standard preparation process includes steps that need to be taken carefully (due process) by involving relevant organizations and considering international inspection standards in order to produce generally accepted standards. The request can be in the form of the decision of the plenary meeting, work meeting, and the completeness of the representative institutions. Information from the government includes from independent institutions established in an effort to eradicate corruption, collusion and nepotism, such as the Corruption Eradication Commission, the Business Competition Supervision Commission, and the Financial Transaction Reports and Analysis Center. Information from the public includes research and development results, studies, opinions and information from related professional organizations, news from the mass media, direct complaints from the public. The use of examiners and/or experts from outside the BPK is carried out if the BPK does not have/do not have enough examiners and/or experts needed in an examination. The examiners and/or experts in certain fields from outside the BPK are examiners within the government internal control apparatus, examiners, and/or other experts who meet the requirements determined by the BPK. The use of examiners who come from the government's internal control apparatus is the assignment of the head of the agency concerned. Sealing is an action taken by the examiner as part of the inspection procedure for a maximum of 2 x 24 hours by taking into account the smooth implementation of the work/service at the place being inspected.