BPK: Jakarta Must Innovate to Improve the Quality of Regional Financial Management

The Jakarta administration once again won an Unqualified Opinion (WTP) from the Supreme Audit Agency (BPK) on the Regional Government Financial Reports (LKPD) for the 2021 Fiscal Year.

This is expected to be a momentum to improve the quality of transparency and accountability

That means that Jakarta has successfully maintained the WTP predicate for five consecutive years.

Jakarta BPK Representative Head Dede Sukarjo congratulated and appreciated the leadership and all ranks of the administration who had succeeded in maintaining the opinion of the WTP.

Jakarta Breaks Record By Receiving WTP from BPK Five Times in a Row

"This is expected to be a momentum to improve the quality of transparency and accountability in the administration's regional financial management," he expressed, on the sidelines of the Plenary Meeting for Submission of Examination Results Reports (LHP) on the 2021 Jakarta administration Financial Reports, Tuesday (5/31).

He explained that Jakarta should pay attention to several issues in anticipation of the future and encourage improvements in the quality of management and accountability of state finances.

He stressed the importance of intensifying monitoring and controlling the management of cash accounts at regional organizations and Bank DKI. It was aimed at avoiding misuse of cash accounts and escrow accounts that had no legal basis and without going through the approval of the BPKD as BUD.

"That's why we (BPK) recommend that the remaining funds in the account be immediately transferred to the regional treasury account according to the stipulated time limit," he said.

On the income side, BPK found weaknesses in the process of data collection, determination, and collection of regional taxes in Jakarta which resulted in a shortage of regional tax revenues. Among them were 303 taxpayers on Building and Land Acquisition Tax (BPHTB) who had completed the transfer of title to land or building ownership certificates, but the BPHTB was not set at Rp 141.63 billion.

"It happened, as the validation on the proof of payment for BPHTB was executed before the verification and validation process for calculating BPHTB provisions," he explained.

On the expenditure side, several problems were also detected including, overpayment of salaries/TKD/TPP, shortage of collection and deposit of BPJS Kesehatan and BPJS Ketenagakerjaan, overpayment of goods and services expenditure, and overpayment of work that was not following the contract.

Then on asset management, they also found a lack of fulfillment of the Building Floor Coefficient (KLB) obligations, the recording of multiple fixed assets has not been assigned a status, as well as 3,110 parcels of land, have not been certified, and the use of fixed assets from third parties is not supported by a cooperation agreement.

In the process of preparing the report on the results of the examination of the financial statements, they had requested responses from the related officials and requested an action plan.

It was important to ensure the commitment of the relevant officials in completing all follow-ups to the recommendations of the BPK examination results timely.

Including complying with Article 20, Law number 19/2004 on Financial Audit and State Financial Responsibility which requires officials to provide answers or explanations to the BPK on the follow-up to the recommendations in the BPK examination report no later than 60 days after the LHP was received.

He added that the financial audit of local government reports was aimed at providing an opinion on the fairness of the financial statements. The opinion is an examination of the fairness of the information in terms of the financial statements of the financial examiner not intended to reveal fraud or in financial management.

“The audit of financial statements also assesses the design and implementation of control systems in financial management and the process of preparing financial statements," he uttered.