Indonesia's Supreme Audit Agency (BPK) Finds Wasteful Regional Government Spending; Jakarta Included

According to findings from the Indonesian Supreme Audit Agency (BPK), 56 regional governments (pemda) engaged in wasteful spending or overpricing in the second semester of 2023, totaling Rp86.44 billion (approximately US$5.7 million).

This is recorded in the *Summary of Audit Results Semester II 2023 (IHPS)* report released in early June 2024.

The BPK did not detail all the regional governments involved in this wasteful spending. They only specifically named three: the Jakarta Provincial Government's Food Security, Maritime, and Agriculture Agency (DKPKP), the Central Papua Provincial Government, and the Southeast Minahasa Regency Government.

The BPK stated that the Rp25.79 billion payment for subsidized affordable food at the Jakarta Provincial Government's DKPKP did not reflect the actual cost and was higher than the average purchase price from vendors.

This issue was specifically found in the price components of beef and UHT milk.

For the Central Papua Provincial Government, the findings revealed inefficient payments for honorariums, daily allowances for official trips, and representation costs, amounting to Rp14.95 billion in wasteful spending.

Meanwhile, the Southeast Minahasa Regency Government incurred inefficient spending on honorariums for commitment makers, regional asset management units, and activity implementation teams/secretariats, totaling Rp7.28 billion.

Based on these findings, the BPK recommended that the relevant regional heads review the appropriate regulations for subsidized affordable food payments and their verification mechanisms, considering the actual costs and a proportional profit margin.

The relevant regional heads were also asked to draft a revision of the regional regulation on unit price standards, referencing the Presidential Regulation on Regional Unit Price Standards.

Overall, the BPK has compiled 1,711 findings related to regional spending management, encompassing 2,709 issues.

These issues include 498 weaknesses in internal control systems (SPI), 2,163 non-compliance issues valued at Rp855.16 billion, and 138 issues of inefficiency, ineffectiveness, and uneconomical practices valued at Rp89.20 billion.

During the audit process, some of the regional governments involved have followed up on the BPK's recommendations by depositing Rp121.89 billion into regional treasuries.