Policy Note: Questioning the Objectivity Of BPK Investigative Audit on Hambalang

November 15, 2013

By: Alamsyah Saragih[1]

 

Background

The Directorate General of Sports of the National Education Department initiated the Hambalang Project of National Students Sports Training and Education Center (PLOPN) in 2003-2004. At that time, there was a need for an education and sports training center to prepare national athletes up to an international standard.[2] Based on the 2004 research, there were five choices for locations; Karawang, Cariu, Bogor, Cibinong, Cikarang, and Bukit Hambalang (Hambalang Hill).

The Regent of Bogor issued a principal permit for PLOPN building in Hambalang on July 19, 2004., directorate General of Sports and Directorate of Youth of the National Education Department transferred the PLOPN Project to National Ministry of Youth and Sports in 2007. Finally, the name of the project changed into National Students Sports Training and Education Center.

The case was widely discussed because of the issue of corruption which was involving many actors from Democratic Party and the officials in relevant ministries who approved the budget and permits. From February 27, 2012, at the request of Parliament, the BPK (Badan Pemeriksa Keuangan – State Audit Agency) began an investigation into the Hambalang Project., It aimed to calculate the misuse of funds and to find how this misuse was connected to the authorities involved.  The State Audit Agency submitted the audit report (LHP) to Parliament on August 28, 2013. One of the results of the finding mentions that the loss to the state reached Rp 463.6 billion (40,685,413 USD)

Controversy of Audit report from the State Audit Agency

The public was surprised by the statement of the Chairman of BPK that the full audit report, submitted to the Parliament, can not be disclosed to public based on Public Information Disclosure Law (UU KIP). Hadi Purnomo stated that the results of the investigation phase-II regarding Hambalang is confidential based on Article 7, section (1) Law No. 14 of 2008 on Public Information Disclosure.[3]

The law regulates that Public Bodies should provide Public Information under their jurisdiction, other than exempt information. The government could use the relevant section from the Public Information Law, Article 17 point (a), as the basis to exempt this investigative audit report. This article states once an information is open, it would obstruct the law enforcement processes.

The statement drew criticism from civil societies. If the information is exempt because of pro justicia reason, BPK should submit the full version of the report to the Corruption Eradication Commission (KPK) rather than Parliament. The submission to Parliament should be in version which has no negative qonsecuences to its pro justicia purposed. However, the Parliament is a public domain.

This kind of exemption in information disclosure is known as “prejudice based exemption”. This exemption aimed to protect a presumption of  negative consequences impacted by the provision of information to public. In this case, the prejudice is that there would be an obstruction of the investigation process and it also will put the witness in danger. [4]

In some countries, i.e. United Kingdom and Canada, information related to an audit report is exempted if such disclosure could reveal a certain method or procedure used by the auditor in investigating the abuse within public agencies.[5]

A public authority, including the Parliament, could request BPK to conduct an investigation audit. The legal basis to conduct this investigation is in Law no. 15 of 2004 on Audit of State Financial Management and Responsibility, as follows:

Article 13

The auditor could carry out investigative audit to reveal any indication of state/ regional loss and/or criminal elements.

Article 14

(1)   If there is a criminal aspect found in the investigation, BPK shall report immediately the matter to the authority in accordance with the provisions of laws and regulations.

(2)   The procedure for the report submission mentioned in section (1) is jointly arranged by BPK and the government.

Different from a regular audit, which is intended to generate opinion on financial statement, the investigative audit is intended to determine whether there has been a fraud in the auditee. The corruption in Hambalang project has entangled politicians from Democrat Party and officials from some Ministries.

Within days, public was in shock again. There were two different types of information regarding this audit report. The copy of the audit report circulating amongst journalists is apparently different from the official report submitted to the Parliament. The summary, circulating amongst journalists, mentioned some initials of the Parliament members who allegedly violated the procedures in approving the budget. According to the Head of Parliament,  the report submitted by BPK did not contain the initials of Parliament members. BPK was then considered tinkering with the Hambalang audit phase-II (Kompas, 29 August 2013).

The public would still keep wondering on what is really going on. Various speculations, if left uncleared, will reduce the credibility of BPK and the Parliament. This paper aims to explain on how to solve these two public controversies which raises two big questions. The first question is:

  • Does the confidentiality of that document still apply after the document was fully submitted to the Parliament?
  • Does the issue of double report indicate that there has been a reduction in the objectivity of the audit report phase-II on Hambalang investigation?

Secrecy in Public Domain

In Law no. 15 of 2006, article 7 on State Audit Agency states that BPK should submit the audit report to the Parliament through a jointly-arranged procedure. The report which has been submitted is open to public.

Article 7 section (5), UU BPK (Law on State Audit Agency)

The result of the investigation on state financial responsibility and management which has been submitted to the Parliament, Senate, and sub-national Parliament, is open to public.

The investigation by BPK consists of three types: a) financial audit, b) performance audit, and c) spesific purpose audit. Financial audit is an examination on a financial statement of an institution. It results an opinion for the financial statement of auditee. Performance audit on financial management consists of examination on the aspect of economy, efficiency, and effectiveness. This type of audit results evidents, conclusion, and recommendations. In the first two types of audit, the auditor examine and evaluate the implementation of the internal government system. Spesific purpose audit results a conclusion whether or not there is any fraud or abuse in financial management.

Law no. 15 of 2004 article 14 on Audit of State Financial Management and Responsibility ruled that if an auditor discovers a criminal aspect, BPK should immediately report to the relevant authority in accordance with the laws and regulations. The procedure of submission is jointly-arranged between BPK and the Government. BPK has been pursuing an agreement for this procedure with the Indonesian Police, Attorney General, and the Corruption Eradication Commission.

In BPK regulation No. 01 of 2007 on State Auditing Standards, reporting to the authorities can be accompanied by closing the information qualified as confidential. However, the information omission or blackout must be accompanied by a legal reason (Attachment IV paragraph 29-31). The omission without a legal reason is a disinformation.

Attachment IV, VI, VIII, BPK Regulation No. 01 of 2007

Reporting Confidential Information

(Par. 29/33/21): … “Confidential information which is prohibited by the law and regulations to be disclosed to public shall not be disclosed in the audit report. However, the audit report shall reveal the confidentiality accompanied by the laws and regulations which led the information not to be disclosed.”

(Par. 30/34/22): … Another related situation in public safety could also cause an information is prohibited to disclose in the audit report… If possible, BPK could consult with a law consultant regarding request regulation or the situation which cause certain information not to be disclosed in the audit report.

Therefore, the BPK Audit Result should still include the explanation on the omitted information when such information is within a confidential category based on laws and regulations. That confidential information remains available on the Auditor’s Working Papers (KKP) is an inseparable part of the audit report. KKP is kept secret because its diclosure will reveal the procedures or methods used by the auditor that it might interfere with the process of audit in the future. When someone look at the KKP, it makes him possible to exercise the audit method used in the future audits. That is why KKP should be confidential.

The use of KKP for other purposes, i.e. for law enforcement purposes, will follow related laws and regulations. For example, for a follow up in a law enforcement process, it is not only information that is needed but original document of KKP is needed for legal evidence. The scheme is confiscation of crime evidence in the form of a confidential document. This procedure is to follow the Criminal Procedure Code  where confiscation requires approval from court. This was expressed by the Chairman of BPK:

“Only KPK can ask the 30 names that have been investigated by BPK. But that must be approved by the district court. We will definitely give (the names).” (Merdeka.com, 4 Sep 2013)

However, if the request comes from the law enforcement agencies which is not an attempt to confiscate evidence, let’s say it’s just an attempt to further follow the leads, the request of the copy of KKP does not require the court approval. Misleading in this case happened because of the precedent of Bank Century case. The Parliament required KKP and must request approval from the court beforehand. After all, Parliament is not a law enforcement agency who is authorised to confiscate original documents as legal evidence. To obtain a registered copy without court approval would actually be sufficient for this Hambalang case.

Even though BPK regulation regarding investigation report on state finances is passed prior the establishment of FOI law, legal reason and consideration of public interest has already been included. These provinsions are also regulated under FOI law. The omission or blacking out the exempt information are also stated in FOI law. This law also regulates omission of exempt information accompanied by explanation on reasons for exemption or the legal basis of the exemption.

Article 22 section (7) letter (e)UU KIP

In a document that contains exempt information as mentioned in article 17, therefore the exempt information can be blackened out accompanied by the legal reasons and its materials.

Article 2 section (4) – UU KIP

The exempted public information that is confidential in accordance with the law, properness, and public interest based on the examination of the consequences if the information is disclosed to the public, and also after carefully consider to exempt the public information shall protect broader interest than disclosing it and vice versa.

The Chairman of BPK didn’t explicitely explain that the names of 15 Parliament members are exempted information. At the time, The Head of Parliament said that the report from BPK never mentioned those names. It was also not clear whether the absence of 15 names in the audit report draft is because of the revision or it was never there at the first place.

Different from the report submitted to the Parliament, the report to KPK is supposed to be submitted in full version without information omission. This is because the reporting to KPK is for the purpose of law enforcement. For this case, BPK signed an agreement with KPK for the submission procedures when there is a criminal indication on the report. Besides, to enforce the law, KPK can even access information to the Auditor’s working paper if needed.

The secrecy of exempt information is no longer relevant if it has been in the public domain. For example, information about asset of 10 biggest debtors in a credit program for small and medium entreprises is legally exempted. It is because information of their financial condition is private and cannot be disclosed to public. This secrecy is also regulated by FOI law. However, when the public bank has announced the amount of asset of the 10 debtors in a public event, the exemption is no longer relevant because the information has already been in public domain.

As for the BPK investigative audit report, the secrecy argument based on the FOI law has a strong relevancy if it is only submitted to KPK. The investigation process by the KPK could be hampered if the document is disclosed to public. Even the Parliament is the one who requested BPK to conduct investigative audit, the relevancy of secrecy should be questioned because the full version report has been submitted to the Parliament which is considered as a public domain.

Parliament is authorized to monitor political accountability. The Parliament’s role is not pro justicia, eventhough they can recommend further investigation to the relevant institution for law enforcement. Providing full report to the Parliament will reduce the substantial secrecy of an investigative audit report.

The submissions of the investigative audit report needs technical and substantial requirements so it would not violate the law. Moreover, in this particular case, there is indication that some of the Parliament members are alleged. Investigative audit report is different from regular audit report which also has to be submitted to the Parliament. Considering it is pro justicia, the submissions of the investigative Audit report to the Parliament needs certain requirement both in procedures and substantial limitations.

However, full investigative  Hambalang investigative audit report phase II has already been submitted to the Parliament. This shifted the status from exempt information into public information; its secrecy is no longer relevant. The concern of the secrecy appears when Vice Chairman of Parliament, Priyo Budi Santoso suggested BAKN (State Financial Accountability Body) not to analyze the Investigative Audit report. Opinion that spills over affected the Chairman of BPK to confirm that he will share the information as it is only if the document status is no longer classified. He stated that:

“If it is no longer classified, I will disclose everything. Since it is still classified and regulated in the law, I cannot disclose.” (Merdeka.com, Thursday 29 August 2013).

Allowing the report being held hostage by the Parliament Leader will make its secrecy status to be ambiguous. Allowing those information to be some kind of “pseudo-secrecy” is a fundamental error and against the purpose of the secrecy itself. This is what Aftergood called as bad secrecy on a political interest. It would be better if the Hambalang investigative audit report phase II, which is already in public domain, is disclosed so it would not be used as deterrence by the elite. The public can also monitor the follow up of the investigative audit.

Has there been a reduction of objectivity in BPK Investigative Audit report?

It also seems that confidentiality of KKP was the reason that causes BAKN (Badan Akuntabilitas Keuangan Negara – State Finance Accountability Agency) recommended an investigation on the leakage of information about the initial of 15 Parliament members stated in KKP.

“So (it) encourages BPK ethics committee to trace the person who leaked BPK phase II audit data on Hambalang case,” (Head of BAKN, Sumarjati Arjoso, Hukum Online, 13 Sep 2013).

“The nature of BPK working papers themselves is very confidential; therefore it’s clearly against the law. If we find the leaker, appropriate action must be taken, so that this will not happen again. (Teguh Juwarno, vivanews, 13 Sep 2013).

However, we have to bear in mind that there might be an internal disappointment within the BPK. There might be some efforts to reduce the objectivity of the Audit Report that might cause that internal disappointment. If that’s the reality, the leaker is a whistle blower who must be protected.

If the draft report has been revised, is the revision reducing or actually maintaining the objectivity of the investigation?  Public cannot draw a conclusion only by using partial information. If the revision reduced the objectivity of investigation, this has violated BPK code of conduct. BPK Regulation No. 1/2011 on BPK’s Code of Ethic forbid its members of any effort to alter investigation findings, opinion, conclusion and investigation recommendation which is not in line with the facts during investigation, refer to Article 8 section (2) letter (h).

BPK members, as state officials, are forbidden:

h. to command and/or to influence and/or to change investigation findings, opinions, conclusions, and investigation recommendations that is not in line with the facts and/or evidences found during investigation, so that investigation findings, opinions, conclusions, and investigation recommendations becomes subjective.

The situation in BPK raised a few questions recently in relation with the political dynamic  towards 2014 general election. BPK member, Ali Masykur Musa, is one of the candidates in Democratic Party convention; the public also knows that Hambalang case has dragged a number of politicians from Democratic Party beforehand. BPK’s Code of Ethic regulates that its officials are prohibited to participate in practical politics.

Article 6 section (2) BPK Regulation No. 1/2011

BPK Officials, Auditors, and Staff are prohibited:

a.  To take side and to give support in practical political activities,

If there is no explanation, public will continue on speculating of what actually happens. This will degrade BPK’s credibility in public’s perspective. At least, there are two questions: first, why the absence of 15 names of parliament members from the full investigative audit report is not accompanied by legal reason? Second, if the submission of the Audit report to KPK is pro justicia scheme, why would they submit the same full report to the Parliament? Is omitting 15 names of Parliament members in the full report still relevant for KPK which is supposed to enforce the law by following up BPK findings? Because the Auditor’s Working Paper is a state-classified document, the investigator must obtain approval from the court in order to confiscate the document. If BPK do not put the 15 names in report sumitted to KPK, it will cause KPK having to confiscate the Auditor’s Working Paper by requesting approval from the court. Step taken by BPK created an impression that it wants to delay the law enforcement process.

 

Solving Public Controversy 

At least there are two ways to solve controversies so that it will not be counter-productive and create distrust to two state institutions (BPK and Parliament) mentioned in the Constitution; first, settling the information status of Hambalang investigative audit report phase II. Second, ensuring if there is any reduction of objectivity in the Hambalang investigative audit report phase II.

The full report of Hambalang case which is already submitted to the Parliament by BPK is public information. Even though in the beginning, it contained information which might be exempted, since the full version has been submitted to the Parliament, all the information becomes public. Everyone can request access to information in accordance with FOI law. If BPK rejecs those requests, it can be examined by the Information Commission. If BPK does not have any intention to delay, then Chief Information Officer in BPK should conduct the consequential harm test as soon as possible. Letter of rejection should be delivered to the requester and avoid waiting the due date. If needed, public interest test can be conducted on the report after the requester apply for dispute settlement to Information Commission. If the Information Commission decides that the report is open/public, and BPK does not object, then it is legal for BPK to disclose the information to the requester. In this case, BPK would execute an in force decision.

Holding BPK Ethic Hearing. To ensure whether the reduction of objectivity exists in Hambalang investigation audit report phase II, the Parliament need to force BPK to hold BPK Ethic Hearing. The Ethic Board will investigate the reporting process. The Board will decide whether the absence of 15 names within the report is because of abuse of power which reduced the objectivity in the investigation. If the Ethic Hearing concluded that the BPK officials who are involved in the process did not violate the code of ethics then the public should believe it. If BAKN is serious in its analysis, then its recommendation supposed to request BPK to conduct Ethic Hearing. The hearing is aimed to examine whether there is any effort to reduce objectivity by omitting 15 names without accompanying any legal explanation in the report rather than requesting BPK to investigate the Working Paper leakage. The next question would be whether the leaking of 15 names from the Working Paper is an effort by a whistleblower in BPK to inform the public that there is an objectivity reduction in the reporting?



[1] The author is a Senior Advisor in PATTIRO and served as a Chairman in Central Information Commission (KIP_ 2009-2011

[2]The issue on Hambalang case started spreading out on 21 April 2011 around 7 pm. There was a commotion on the third floor of Kemenpora (Ministry of Education and Sports), Senayan, Central Jakarta. That evening, the Secretary Ministry of Education and Sports, Wafid Muharram, was caught red-handed by the Corruption Eradication Commission while he was receiving Rp 3.2 billion as a bribe from PT Duta Graha Indah (PT DGI), the partner of the ministry. Along with him, they also caught the Marketing Director of PT Anak Negeri Mindo, Rosalina Manulang, and the Marketing Manager of PT DGI, Muhammad El Idris. This is the beginning of corruption case reveal on Wisma Atlet Sea Games, Palembang which then uncovered a number of Democratic Parties Cadres including Angelina Sondakh which then turned as a suspect.

[3] Article 7 paragrpah (1) Public Information Disclosure Law: Public Agency shall provide, deliver, and/or publish Public Information under its jurisdiction to the Public Information Applicant, other than the exempt informations with terms.

[4] Article 17 Public Information Disclosure Law: Each Public Agency shall open the acess to every Public Information Applicant to obtain information, except:

a.   Public Information, which when opened and given to the Public Information Applicant could hamper the process of law enforcement; the information which could:

1.   impede the investigation process and the investigation of a criminal offense;

2.   reveal the identity of the informant, reporter, witness, and/or the victim who know the criminal offense;

3.   reveal the criminal intelligence data and the plans related to the prevention and the management of all forms of transnational crime;

4.   jeopardize the safety and lives of law enforcement and/or his/her family; and/or

5.   Jeopardize the safety of equipment, facilities and/or law enforcement infrastructure.

[5] UK FOI Act, Section 33: (1) This section applies to any public authority which has functions in relation to: a)) the audit of the accounts of other public authorities, or b) the examination of the economy, efficiency and effectiveness with which other public authorities use their resources in discharging their functions; (2) Information held by a public authority to which this section applies is exempt information if its disclosure would, or would be likely to prejudice the exercise of any of the authority’s functions in relation to any of the matters referred to in subsection (1).; (3) The duty to confirm or deny does not arise in relation to a public authority to which this section applies if, or to the extent that, compliance with section 1(1)(a) would, or would be likely to, prejudice the exercise any of the authority’s functions in relation to any matters referred to in subsection (1).

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