This is my first experience anyway to join financial audit budget year 2015 in North Sumatera. Such an infant started his solid food, I strived to figure out what proper actions and reactions need to be undertaken in particular circumstances; whether I need to directly swallow, or a bit chew, or I urgently need to throw it up. I would say that there is no such best aid for me except the time.
This post will give you a brief description
about what government auditing taken place. As stipulated in Government Decree
No. 71 Year 2010 regarding Government Accounting Standards, all reporting
entities in Indonesia shall apply accrual basis on their reporting; officially
commenced in this Budget Year 2015. For private companies, accrual basis might
be not-too difficult thingy. Instead, accrual basis in preparing Financial
Statements (not Cash Toward Accrual/CTA)
is most likely troubled the governmental institutions. Well, from my point of
view, it is only because they are not used to apply it. Due to change in
accounting policy (CTA to Accrual), government needs to prepare 7 types of
reports, namely (1) Statement of Budget Realization, (2) Laporan Perubahan
Saldo Anggaran Lebih (I have no idea its term in English), (3) Operational
Statement (similar with Statement of Comprehensive Income in private
companies), (4) Statement of Change in Equity, (5) Balance Sheet, (6) Cash Flow
Statement, and (7) Notes to Financial Statements. In sum, it pretty burdens the
financial statements preparers, including the entity where I joined the audit.
Furthermore, this analogy hopefully simplifies the understanding about governmental institution. One local government issues a set of financial statement which consists of 7 reports. The reports are consolidated from Satuan Kerja Perangkat Daerah (SKPD). The government-SKPD relationship is like parent and subsidiary companies. Unfortunately, the subsidiary companies (read: SKPD) have no sufficient capacity to prepare required reports. The classic problem is actually due to capacity of human resource in rural/local area. Whereas, the government utilised budgets to fund some trainings which, nevertheless, are not effective yet. So, could you imagine how the parent company (local government) prepare the consolidated financial statements? It is solely based on system so-called SIMDA Keuangan. Beside lack of knowledge about accrual basis on preparing financial statements, the person in charge at SIMDA Keuangan generally has no ample understanding to input the economic transactions into system. Ok. It’s so challenging; for them.
Furthermore, this analogy hopefully simplifies the understanding about governmental institution. One local government issues a set of financial statement which consists of 7 reports. The reports are consolidated from Satuan Kerja Perangkat Daerah (SKPD). The government-SKPD relationship is like parent and subsidiary companies. Unfortunately, the subsidiary companies (read: SKPD) have no sufficient capacity to prepare required reports. The classic problem is actually due to capacity of human resource in rural/local area. Whereas, the government utilised budgets to fund some trainings which, nevertheless, are not effective yet. So, could you imagine how the parent company (local government) prepare the consolidated financial statements? It is solely based on system so-called SIMDA Keuangan. Beside lack of knowledge about accrual basis on preparing financial statements, the person in charge at SIMDA Keuangan generally has no ample understanding to input the economic transactions into system. Ok. It’s so challenging; for them.
Moving forward, the supreme audit
institution is given limited period to conduct audit (30 days). In addition,
there are 60 days to prepare audited financial statements before submitting to
House of Representatives. As stipulated in Act No. 15 Year 2006 regarding Badan
Pemeriksa Keuangan (BPK), BPK is authorized to conduct audit concerning usage
of state/local budgets. The audit result, as one of the government
accountability, is informed to House of Representatives.
