Vague Audit of Sovereign Wealth Fund

Summary

The audit mechanism for the Sovereign Wealth Fund (SWF) or the Investment Management Institution (LPI), which will be named Nusantara Investment Authority is stirring controversy. Law No. 11/2020 on Job Creation and the draft government regulation (RPP) regarding the LPI regulates that audit of sovereign wealth funds is carried out by public accounting firms. However, the Supreme Audit Agency (BPK) as the state auditor is against the idea, considering that the LPI is established and operated with state assets and budget. 

Member III of BPK Achsanul Qosasi said his institution would continue to audit the LPI, in accordance with Law No. 15/2006 on BPK. The law mandates the BPK to audit the central government, regional governments, Bank Indonesia, State-Owned Enterprises (BUMN), Regional-Owned Enterprises (BUMD), Public Service Agencies (BLU), and other institutions or agencies that manage state finances. "All agencies that use the state budget are objects of BPK inspection," Achsanul said.

Moreover, said Achsanul, even though the president or minister decided that a public accountant would audit the LPI, the BPK could still carry out audits in accordance with their authority. “BUMN also audited by a public accounting firm for its financial reports. However, BPK is still conducting audits on the use of funds and their performance," he said.

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