The Asian Voice

The crisis within a crisis, Covid-19 and corruption: Jakarta Post contributor

The writer says that economic pressures have tempted officials authorised to manage government aid to abuse their authority to enrich themselves.

Indonesia's anti-graft agency (KPK) officials show bank notes as evidence of a million-dollar bribery case of goods to be distributed as Covid-19 social assistance packages in Jakarta, Indonesia on Dec 6, 2020. PHOTO: REUTERS

JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) - In less than two weeks after the arrest of then-maritime affairs and fisheries minister Edhy Prabowo in late November on charges of corruption, then-social affairs minister Juliari Batubara was named a corruption suspect by the Corruption Eradication Commission (KPK).

According to KPK chairman Firli Bahuri, the graft case implicating Mr Batubara is allegedly associated with the procurement of food packages under the social assistance program for poor people hard hit by the Covid-19 pandemic.

The KPK had seized Rp 14.5 billion (S$1.4 million) in bribes the suspects took from the suppliers of the food packages.

The corruption cases raise questions regarding the effectiveness of the internal control systems within the inspectorate at the ministries.

As part of the government internal supervisory apparatus (APIP), inspectorate personnel within a government agency are responsible for carrying out the internal control functions to ensure good governance.

Generally, APIP serves as the overseer of the administration of the government to ensure that all activities associated with state finances comply with laws and regulations.

Numerous studies on the role of APIP, including the inspectorates within regional administrations, concluded that improvements were needed to ensure that not only were APIP personnel independent and objective but also competent in carrying out a wide range of supervisory tasks, including detecting and preventing fraudulent acts.

Several studies suggest that officials in some inspectorates in the regions are not equipped with sufficient skills in fraud prevention and detection.

Several studies also suggest inspectorate officials are often controlled by the heads of the government agencies they oversee.

Studies on internal government supervision found many problems related to cultural factors, inadequate training and regulatory limitations that had hindered supervisors from performing their tasks independently and properly.

For example, based on prevailing regulations, the inspectorates in the ministries were under the direction of their respective ministers.

In such an atmosphere, how could the supervisors properly perform their oversight of the ministers? In many cases, the supervisors themselves were corrupt.

For example, in November 2019 a former chief of the inspectorate office of Bojonegoro regency administration was sentenced to five years in prison after being found guilty of corruption. APIP personnel engaging in corrupt acts is like having a computer antivirus that turns into a virus and causes severe damage to the entire system.

Many anti-corruption scholars and supporters are eager to know what the investigation by the KPK will reveal regarding the causes of the failure of the APIP to prevent corruption or misconduct.

The emergence of the Covid-19 pandemic poses not only a threat to our health and safety but is also affecting various aspects of our life, including our economy.

Multiple international reports highlight the vulnerability of many officials in charge of disbursing emergency aid under social assistance programs to malfeasance.

A report from the United Nations Office on Drugs and Crime (UNODC) stated that among the most vulnerable officials targeted by fraudsters during the pandemic were those associated with the distribution of social safety nets and the mobilisation of resources to address the health emergency.

A recent survey by Transparency International in Asia in 2020 found that 74 per cent of respondents had acknowledged corruption as a big problem during the pandemic.

Another report from Deloitte highlighted how the "fraud triangle" (pressure, opportunity, rationalisation) had also evolved as more people engaged in fraudulent acts.

Economic pressures often tempted officials authorised to manage government aid to abuse their authority to enrich themselves.

To overcome the rising threats of fraud during an emergency, many anti-fraud experts suggest that governments, when allocating resources to cope with the crisis, must have objective, clear, and transparent criteria for the beneficiaries and recipients of Covid-19 social aid.

Moreover, technology can also be employed to monitor the disbursement of resources to ensure efficiency, transparency and accountability. Governments also need to employ such measures as a comprehensive reporting mechanism, oversight and auditing.

The writer is director of the Centre for Forensic Accounting Studies, Islamic University of Indonesia (UII), and director of research at ACFE Indonesia. The Jakarta Post is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media organisations.

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