History of Public Sector Performance Audit in Indonesia

Performance audit first became known in Indonesia in the private sector through internal audit in foreign companies such as BPM, Stanvac, Shell, and Unilever. In the government sector, has pioneered DJPKN performance audits since the early 1970's, and began to be implemented programmatically in the 1980s.

Broadly, the historical development of public sector performance audits in Indonesia can be explained as follows:

• 1936

With 'besluit No. 44 dated October 31, 1936' explicitly stated that Djawatan Akuntan Negara (DAN) assigned to conduct research on the books of the various state enterprises and certain office. Thus, it can be said That the first APIP (aparat pengawas internal pemerintah/Internal government regulatory authorities) in Indonesia is Djawatan Akuntan Negara(DAN). Structurally DAN - which oversees the management of state-owned companies - are under the Ministry of Finance.

• 1959

With the Finance Minister Regulation No. 175/BDS/V dated December 19, 1959, Djawatan Akuntan Pajak (DAP) were formed in 1921 - also under the Ministry of Finance - combined with DAN.

• 1961

Furthermore, by Presidential Decree No. 9 of 1961 on the instructions for the Chief of  Djawatan Akuntan Negara (DAN), DAN was removed from the position of General of Treasury and enhanced its position directly under the Ministry of Finance. DAN is a tool of the government in charge of doing all the work for government accountants for all departments, department and agencies under his control. Meanwhile, budget oversight function performed by Treasury General.

• 1963

By Presidential Decree No. 29 Year 1963 on State Finance Supervision, Supervision Affairs established the Department of Revenue, Finance and Control (read: Ministry of Finance). While in each of the Department of Financial Control Section was independently formed of the Finance Department is concerned. The working relationship between Affairs Oversight and Financial Control Section is coordinated.

• 1966

By Presidential Decree No. 239 of 1966 established Direktorat Djendral Pengawasan Keuangan Negara (DDPKN)/the State Financial Supervision Directorate generals in the Ministry of Finance. DDPKN Duties include oversight of the budget and oversight entity / department, which was originally the duty of DAN and Thesauri General.

• 1968

By Presidential Decree No. 26 Year 1968 on January 24, 1968 on State Financial Control repealed Presidential Decree No. 29 Year 1963. Presidential Decree No. 26 of 1968 applies retroactively to the date of 15 November 1966 the date of the establishment of DDPKN. based on this Presidential Decree, DDPKN consists of three directorates namely Direktorat Pengawasan Anggaran Negara (DPAN)/the Directorate of State Budget Monitoring, Direkorat Akuntan Negara (DAN)/Directorate of State Accountant, and Direktorat Tata Usaha Keuangan Negara (DTUKN)/the Directorate of State Finance Administration.

Based on Presidential Decree No. 26 of 1968 is also in each department / agency that controls the state budget section itself, held unit Financial Supervision under the leadership of Inspector General of the Department.

• 1971

By Presidential Decree Number 70 of 1971 on State Finance Monitoring Working Procedure, DDPKN (known then as DJPKN) split itself with the creation of several new directorates, Direktorat Pengawasan Perminyakan (DPP)/the Directorate of Petroleum Monitoring, Direktorak Perencanaan dan Analisa (DPA)/the Directorate of Planning and Analysis, Direktorat Pengawasan Internal (DPI)/Directorate of Internal Audit which later became Direktorat Pengawasan Kas Negara (DPKsN) the Directorate of Treasury, Direktorat Pembukuan Keuangan Negara DPbKN)/State Finance and Accounting Directorate. DJPKN has the tasks of control over the entire execution of the state budget, region budgets, and state-owned enterprises / regions. Based on Presidential Decree No. 70 Year 1971, specifically in the Financial Department, the task of the Inspectorate General of the state in the areas of financial control by DJPKN.

• 1983

Issued Presidential Decree No. 31 Year 1983 on May 30, 1983. DJPKN (Direktorat Jendral Pengawasan Keuangan Negara) transformed into BPKP (Badan Pengawas Keuangan dan Pembangunan), a non-departmental government agencies (Officials) under and responsible directly to the President.

One consideration the issuance of Presidential Decree No. 31 Year 1983 on BPKP is needed an agency or institution can perform its function freely without having the possibility of resistance to government organizational unit object inspection. Because DJPKN was Apparatus of Finance Minister, it is not possible for DJPKN to supervise and inspect  the Minister of Finance and his officials indepedently.

Presidential Decree No. 31 Year 1983 shows that the Government has put BPKP organizational structure in accordance with the proportion in the constellation of government institutions that exist. BPKP the position that is independent from all the departments or agencies, of course, can better carry out its functions and objectives.

• 2001

With the change of cabinet, issued Presidential Decree No. 103 of 2001 concerning the status, duties, functions, authority, organizational structure, government institutions and non-ministerial as already amended by Presidential Decree No. 9 of 2004. Mentioned in Article 52, BPKP has the tasks of government tasks in the field of financial supervision and development according to the legislation.