The Audit Board Audit Authority upon State-Owned Enterprises

DOI: 10.25041/fiatjusti sia.v12no1.1262 The Audit Board of Indonesia performs audits on the management and the accountability of state finances, including those implemented by StateOwned Enterprises. This study aims to see the synchronization of various regulations related to the authority of Audit Board in performing stateowned enterprises audit, as well as the audit conducted by the Audit Board on state-owned enterprises in the period of 2012-2017. This research is conducted by using normative legal research method, and data collection are done through library research to find relevant data. Based on the analysis, it is known that first, the regulation of Audit Board authority over state enterprises has been synchronized in several Acts. The audit conduct by The Audit Board is the attribution authority derived from the 1945 Constitution and further regulated in Acts. Second, the implementation of state-owned enterprises audit period 2012-2017 implemented against Persero and Perum with three types of audit, namely financial, performance and a specific purpose audit.

The Audit Board of Indonesia performs audits on the management and the accountability of state finances, including those implemented by State-Owned Enterprises. This study aims to see the synchronization of various regulations related to the authority of Audit Board in performing stateowned enterprises audit, as well as the audit conducted by the Audit Board on state-owned enterprises in the period of 2012-2017. This research is conducted by using normative legal research method, and data collection are done through library research to find relevant data. Based on the analysis, it is known that first, the regulation of Audit Board authority over state enterprises has been synchronized in several Acts. The audit conduct by The Audit Board is the attribution authority derived from the 1945 Constitution and further regulated in Acts. Second, the implementation of state-owned enterprises audit period 2012-2017 implemented against Persero and Perum with three types of audit, namely financial, performance and a specific purpose audit.
Audit of State-Owned Enterprises in the new order period implemented by the government that was the Director General of State Financial Supervision (DJPKN) Ministry of Finance. DJPKN performs audits of accountants on the financial statements of state enterprises and may also carry out operational audits. DJPKN is the forerunner of a non-departmental government institution that is Financial and Development Supervisory Bodies (Badan Pengawasan Keuangan dan Pembangunan/BPKP). 5 One of the functions of BPKP is to perform audits and give its opinion on SOEs financial statement and other bodies deemed necessary. BPKP performs supervision over all SOEs and other business entities which are all or part of their assets owned by the Central Government. 6 Whereas in Law No. 5 on 1973 of the Audit Board, it is stated that the BPK must audit the Government's responsibility to State Finance. Auditing of the State's financial accountability, includes the implementation of the State Revenue and Expenditure Budget, the Regional Revenue and Expenditure Budget and the State-owned enterprises budget, essentially all State treasure.
Reforms create some changes, including in the management and accountability of state finances. Some legislation is made and enhanced for the creation of state financial management order. The amendment of the 1945 Constitution of the Republic of Indonesia (UUD NKRI 1945) stipulates that BPK as the only audit institution charged with the audit of management and accountability state finances. Some legislation related to state finance, management and accountability, and state financial audit are prepared based on the mandate of the UUD NKRI 1945 or the Law. Some of these regulations affirm that BPK performs the audit of SOEs.
BUMN is regulated separately in Law No. 19 on 2003 of the State-Owned Enterprises. The law regulates the audit of BUMN's financial statements conducted by external auditors stipulated by the General Meeting of the Shareholders for Persero and by the Minister for Perum, in addition to the prevailing provisions, BPK may conduct auditing of the SOEs. 7 Auditing of financial statements is one type of the audit of management and accountability of state finance, also, there are performance audit and audit for specific purposes. 8 The various regulations mentioned above set about the BPK audit of SOEs. Based on the explanations described, this research will raise the issue of: How does the synchronization of legal norms governing the authority of BPK in the audit of SOEs?; How is the implementation of management and accountability audit by BPK on SOEs for the period of 2012-2017?

B. Research Method
This research was conducted by using normative legal research method. Soekanto states that normative legal research includes research on legal principles, research on legal systematics, research on the level of legal synchronization, legal history research and comparative law studies. 9 The researcher will undertake an inventory of all positive laws related to the research object, and examine legal principles and legal synchronization about the arrangements concerning the audit of state finances and stateowned enterprise.
Data collection is done through literature research by conducting tracking regulations, scientific books, and other data relevant to the research. Library study conducted by reviewing various literature. The literature is from the central library of BPK, the national library, the online libraries or from other internet sources relevant to the research.
The data collected is secondary data consisting of primary legal material that is material derived from regulations related to research; secondary legal materials, namely legal materials that provide explanation of primary legal materials, including the results of research in the form of books, papers, or other forms that discuss the theme relevant to the research; and tertiary legal materials, namely materials that provide guidance or explanation of primary and secondary legal materials, such as dictionaries or books in other fields of science.

C. Discussion
Article 23E of the UUD NKRI 1945 stipulates that the Audit Board is a free and independent body to audit the management of and accountability for state finances. This provision confirms that BPK is an institution that has the authority to conduct audits of state finance.
Syafrudin argued that authority is what is called formal power, power derived from the powers granted by law or legislature or from executive power. It is, therefore, the power of a certain group of people or power over a particular sphere of government or governmental affairs, whereas competence is only about a certain "onderdeel" (part). In authority, there is competence (rechtbe voegdheden). Competence is the environment of public legal action, the scope of government competence not only covers the competence to make government decisions (bestuur) but including the competence in the framework of the execution of duties. The formation and the distribution of competence are generally stipulated in the Constitution. 10 According to Marbun, authority is power over a particular area of government that is formalized. Competence is the ability to act to perform certain legal relationships provided by law. 11 Soekanto states that the difference between power and authority that is power is the ability to influence others while authority is the power that exists on a person or group of people who have the support or gain recognition from the community. 12 Article 1 of Law No. 30 on 2014 of Administration of Government defines the competence as a right owned by the Bodies and/or Government Officials or other state organizers to take decisions and/or actions in the administration of government while the authority of government is the power of the Bodies and/or Government Official or another state organizer to act in the realm of public law. 13 Indroharto argued theoretically, the authority derived from the legislation that is obtained in three ways, namely attribution, delegation, and mandate. Attribution is the granting of government authority by the legislator to the organ of the government, the delegation is the handover of government authority from one governmental organ to another, while the mandate occurs when the organ of government allows its authority to be run by another organ on its behalf. 14 In simple terms, the authority of attribution is the authority bodies or government administrative officials obtained directly from legislation, delegation means the authority of administrative bodies/officials obtained from the delegation of other administrative bodies/administrators, and juridical responsibilities shall be transferred to the delegate's recipients. The mandate is not a transfer of the authority but the implementation of the authority by the administration on behalf of the definitive official when the definitive official is absent. 15 The 1945 Constitution of the Republic of Indonesia provides the authority of attribution to BPK to conduct audits of state financial management and accountability. UUD NKRI 1945 also provides that the Finance. State finance are all rights and obligations of the state that can be assessed with money, as well as everything in the form of money or goods that can be owned by the state related to the implementation of such rights and obligations, including: the right of the state to levy taxes, the obligation of the state to carry out the public service, state /regional wealth managed solely or by other parties in the form of money, securities, accounts receivable, goods, and other rights which can be assessed by money, including wealth separated in state/ regional companies.
The original 1945 Constitution of the Republic of Indonesia as well as after the changes did not define state finances. State finance based on the original 1945 Constitution according to Al Rashid is only limited to the state budget approved by the House of Representatives, 16 while Attamini defines the state finance as the state budget plus after analyzing the provisions of Article 23, in the article not only discuss the state budget, so the state budget is one element in state finance. 17 Asshidiqie expresses that in the original 1945 Constitution of the Republic of Indonesia definition of state finances is limited to the state budget. Following the amendment, state finances definition expansion is not only state budgets but includes state-owned money contained in or controlled by legal subjects or individual bodies, provided the money or assets that belong to the state. 18 According to Sutedi, the definition of state finance is plastic and depends on the point of view. So that when we talk about the meaning of state finances from the government point of view, the state finance is talking about the state budget. When it is viewed from the perspective of regional government, regional finance is talking about the regional budget, as well as SOEs. So, Sutedi argues that the definition of state finance is everything related to the state budget, regional budgets, and SOEs budget. 19 State financial management should be conducted in an orderly manner, and one of the efforts to realize the transparency and accountability of such management is the existence of a financial audit by a free and independent auditing body. It is one of the principles in the management of state finances. 20  Auditing is an independent, objective, and professional identification, analysis, and evaluation process based on the audit standards, to assess the truth, accuracy, credibility, and reliability of information on the management and the accountability of states finance. 21 Arens et al. suggest that the audit is the collection and the assessment of evidence of information to determine and report the degree of conformity between information and defined criteria. A competent and independent person should conduct an audit. 22 The auditing is carried out by BPK on all elements of state finances as stipulated in Law No. 17 on 2003 and performed with the financial, performance and a specific purpose audit.
The role of BPK as the auditor of state financial management and accountability is also regulated in Law No. 15 on 2006 of the Audit Board. This law is a mandate of Article 23G of the Constitution and also the successor of Law No. 5 on 1973 which is considered to be inconsistent with the development of the constitutional system. Article 6 paragraph (1) Law No. 15 on 2006 stipulates that BPK is responsible for auditing the management and accountability of state finances conducted by the Central Government, Regional Government, other State Institutions, Central Bank of Indonesia, State-Owned Enterprises, Public Service Bodies, Regional-Owned Enterprises, and other institutions or bodies that manage State finances. This audit is conducted by the provisions set in Law Number 15 of 2004. These provisions affirm the authority of BPK to conduct an audit of the management and accountability of state finances including SOEs.
SOEs are also regulated in their Law. Fundamentally, the establishment of SOEs is a mandate of Article 33 Constitution. The state controls production branches that are important and control the livelihood of the people. To carry out this mandate, the Government needs to increase the control of national economic power, either through sectoral regulation or through state ownership of certain units to provide optimal benefits to the community.
SOE is a business entity which is wholly or most of its capital owned by the state through direct participation derived from separated state wealth. SOE consists of Persero and Perum. Persero is a state-owned enterprise which is a limited liability company whose capital is divided into shares of which the state owns all or at least 51% of its shares with the main objective of pursuing profit. Perum is a state-owned enterprise whose capital is not divided into shares and wholly owned by the state for general benefit in the form of providing goods and services of high quality and at the same time pursuing profit. 23 The SOE Act is designed to create a management and supervision system based on the efficiency and the productivity principles to improve performance and value and avoid state-owned enterprises from actions beyond the principles of good corporate governance. SOEs need to cultivate a corporate culture and professionalism, among others, through improvements management and supervision to optimize its role and able to maintain its existence in competitive economic development.
Law Number 19 of 2003 on SOEs stipulates that the financial statements of SOEs for Persero are audited by an external auditor appointed by the General Meeting of Shareholders and appointed by the Minister for Perum. An audit was conducted to get an opinion on the fairness of the presentation of financial statements. By the provisions applicable to Persero, the audit of Persero's financial statements shall be executed by a public accountant under the provision of Article 68 paragraph (1)  The various regulations are by the legal level theory of Hans Kelsen. According to Kelsen, the level of legal norms or stufentheorie is tiered and layered in a hierarchy. That is, a lower norm applies, sourced and based on higher norms, and so on until a further non-traceable norm is the Basic Norm/ Grundnorm. 25 A legal norm is always sourced and based on the norms that exist above it and becomes the source and basis for lower norms so that if the basic norms change then the norm system under it becomes damaged. 26 Hans Nawiasky developed this theory under the theory von stufenufbau der rechtsordnung, by grouping legal norms into four levels consisting of Staatsfundamentalnorm(State Fundamental Norms), Staatsgrundgesetz (Basic Rules of State), Formell Gesetz (Formal Act); and Verordnung & Autonome Satzung (implementing and autonomous rules). Nawiaski further states that the basic norms of a country should not be called staatsgrundnorm but the fundamental norms. 27 Attamimi describes the structure of Indonesian legal hierarchy using Hans Nawiasky's theory. Based on the theory, the structure of the Indonesian legal system is listed as follows: regulated in the Constitution, but in Article 23C it is stipulated that matters concerning state finances will be regulated in a Law. Article 33 of the Constitution provides that the state controls the production branch which is important for the state and the control over the life of the people. The national economy is organized by economic democracy with the principle of togetherness, fair efficiency, sustainable, environmentally friendly, independence, and by maintaining the balance of national economic progress and unity.

Verordnung& Autonome Satzung: Audit Board Rules
There are provisions in the Law regulating the derivative provisions of the Act, such as the preparation of audit standards by the audit board.
Some of the regulations in the Law are used as the basis audit of SOEs by Audit Board; this is by the principle of legality 30 which means that the actions of the administration of government prioritize the legal basis of a decision and action made by the Bodies or Government Officials. BPK audit of SOEs by several general principles of state administration. 31 BPK audit of SOEs has been by; first, the principle of legal certainty, which prioritizes the basis of legislation, propriety, and justice in every policy of state organizers. BPK audit of SOEs has been regulated in various interconnected Laws. Secondly, the principle of openness, which means the public is entitled to obtain correct information about the administration of the state. The public can know and get information about the results of SOEs audit conducted by BPK. Third, the principle of professionalism, the principle that prioritizes the skills based on the code of ethics and regulations. Fourth, the principle of accountability which means that every activity and the result of the activities of the state organizers can be accountable to the people by the provisions. BPK audit is to show state financial management conducted by SOEs, and also generates auditing reports as a form of BPK accountability.
The number of SOEs in 2012 amounts to 140 companies consisting of 107 Persero, 19 Public Company Persero and 14 Perum, and in 2017 decreased to 115 SOEs consisting of 84 Persero, 17 Public Company Persero and 14 Perum. This decrease is due to several reasons, namely; first, the establishment of new SOEs such as PT Inalum. Second, the change in legal entity status such as Perum Pegadaian changed to PT Pegadaian. Third, the merger, PT Reasuransi Umum Indonesia merger into PT Reasuransi Indonesia Utama. Fourth, the formation of state-owned holding companies, for example, the establishment of 14 state-owned plantations into one holding state-owned plantation. Fifth, Sale or transfer of government shares to other SOEs, such as government shares in PT Sarana Karya which are sold to PT Wijaya Karya. 32 The Audit conducted by BPK consists of financial, performance and specific purpose audit. A financial audit is an audit of financial statements. This audit aims to provide opinions on the fairness of the information presented in the financial statements. A performance audit is an audit of the economic aspects, efficiency and effectiveness of state financial management that aims to identify issues that need attention from representative institutions, as for the government to carry out activities running economically, efficiently and effectively. Specific purpose audit is an audit that does not include a financial and performance audit. Specific purpose audit may take the form of compliance or investigative audits. 33 From 2012 to 2017, BPK has conducted audits of SOEs with three types of the audit with details as follows: BPK audits of SOEs amounted to 322 audits consisting of 8 financial audits, 57 performance audits and 257 a specific purpose audit. The quantity of BPK audits from 2012 to 2017 each year ranges from 46 to 58 audits. If only compared between the audit with the total of SOEs, BPK audits between 39-50% of the number of existing state enterprises. However, the percentage does not describe the fact of the audit conducted. Based on the data obtained, it is known that, First, audits of BPK on SOE is held with financial, performance and specific purpose audit. Although the Law on State-Owned Enterprises and related Law stipulates that for the audit of Persero's financial statements carried out by public accountants, in 2012 BPK performs an inspection of the financial statements of PT Jamsostek in 2011. This audit is based on the request of the House of Representatives to BPK to audit the financial statements and placement of funds PT Jamsostek before PT Jamsostek changed the Social Security Administering Body. 34 Second, several SOEs are audited more than once a year. For example PT PLN, in 2014 audited four times with audit object of electricity subsidy, purchasing and leasing of electric power, purchasing of coal and fuel oil, and unassigned government assistance. Audits of SOEs more than once a year 33  are generally experienced by SOEs that receive government assignments related to subsidies and public service obligations. Third, SOEs that received assignments related to subsidies and public service obligations are almost audited each year. The SOEs that receive this assignment include PT Pupuk Iskandar Muda, PT Petrokimia Gresik, PT Pupuk Sriwijaya, PT Pupuk Kaltim for fertilizer subsidy, PT Pelni and KAI for public service obligations, PT PLN for electricity subsidy, PT Pertamina for certain fuel subsidies and LPG, and Perum Bulog for subsidizing rice. This audit is conducted among others related to the determination of the amount of subsidy that becomes government obligation to be paid to SOEs. Fourth, during the period 2012-2017, not all SOEs are audited by BPK, on the other hand, there are several SOEs that are audited more than once during this period. For example, Bulog, if the audit object is a calculation of rice subsidy is conducted annually, then during the period 2012-2017, the audit subsidy is carried out six times and does not include with other audit objects, during PT. Djakarta Lloyd or Perum PPD is not undergoing audited during the period

D. Conclusion
Based on the above research, the research could be concluded that Pancasila is a Staatsfundamentalnorm which became the source of all legal and basic sources in determining the basic rules of the state. BPK audit of SOEs is carried out with three types of audits: financial, performance and specific purpose audit, and the most widely performed are specific purpose audit. Audits were carried out either on Persero or Perum.  Number 1, January-March 2018 Several SOEs, generally getting government assignments related to subsidies audited more than once a year, on the other hand, there was some SOEs, not audit during that period. Therefore, it is advisable for BPK to conduct an audit on every SOE to create justice for every SOE and to ensure that the management and the accountability of state finances in SOEs have been implemented in accordance with regulation. Performance audit also needs to be improved so that it is expected to improve the performance of state financial management and accountability.