Modernizing the Indonesian Government Financial Statement Approach

Abstract

The change in IT system modernization is a critical point in a development of a financial statement. E-recon is an application developed by the DG Treasury of Indonesia as a tool for compiling the financial statement of Ministries/Agencies. This application was first used to compile the financial statements in the first semester 2016. Data integrity can be addressed in a digital environment in a variety of ways, it is not just a technology-based effort but  this e-recon application simplifies the stages and consolidation process of financial statements. With this application, the General Ledger of the Entities data is uploaded to the e-recon database when the each units reconciles revenue and expenditure with the State General Treasurer. With this modern system we hope we will get the best reporting practice because we have spent a lot of money to build it up. We can see another countries which has used it such as the US government as the Federal agencies spent $1.5 billion annually on the operation, maintenance, and upgrades of numerous accounting systems across the federal government's various IT platforms thet means the outcome has to be appropriate with the money spent to make it. Evolution of the modern finacial statement system represents cultural transformation both within the audit organization (the Audit Board Agency) and the audited entity.

Perubahan dalam modernisasi sistem IT adalah titik kritis dalam pengembangan Laporan keuangan. E-recon adalah aplikasi yang dikembangkan oleh Ditjen Perbendaharaan Indonesia sebagai alat untuk menyusun laporan keuangan Kementerian / Lembaga. Aplikasi ini pertama kali digunakan untuk menyusun laporan keuangan pada semester pertama 2016. Integritas data dapat dikelola untuk bentuk digital dalam berbagai cara, bukan hanya upaya berbasis teknologi tetapi aplikasi E-recon ini menyederhanakan tahapan dan proses konsolidasi laporan keuangan. Dengan aplikasi ini, data buku besar untuk setiap Entitas diunggah ke database e-rekon ketika masing-masing Satuan Kerja merekonsiliasi pendapatan dan pengeluaran dengan Bendahara Umum Negara. Dengan sistem modern ini kita berharap akan mendapatkan praktik pelaporan terbaik karena kita sudah membelanjakan banyak uang untuk membangunnya. Kita dapat melihat negara lain yang telah menggunakannya seperti halnya pemerintah AS yaitu the Federal Agency telah menghabiskan $ 1,5 miliar setiap tahun untuk operasi, pemeliharaan, dan peningkatan berbagai sistem akuntansi di berbagai platform IT pada pemerintah federal yang artinya outcome yang diharapkan haruslah sesuai dengan biaya yang telah dikeluarkan. Evolusi sistem laporan keuangan modern mewakili transformasi budaya baik di dalam organisasi auditor (Badan Pemeriksa Keuangan) dan entitas yang diaudit (Kementerian/Lembaga)

Introduction

Law of the republic of indonesia number 17 of 2003 states that in the implementation of fiscal, the Minister of Finance is obliged to make financial statements prepared based on Government Accounting Standards (SAP). Furthermore, to compile the financial statements, the Minister of Finance establishes accounting policies and systems. The accounting system established by the Minister of Finance to compile a central government financial report is known as the Central Government Accounting System (SAPP). The accounting system was first developed starting in 1994 and has undergone several changes 

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Initially the process of preparing financial statements was made by the Ministry of Finance on the purposes of accountability for the implementation of ministry / agency budgets. In line with the reform in the financial sector which is marked by the issuance of the Law package in the field of state finances, the process of preparing financial statements previously carried out by the Ministry of Finance and then is the responsibility of each ministry / institution.

The number of accounting entities in the Central Government is approximately 24 thousand. With this large number of entities the government builds a financial reporting system to consolidate the financial statements of all entities. Initially, the consolidation process was carried out in stages starting from the Work Unit level to the Ministry / Institution level. Starting in 2016 the consolidation process is no longer done in stages but using the e-rekon application.

Discussion

For the first time the government of Indonesia has Government Accounting Standards (SAP), which is stipulated by Government Regulation number 24 of 2005. In accordance with SAP, starting from Fiscal Year 2005, the government compiled financial statements that refer to Government Accounting Standards which is cash basis and cash toward acrual

In accordance with the regulation, the minister or agency leader is a budget user who have an obligation to prepare financial statements. The ministry / agency prepares the financial report by consolidating the financial statements in their work units into a State Ministry / Institution Financial statement (LKKL).

Furthermore, the State Ministry / Institutional Financial statement is sent to the Minister of Finance to be consolidated into the Central Government Financial Report (LKPP).

The next year (2015-2016) the accounting basis used in the preparation of financial statements then uses the accrual basis. In the 2016, the process of preparing the report by the Ministry / Institution is carried out using the e-rekon application. This application is a combination of two activities, that is revenue and expenditure reconciliation activities and general ledger data compilation for the purposes of preparing financial statements.

With this application, the General Ledger of entities is uploaded to the e-rekon database when the entities reconcile their revenue and expenditure with the State General Treasurer

There are some benefits of using the e-rekon application, the first one is to speed up the consolidation process of financial statements. The use of e-rekon application does not require a consolidated financial statement process from the level of entities to ministries / institutions. The entities simply uploads ledger data into the e-rekon (big data) database. The stored data can be directly used to compile financial statements. Then, the regional level accounting unit, echelon I level and ministry / agency level can directly print reports based on data stored in e-rekon.

Secondly, reduce the cost of preparing financial statements. The consolidation process that has been carried out in stages is no longer carried out on the use of e-rekon applications so that the government can save the cost of preparing financial statements

Thirdly, reduce spending on goods. The use of one e-rekon data in preparing the report will reduce the use of paper in the preparation of reports (paperless). The consolidated level accounting unit does not need to request a hardcopy report from the consolidated accounting unit, because the unit can print reports from the same source (e-rekon data).

Fourthly, flexibility in preparing financial statements. With the use of the e-rekon application, the process of uploading ledger data can be done anytime and anywhere. This makes the business processes carried out by the government can be more efficient.

Lastly, presents reliable financial statements. The financial reports generated from the e-rekon application come from data stored in the same database, namely e-rekon data.

Eventhough there are many benefits of modernizing the audit approach for both the auditors and audited organizations. However, obtaining data in a format necessary to take advantage of a digital auditing approach may be a significant challenge for some government organizations. One of the most common barriers involves capturing data from different systems, whether different accounting system modules, subsidiary ledgers or "cuff" systems, or different accounting systems used by agency components. System incompatibility may make it difficult for auditors to evaluate data in a meaningful way from these separate systems alongside data from the agency's core financial management system

Conclusion

By using the E-recon system, the Reporting Entities, report reviewers and auditors will see the same data. Therefore, the reliability of government financial statements can be believed.
In the process, there are things that need to be considered in the use of e-rekon application, namely the problem of data security, especially related to the possibility of other parties who will use the data for certain purposes that harm the government. Therefore, safeguarding financial report data needs to be the government's attention.

In addition there are some key steps to support the successfulness of this sytem such as: Encourage organizations to implement a data standardization framework Action, Evaluate data security and information protection risks Action, Invest in your auditors Digital auditing will require an audit community with a broader base of knowledge and insight.

Referrence

1. Undang Undang Nomor 17 Tahun 2003 tentang Keuangan Negara (Lembaran Negara Republik Indonesia Tahun 2003 Nomor 47, Tambahan Lembaran Negara Republik Indonesia Nomor 4286);
2. Undang Undang Nomor 1 Tahun 2004 tentang Perbendaharaan Negara (Lembaran Negara Republik Indonesia Tahun 2004 Nomor 5, Tambahan Lembaran Negara Republik Indonesia Nomor 4355);
3. Undang Undang Nomor 15 Tahun 2004 tentang Pemeriksaan Pengelolaan dan Tanggung Jawab Keuangan Negara (Lembaran Negara Republik Indonesia Tahun 2004 Nomor 66, Tambahan Lembaran Negara Republik Indonesia Nomor 4400);
4. Peraturan Menteri Keuangan Nomor 184/PMK.01/2010 tentang Organisasi dan Tata Kerja Departemen Keuangan ;
5. Peraturan Menteri Keuangan Nomor 169/PMK.01/2012 tentang Instansi Vertikal Direktorat Jenderal Perbendaharaan;
6. Peraturan Menteri Keuangan Nomor 190/PMK.05/2012 tentang Tata Cara Pembayaran Dalam Rangka Pelaksanaan Anggaran Pendapatan dan Belanja Negara

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