Strategic Planning in State Financial Audits: Bahrullah - Akbar@bpk - Go.id
Strategic Planning in State Financial Audits: Bahrullah - Akbar@bpk - Go.id
Strategic Planning in State Financial Audits: Bahrullah - Akbar@bpk - Go.id
Achmad Djazuli Bahrullah Akbar Galih Kurniawan Sidik. Strategic Planning In State
Financial Audits-- Palarch’s Journal Of Archaeology Of Egypt/Egyptology 17(4), 674-683.
ISSN 1567-214x
Key Word: State Finance, Strategic Management, Audit, Input Process Output Approach
ABSTRACT
This paper aims to determine the Indonesia Supreme Audit Institution (BPK) strategic planning
process which is authorized to carry out audits of governance and state financial responsibility.
Through input process output approach, this paper also introduces a strategic thinking framework
in strategic audit planning design. The input consists of the basic values of the BPK and the
relationship model for management, organization and administration. NPG, SWOT and audit
standards compliance are the process approaches used. The resulting output is a quality audit or
good strategic planning which ultimately results in the achievement of the accountability
organization maturity model and the impact on the achievement of the goals of the state.
INTRODUCTION
Background
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Each country all around the world also has its own objectives. Likewise, Indonesia
has also the objectives of a state are set forth in the Preamble to the Constitution
(UUD 1945), which consists of:
1. protect the entire Indonesian nation and all Indonesian bloodshed;
2. promote the general welfare;
3. to educate the nation's life, and
4. participate in implementing world order based on freedom, eternal peace
and social justice
To achieve this goal of a state, every government institution needs to carry out its
respective duties and roles. BPK needs to take a role in accordance with its authority
to carry out audits of governance and accountability of state finances in accordance
with Law Number 15 of 2004 concerning Audit of State Financial Management
and Accountability. To optimize the role of the BPK, one of which is that the BPK
must have a good strategic audit plan.
In the global achievement, the BPK must achieve maturity in accountability model
which developed by INTOSAI. The model consists of six layer (1) combating
corruption; (2) enhancing transparency; (3) assuring accountability; (4) enhancing
economy, efficiency, ethics, equity, and effectiveness; (5) increasing insight; and
(6) facilitating foresight.
First to fourth levels is the implementation of the oversight function of BPK, the
fifth level of insight and the sixth level of the foresight function. The complete
accountability organization maturity model can be seen in figure 1:
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Problem
As an institution that has the authority to carry out management audits and
accountability for state finances, BPK must have good business and management
processes, including the BPK must formulate and determine strategic planning that
can be used to support the achievement of state goals and BPK itself. The problem
formulation of this paper is how the process of formulating strategic audit planning
for state finance.
THEORY
State Finance
State finance is an inseparable part of public finance or some even argue that state
finance is equal to public finance. This view is based on the theory of public finance
that has been developed by Musgrave4 (1959) which defines public finance as a
science that studies government economic activities. This is reinforced by the
opinion of Plehn5 (1929) which states that public finance is the study of the use of
government funds to meet government payment needs. From these two opinions, it
can be seen that there is a closeness between public finances and government
activities, which are the main managers of state finances. Arsjad 6 (1992) argues that
the identification of the public sector with the government comes from Anglo
Saxon. This can be traced back to existing libraries in the Anglo Saxon country.
4 Musgrave, Richard A., Theory of Public Finance., 1959., New York McGraw Hill., p.7
5 Plehn, Carl C., Introduction of Public Finance., 1929
6 Arsjad, Nurdjaman., Keuangan Negara., 1992., Intermedia
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money, as well as everything in the form of money or goods that can be used as
state property in connection with the implementation of these rights and
obligations. From this understanding it is explicitly clear that the scope of state
finance is very broad because it does not only concern cash but also includes goods
that can be valued for money.
Article 1 number 8 BPK Regulation Number 4 of 2018 concerning the BPK Code
of Ethics defines basic values as moral crystallization inherent in every member of
the BPK and auditors and becomes the benchmark and ideal ideals in implementing
audit. BPK has three basic values which consist of independence, integrity and
professionalism (IIP). Independence is an attitude and action in carrying out an
audit to be impartial to anyone and not to be influenced by anyone. Integrity is a
quality, character or condition that shows complete unity, honesty, hard work and
adequate competence. Professionalism is the ability, expertise and commitment of
the profession in carrying out tasks.
7 Coase, R.H., The Nature of The Firm., 1937., Economica, New Series, Vol. 4 No. 16, (Nov. 1937)., pp 386 - 405
8 Arif, Mirrian Sjofjan., Hubungan Antara Administrasi, Organisasi dan Manajemen., 1990., Modul 1
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Paragraph (1) Article 33 of Law Number 15 of 2006 concerning the Supreme Audit
Institution states that "to ensure the quality of audits of state financial management
and accountability conducted by BPK in accordance with standards, the BPK
quality control system is reviewed by other Countries Supreme Audit Agency that
are members of INTOSAI”. ISSAI is an international standard that is used as a
guideline for SAI in the world such as the BPK. ISSAI is officially authorized by
INTOSAI. The ISSAI Framework consists of the official INTOSAI principles,
standards and guidelines. It is organized into four levels and INTOSAI GOV.,
Which consists of:
1. Founding Principles - organized into one document: base on Lima
Declarations.
2. Prerequisites for the proper functioning of the SAI. The basic prerequisites
for the proper functioning and professional conduct of the SAI.
3. Fundamental auditing principles - contains the basic principles for
conducting an audit of public entities
4. Audit guidelines - translating the basic principles of auditing into more
specific, detailed and operational guidelines that can be used on a daily basis for
audit tasks.
According to Milkovich in Youndt 9 et. al. (1996) strategic is something that has an
impact or influence on a specific goal in the long term period. Kerzner 10 (2002)
defines strategic planning as a management tool used to manage current conditions
in order to project future conditions, so that strategic plans are a guide for
organizations to achieve goals in the next five to ten years.
9 Youndt, Mark A., Snell, Scott A., Dean, James W., Levak, David P., Human Resource Management Manufacturing
Strategy and Firm Performance., 1996., Academy and Management Journal 1996 Vol. 39 836-866
10 Krzner, Harold., Strategic Planningfor Project Management Using a Project Management Maturity Model., 2002.,
Wiley
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SWOT analysis is applied by analyzing and classifying various things that affect
the four factors, then describing them in a SWOT matrix image, where the
application is how strengths are able to take advantage of existing opportunities and
overcome weaknesses that reduce the potential advantages of the existing
opportunities. Then how the strengths are able to deal with existing threats and
overcome the weaknesses that can make threats become real or create a new threat.
11https://www.mindtools.com/pages/article/newSTR_91.htm
12Rhodes, R. A. W., The New Governance: Governing without Government'., 1996., Political Studies (1996), XLIV, 652-
667., p.653
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In order to achieve the goals of the state as stipulated in the Preamble to the 1945
Constitution, a national development planning system is formally set out in Law
Number 25 of 2004 Concerning the National Development Planning System. In the
national development planning system, strategic plans are outlined in a long-term
development plan (RPJP) with a period of twenty years and a medium-term
development plan (RPJM). The RPJP and RPJM are also stipulated by each region
at the Provinces, Regencies, Cities and Villages level. The national development
planning system is aimed at:
1. Supporting coordination among development actors;
2. Guaranteeing the creation of integration, synchronization and synergy
between regions, spaces, time, government functions and between the Central and
Regional Governments;
3. Ensuring linkages and consistency between planning, budgeting,
implementation and supervision;
4. Optimizing community participation; and
5. Ensuring the achievement of efficiently, effectively, equitably and
sustainably use of resources
Sustainable development goals (SDG) are a set of development programs and
targets for and by all UN member states, including Indonesia. The SDGs are valid
from 2016 to 2030. The SDGs is the next step of Millennium Development Goals
(MDGs), which ended in 2015. The SDGs contain 17 goals with 169 measurable
13 Runya, Xu., Qigui, Sun., Wei, Si., The Third Wave of Public Administration: New Public Governance., Canadian
Social Science Vol. 11 No. 7 2015., p.11
14 Bovaird, Tony., Loeffler, Elke., Public Management and Governance., Second Edition., 2003., Routledge
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METHODOLOGY
Qualitative descriptive research method is used in this research. By describing,
exploring and analyzing theories concerning strategic planning and auditing of the
state finance, this research is expected to generate a strategic planning model in
auditing state finance.
INTOSAI15 (2009) issued guidelines for strategic planning for SAIs who are
members of INTOSAI. The purpose of issuing these guidelines is for the SAI to
formulate strategic planning in easy steps. According to INTOSAI, strategic
planning is the first step in the strategic development of SAI.
Strategic development or capacity building is the development of the core
capabilities of the SAI in optimal use of its resources and the implementation of
more effective inspection tasks in order to produce the expected results. Initiatives
for strategic development can come in various forms, such as changes in legislation,
15INTOSAI DEVELOPMENT INITIATIVE (IDI)., Strategic Planning A Handbookfor Supreme Audit Institution.,
2009
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Strategic thinking framework in state finance audit uses input process output (IPO)
approach. Input consist of individual and organizational elements. Individual
elements are the BPK's basic values (independent, integrity and professionalism).
Organizational elements which are built on the basis model of management,
organization and administration relationships. The two input elements are
processed using the NPG approach and are expected to produce useful and quality
audit outputs as stated in BPK vision and mission. Outcome of this process is
achieving the accountability organization maturity model. Finally, the impact is
successful of achievement of the goals of the state. The complete IPO approach
developed by Akbar can be seen in the following figure 3:
Relation of Management,
Organizaition and
Administration
(Organizational Elements)
Phase
The basic value of the BPK is the initial capital from the use of BPK inputs, the
basic value is expected to be maintained by individuals within the BPK and become
the BPK code of ethics. If there is an individual BPK action that violates the basic
values, the BPK Code of Ethics Council (MKKE), which is mandated to maintain
the BPK's basic value, can take action to enforce the code of conduct in accordance
with the Supreme Audit Agency Regulation Number 5 of 2018 concerning the
Honorary Council for the Code of Ethics for the Supreme Audit Agency.
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The resulting output is a quality and useful audit. Output also can be in the form of
good strategic planning from the BPK because it follows the guidelines issued by
INTOSAI. A good output will result in an effective outcome in achieving an
accountability organization maturity model which also has an impact on the
achievement of the goals of the state.
CONCLUSION
Strategic planning is very important tools in organizations including SAI. Strategic
planning is expected to become a guideline for achieving organizational goals in
the long and medium term that are in line with the goals of the state. The steps for
preparing strategic planning start with the identification of the strategic
environment and strategic thinking framework and guidelines for strategic planning
design.
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Manajemen., 1990., Modul 1
Arsjad, Nurdjaman., Keuangan Negara., 1992., Intermedia
Bovaird, Tony., Loeffler, Elke., Public Management and Governance., Second
Edition., 2003., Routledge
Coase, R.H., The Nature of The Firm., 1937., Economica, New Series, Vol. 4 No.
16, (Nov. 1937)., pp 386 -405
https://www.mindtools.com/pages/article/newSTR_91.htm
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Krzner, Harold., Strategic Planning for Project Management Using a Project
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Musgrave, Richard A., Theory ofPublic Finance., 1959., New York McGraw Hill.,
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Rhodes, R. A. W., The New Governance: Governing without Government'., 1996.,
Political Studies (1996), XLIV, 652-667., p.653
Runya, Xu., Qigui, Sun., Wei, Si., The Third Wave of Public Administration: New
Public Governance., Canadian Social Science Vol. 11 No. 7 2015., hal 11
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Youndt, Mark A., Snell, Scott A., Dean, James W., Levak, David P., Human
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683