While Indonesia had institutional arrangements for public sector audit since the 1940s, the legal, policy, and institutional frameworks had not significantly evolved to promote transparency and accountability. First, a weak legal framework exacerbated the lack of clarity between internal and external audit functions. Second, the allocation of resources had not always been in line with policy and legal mandates. Third, parliamentary oversight had been deficient. Fourth, public awareness of the benefits of audit had been very low; and fifth, the audit capacity had been weak.
Due to decentralization, the enormous transfer of resources necessitated strengthening of regional audit institutions to effectively fulfill their internal control and audit functions. The State Audit Reform Sector Development Program of the ADB was designed to support selected policy interventions, adjustment measures, and critical investments that may otherwise be hampered by resistance to change, or adversely affected by budgetary constraints.
This report validates the completionreport's assessment of the program which aims to enhance governance and the efficiency, economy, and effectiveness of the public sector audit in Indonesia through strengthened audit institutions operating to internationally-accepted standards. IED overall assessment: Less than successful