EVALUATION MANAGEMENT ASSET IN BPN

(BADAN PERTANAHAN NASIONAL) BASE ON AUDIT

REPORT BPK 2007

Theme :
“a key component of asset management asset is take a strategic view of which assets are best
retained and efficiently exploited, as well as to identify those which should be disposed of to
generate resources for reinvestment” (Sir Michael lyons, quoted in “Toward Better
Management of Public Assets”. 2004)

RUDY ISKANDAR (23)

SEMESTER IX-B
Sekolah Tinggi Akuntansi Negara
2008

INTRODUCTION
As we know since reformation in public finance affected all aspect that connect with public
finance. Also we know there is fundamental changing in management public finance, old
practice that used is administration and new practice is management, so it is a difficult
challenge to reset mind set from administration to be good manager.
Government asset management is not escaped from this changing. Every step of management
public asset feels new spirit changing this reform. If look about definition management asset
in general view is a cycle of planning, acquisition, utilization, and disposing government
asset. In delivering public service government can’t be separated from asset, this is the main
purpose how asset management can help government as tool to delivering public service.
According to three package public finance act, mission that should be accomplished by
government asset management is how to get effective asset management, how to manage
asset efficiently, how to optimize asset management. To achieve that goal is not take few
time, as consideration Australia has implemented over the past 20 years (Olga Kanova and
James Kellar 2006). So if we get an conclusion asset management is one of key component of
public finance, it is need for an agencies to evaluate their arrangement in asset management
as whole as greater strategic in government asset management.
In my case reported is how asset management implemented in an agency especially BPN
(Badan Pertanahan Nasional). It is a real example how asset management implemented, and
according audit of state finance act, BPK is auditor to examine how state finance manage
running well including asset management. Why I choose this title of “Evaluation Asset
Management in Badan Pertanahan Nasional (BPN) base on Audit Report BPK 2007”
because of there is relationship about statement’s Sir Michael Lyons that mentioned a key of
asset management is how we evaluate asset should be retained, how exploited asset efficient
and the end is how dispose asset as well as two activity before. In this paper, writer try to give
his overview about audit report BPK without any valuation right or wrong about their report.
In next part of this paper will be explained in simple framework.

THEORY BACKGROUND
A. CONSEPTUAL THEORY

If we talk asset management, we must know what is definition asset management, review in
other country what factor that encourage this reform and what is important component that
should be oriented. Writer take some experience from Olga Kanova and James Kellar’s
Book about “Managing Government Property Asset”. Definition Government Asset
Management According them is the Process of Decision making and implementation relating
to the acquisition, use, and disposal of real property. Moreover task of public asset manager
is similar to private organization. There are some level that threat in asset management,
Level of task are, at one level manager decide how to manage individual property holding-to

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operate, market, and maintain. Two level, organization must seek and identify common rule
and motivate asset manager regarding economic efficiency and other value, further level how
to allocate capital asset in different classes of property for example we liquidate asset and
reinvest in another class asset. Finally organization try to raise new financial capital to
expand its investment by selling option or private partnership.
Beside that driver in government asset management (Olga Kanova and James Kellar, 2006)
is growing consider to development in public management. Implementation on reform in
asset management is as part of reform a whole public finance management. Factors drive
reform in asset management (Olga Kanova and James Kellar, 2006) such as :
• New Public Management, key element that influence is improved like efficiency and
cost-effectiveness, Decentralization, Separation function policy-making and service-
delivery, accountability and transparency.
• Recognition of financial payoff to better real asset management, it’s meant a
government, local government with limited sources can rethink how we design asset
management consider all feasible alternatives in order to deliver service to public.
This strategy is called “off balance sheet”, like lease or rent option.
• Accounting Reform have given lot influence in asset management. Accrual standard
and GAAP give clarity in how cost related and recognized, measurement in asset
value. This give information in asset policy-making.
• Entry of real professional into Public property Management, there is transfer “good
practices” from private sector to public sector.
Before reform and development in Asset Management there some problem that happen as
general issues in some country. This can be identified such as :
• Lack of a central policy framework, recently in two decade, there is intention to realize
how policy framework asset management can be one of ways to make clarity, simple,
and focus to what do we want.
• Fragmented management of public property asset, in order to give service to public needs
government have some agency, department, or entities. Asset management in each place
separated in independent management, so that it’s caused inefficient and effectiveness.
• Economic inefficiencies associated with public property, it’s consider opportunity losses
for public budget from high cost that cause maintenance cost and repair cost.
Management of asset need to prevent changing this condition with evaluation and
analysis tools.

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• Lack of information needed for managing property portfolios, it’s meant in asset
management should generate good, relevance and reliable information. Alternatives
evaluate considering this information. For example inventory data, market value is one
of kind information that should be consider and recognize if necessary in order to make
decision
• Lack of transparency and accountability, transaction happens that involved asset almost
in large number. Culture of fairness and healthy competition must be established with
clear procedure and good procurement.
Some problem according experience in most welfare country and development country are
unresolved. This problem is seek what the best practice should be implement. They are first,
relationship between accounting and asset management reform. Indicator of this problem is
how value asset, how shift to accrual base in asset management and how much importance
management policy attach accounting rule. This is indicated transition step that a country try
to implement what is the suitable one practice in accordance domestic condition. Second,
there many organization that involved in asset management. The problem is what responsible
and duty each organization. In public finance philosophy, authority of finance in this case
asset management should be balance or equal in other word “check and balance”.
Management in many organization should be arrange including who is responsible, user, and
owner of the asset.
In other reference according asset management primer of US department of transportation
that concern about asset management especially in transportation. This organization response
how we define asset management in good overview. Asset management is a systematic
process of maintaining, upgrading, and operating physical assets cost-effectively. It combines
engineering principles with sound business practices and economic theory and it provide
tools to facilitate a more organized, logical approach to decision making. Thus, asset
management provides a framework for handling both and long range planning. After we
recognize this definition, asset management is whole of strategic that related to kind
alternative, goal to be achieve, return on investment, efficiency, effectiveness, etc. In US
department of transportation, asset management in this case highway or transportation have
similarity factor why it’s important to manage asset such as system demand (need
development performance), personnel constraint (need quality management-professional
experience), increase budget demand (pressure from budget side-give optimize result) and
accountability to the public (push government more accountable and operate like private
sector).
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And if we catch the point of Sir Michael Lyons about “a key component of asset management
asset is take a strategic view of which assets are best retained and efficiently exploited, as
well as to identify those which should be disposed of to generate resources for reinvestment”
is began with the problem to make efficiency in securing £30 billion of asset sales and
achieving further efficiency savings. In foreword of his letter he give some main idea that is
all department and local authorities must produce comprehensive asset management plan and
these must be owned at board or executive level also have identified some priorities for early
scrutiny, to improve future asset management he suggest that in sharpening impact of
incentive which encourage identification and disposal of surplus asset and make co-
ordination and co-operation across department and local authorities to generate efficiency and
relocation surplus asset, finally he suggest that asset management need professional skills and
initiative like private investment.

B. LEGAL ASPECT
In this section writer try to give explanation how about in Indonesia. This is characteristic in
public finance especially in government asset management, we realize reform in asset
management can’t be separate with legal aspect. Existence of three package state finance
public act give clarity authority and framework. Writer take major point from treasury act
number 1 2004, government law number 6 2006 which revised by government law number
38 2008, and ministry of finance law number 96 2007, as follow :
• Give a fundamental of authority and responsibility among line ministry, agency, or other
kind entity. After that, these organization know about position, mission and vision in
government asset management as tool for delivering public service.
• Scope in public finance that isn’t about money but also asset, so that government asset
management should be one of the main function in each organization activity. Awareness
about important government asset should be accepted like organization run main function
in order delivering public service.

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• In implementation rule, have arranged what is boundary, duty and prohibitive in every
level entity. This is good rule framework that indicate if there is a government asset as
value in one rupiah should be record and report.
• Asset management is cycle concept that concern in the beginning until the end of the
process. The operational rule have accommodated alternative in asset management policy
such as in utilization asset, these accommodate rent, lease, cooperation and BTO/BOT
option. This is indicated asset management concern in reinvestment, how generate from
surplus asset, and contribute to economic condition (market).

CASE STUDY
In order to explain how implementation about government asset management, writer take
example an BPK audit report 2007 in BPN Office. As we know BPK is an independence
auditor that have mandate from audit state finance act and according to this report we take
some evidence as follow :
a. There is a weakness in internal control :
• In order to manage asset government for example bookeping and financial record still
in manual although we have establish SABMN application. Cause of the problem,
BPN can’t arrange balance sheet comprehensively that recognize to all office in BPN
structure.
• To operate government asset in BPN RI is handle by 7 persons as accounting unit
eselon I level also as accounting unit entity/satker level. And in vertical structure BPN
office human resource to handle this important task is so limited and computer skills
is absolutely important to operate SABMN application.
• Monitoring and controlling on asset management by internal auditor, direct chief
control still not maximal.

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b. Evidences are found in audit :
• There is Government Asset/BMN that not record in registration BMN report. Kind of
government asset such as vehicles, number of this asset is 1.050 items isn’t recorded.
• There is Procurement of asset that not appropriate with real value. So that
information reliable and relevance for example equipment and machine amount of Rp.
3.833.550.336,- and network installation as worth Rp. 476.333.000,- and other fixed
asset amount of 9.622.365.000,- isn’t recognize.
• Maintenance of BPN’s land with 200.274 meter square placed by illegal people, so
that it’s possible lost is this asset.
• Problem ownership in BPN medan. There is land owned by BPN medan as use right
but it’s claimed by other party, until now not yet solve between party.

EVALUATION
A. RECOMMENDATION
• Increase accountability, make socialization and informative training about asset
management report. As we know asset management affected by accrual accounting. In
Indonesia implementation accrual accounting not yet fully implemented, but policy to
implement accrual base have been mandate constitution and wait readiness of all part
entity. In other side SABMN (asset government application) that subset in SAP
(government accounting system) must apply to all of kind entity in order to manage
asset. Consistency and transfer knowledge is the vital problem about this case.
• Incentive and good monitoring
BPK report indicate there is weakness in internal organization. So in this case, internal
monitoring and internal compliment isn’t running well. Good solution for this
problem is give incentive and good monitoring, as recommended by Sir Michael lyon
in his paper. His opinion is incentive and efficiency management can give ensuring
managerial responsibility and flexibility in activity in asset management.
• Life-cost analysis as tool to generate reinvestment in asset management

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 To give good decision in asset management policy, we must develop an analysis tool
as like life-costing guide in Australia. This analysis give us information about what
capacity, capital cost, alternative product option and disposal option in the right time
to minimize decreasing value asset.
• Make implementation rule to create evaluate and gap analysis tools that generate good
performance in asset management
In current condition about asset management we don’t realize about an model or
system that can be recognize what resource that we have and what asset that important
to build. It’s can be done by gap analysis
B. CONCLUSION
• As we know in the beginning reform asset management have significant problem like
mentioned in early paper. If look case in Indonesian, our step still in phase I of asset
reform agenda. Asset management reform need a more time to develop approximately
about 15-20 years. Indonesia have made a fundamental framework and make some
adjustment what next should be done to get good practice in asset management.

• Process to achieve an best practice asset management need professional human

resource and good model and system. To encourage this effort system and model
should be support by good qualify human resource that understand the filosofi asset
management, cycle process and get three point of management asset (efficiency,
clearness, optimal). Qualification needs in this case is IT system, it’s important
because asset management spread in every entity across Indonesia so that this need a
good model and system to delivering good information.

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 REFERENCES
New South Wales

Olga Kanova and James Mc Kellar. Managing Government Property Assets-International

Experiences.Washington DC: The Urban Institute Press, 2006
Iwan Hindawan Dadi, et al. Manajemen Properti : Tinjauan atas RealProperti dan Aset
Publik. Jakarta: Badan Pendidikan dan Pelatihan Keuangan, 2006
Government Law Number 6 2006 which revised by Government Law Number 38 2008 about
Management State/Local State Property
Ministry of Finance Law Number 96 2007 about Implementation Manner of Using,
Utilization, Disposing, and Ownership Transfer government Asset
Indonesian Audit Agency (BPK RI). Audit Report BPK about Government Asset
Management in Badan Pertanahan Nasional (BPN) fiscal year 2005, 2006 and semester
I 2007
New South Wales (NSW) Government-Asset Management Committee. New South Wales
Government Total Asset Manual. August 2003
International Journal

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Sir Michael Lyons. Toward better Management of Public Sector Asset. United Kingdom
(UK): HM Treasury, 2004
US Department of Transportation. Asset Management Primer. USA: Federal Highway
Administration Office of Asset Management, 1999
Hatch Mott MacDonald. Asset and Utilities Management.
Australian National Audit Office (ANOA). Life-Cycle Costing. Canberra: 2001

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