By Rifky Bagas Nugrahanto, Employee of the Directorate General of Taxes
Management in intended to produce various public services. Managements are like organ system of a human’s body. An organ system is a group of anatomical structures that work together to perform specific function or task. Therefore, the existence of management is very important.
Various management sciences place even greater emphasis on leaders who are capable to establish necessary processes to achieve the goals of the organization under their management both inside and outside the enterprise. The establishment and implementation of an appropriate controlling system is essential for this. The study focuses on the internal control system of the public finances’ subsystem of local governments consistently shows that the science of public administration view is present. By doing so, it does not deny but rather supports the interdisciplinary character of the science of public administration. We can only truly understand the role of the internal control in local governments if we are adequately able to define them (Benedek, Maria, 2014:1).
The aim of this current chapter is to identify the system (including the internal control concept) alongside which local governments carried out their audits. Internal controls, or more precisely the lack of or inadequate operation of these, resulted in such a level of cumulative risk by the mid ‘80s in the United States that in 1985 the most significant commentators on economic life, independent organisations and interest groups, founded an organisation called The Committee of Sponsoring Organizations ‒ COSO. In addition to those organisations representing the accounting profession in America and the organisation of internal auditors the committee also consist of active participants in, and representatives of, economic life (COSO, 2014).
That is why Indonesia also clons that methods from COSO to implement internal control as part of three line of defense. For tax authority, internal control helps management in each organisations level by monitoring the implementation of whole standard operating procedure in taxation. Moreover, government realize the urgency for supporting this part by issuing regulations, such as Government Regulation number 60 in 2008, Ministry of Finance Decree number KMK-31/KMK.09/2013 and Director General of Taxes Regulation Number PER-42/PJ/2012 as basis of implementations of internal control and technical guidelines. For Directorate General of Taxes itself, KEP-238/PJ/2012 was released as guideline to create internal monitoring unit.
Hence, we can agree that the goal of internal control is for keeping management in the right track and preventing the abuse of power, keep the delivery of public service within standard, and society will be satisfied of government’s service. Accordingly, it will make sense if there are punishment and reward for management who has passed the standard of internal control or still in below degree that we hope. It must be need a lot of efforts for passing that standard.
In addition, Indonesia has many corruption actions. Data from www.kpk.go.id, has showsn us that on December 30 in 2017, KPK (Corruption Eradication Commision) received around 6.000 whistleblowing reports. However, the number decreased from the year 2016 which was 7270 reports. It shows that government always concern with internal control every year.
In this year, Directorate General of Taxes has new goal about internal control. How to reach the attribute of free from corruption zone for all vertical units in DGT. This predicate is very meaningful, although in the actual, internal control is always implemented.
To obtain this predicate, there are certain efforts in each unit by developing of integrity zones in six areas:
- Change management;
- Governance Arrangement;
- Management of human resources Arrangement;
- Accountability Reinforcement;
- Supervision Improvement; and
- Public Service Quality Enhancement.
This is the answer of how to reach the goal that internal control is a solution about a misuse of management. We also believe, from year to year there must be innovation about internal control to make the government business process more reliable. (*)
*) The information and views set out in this article are those of the author and do not necessarily reflect the official opinion of the institution in which the author works.