SAI Indonesia’s Pathway to Safeguarding Independence

Authors: R. Yudi Ramdan Budiman, Teguh Widodo, and Sherlita Nurosidah, SAI Indonesia

The independence of Supreme Audit Institutions (SAIs) has long been recognized as a fundamental principle for ensuring the credibility and effectiveness of public sector auditing. Since the adoption of the Lima Declaration in 1977, the global consensus has been clear mentioning SAIs cannot fulfill their oversight mandate effectively without a high degree of independence, both formally guaranteed and practically exercised. Independence serves not only a technical function but also carries normative significance, as it underpins the accountability of governments to citizens and contributes to the broader goal of strengthening institutions as articulated in the United Nations Sustainable Development Goals, particularly Goal 16 on peace, justice, and strong institutions.

In conceptual terms, independence is multidimensional. It is often distinguished between de jure independence, which is embedded in constitutions and statutory frameworks, and de facto independence, which concerns the actual ability of SAIs to operate without interference in practice. While de jure independence provides legitimacy, it is insufficient unless matched by de facto independence that enables institutions to act autonomously and enforce their findings. The Audit Board of the Republic of Indonesia (SAI Indonesia or BPK) offers an illustrative case of how these two aspects interact. Although BPK’s independence is enshrined in the Indonesian Constitution and subsequent legislation, the Board has had to continuously consolidate and defend its independence in practice through institutional reforms, engagement with stakeholders, and strategic allocation of resources.

Frameworks developed by international organizations provide useful benchmarks for examining SAI independence. The INTOSAI Mexico Declaration outlines eight principles, including a broad audit mandate, unrestricted access to information, and freedom in reporting, while the World Bank’s InSAI indicators identify ten measurable dimensions of independence. These frameworks emphasize that independence is not a static or one-time achievement but rather a dynamic process that must be safeguarded and adapted to changing circumstances. Within this context, BPK’s experience can be understood across four interrelated dimensions, namely operational autonomy, financial autonomy, staffing autonomy, and mechanisms for ensuring the effective follow-up of audit recommendations. Further details on the ten InSAI indicators of BPK’s independence are available at https://bpk.id/appendix-BPK-Independence.

Operational autonomy forms the foundation of independence. In Indonesia, this autonomy is not only guaranteed by the Constitution but also elaborated in statutory law, particularly the State Audit Law of 2004 and the BPK Law of 2006. These laws establish BPK’s authorities and affirm its equal standing with other high state institutions, ensuring that it cannot be subordinated to the executive. Yet, operational autonomy must be translated into practice. BPK has undertaken significant organizational reforms, including revising the internal distribution of duties among Board members and establishing new directorates and regional offices to address emerging administrative and territorial needs. In a country of more than seventeen thousand islands, where auditors must adapt to diverse local conditions, these reforms have strengthened BPK’s independence by deepening its contextual understanding (Nurosidah, 2024). Furthermore, BPK has also issued internal regulations that operationalize its mandate, ranging from auditing standards and codes of ethics to detailed procedures for investigative audits and for calculating state losses. These instruments enhance professionalism, consistency, and credibility in audit practices. 

Equally important, operational independence is not exercised in isolation but in constant interaction with external stakeholders. BPK collaborates with Parliament, law enforcement agencies, professional organizations, and civil society to ensure that its findings are both legitimate and actionable. For instance, its engagement with Parliament strengthens the political authority behind audit reports, while cooperation with law enforcement agencies supports the enforcement of findings related to fraud or corruption. By cultivating networks of support, BPK not only defends its independence against potential interference but also ensures that its work translates into real accountability outcomes.

The second dimension is financial autonomy, which is critical because without adequate resources, independence risks being purely symbolic. Indonesian legislation requires that BPK’s budget be included as a separate line in the state budget. However, in practice, budget submission and approval initially involved intermediary ministries, creating the potential for executive influence. Reforms have gradually reduced this vulnerability by allowing BPK to submit its budget directly to Parliament, with subsequent discussions involving the Ministry of Finance only for technical matters. This adjustment has strengthened institutional independence and yielded tangible outcomes, most notably a 25 percent budget increase in 2025 compared to 2024. With greater resources, BPK has been able to expand its infrastructure, invest in modern auditing technologies, and improve remuneration, all of which reinforce its institutional resilience.

Financial autonomy is not solely about securing adequate funding yet it also concerns how funds are managed. BPK has demonstrated prudent financial governance, ensuring that resources are aligned with strategic priorities and that expenditures are transparent. By managing its budget responsibly, BPK reinforces its credibility in demanding accountability from other institutions. Financial independence, therefore, is both a precondition for and a reflection of institutional integrity.

The third dimension, staffing autonomy, is particularly significant in ensuring the quality of audit work. Human resources are the pillar of institutional capacity, and the ability to recruit, develop, and retain qualified staff is indispensable for maintaining independence. In Indonesia, the recruitment of civil servants is centrally managed by the Ministry of State Apparatus and the National Civil Service Agency, but BPK actively participates in the process by defining its staffing needs, conducting interviews, and ensuring candidates meet professional standards, thus allowing BPK’s institutional capacity to be strengthened significantly.

Beyond civil service recruitment, BPK possesses the authority to engage external auditors and experts, giving it flexibility in addressing specialized or technical audit requirements. The presence of a dedicated training and education center further reinforces internal capacity by offering continuous professional development programs. Moreover, BPK has successfully advocated for differentiated allowances for its employees, recognizing the unique demands of audit work and safeguarding professional integrity by aligning compensation with responsibility. Together, these measures ensure that staffing autonomy is not undermined by broader bureaucratic constraints and that the institution can maintain a high level of technical competence.

The fourth dimension concerns the effectiveness of follow-up mechanisms for audit recommendations. Independence does not end with the issuance of reports. It must also be reflected in whether recommendations are acted upon. BPK has established clear procedures requiring auditees to respond to recommendations within 60 days. These responses are reviewed and verified. To enhance efficiency and accountability, BPK has introduced an integrated information technology system that tracks follow-up actions from time to time. This innovation not only increases transparency but also ensures that audit findings translate into tangible improvements in governance. The system has also enabled BPK to generate data on compliance rates, which in turn strengthens oversight by Parliament and fosters greater accountability among auditees.

The Indonesian experience yields several broader lessons for the study and practice of SAI independence. First, constitutional and statutory guarantees are essential but insufficient on their own. Independence must be continuously exercised and reinforced through daily practices, institutional reforms, and strategic engagement. Second, independence requires adequate resources. Without sufficient financial and human capital, even the most formally independent institution risks ineffectiveness. Third, stakeholder engagement is crucial. Independence does not imply isolation but rather, SAIs must cultivate constructive relationships with other institutions, thereby increasing legitimacy and facilitating the enforcement of findings. Fourth, technological innovation plays a growing role in safeguarding independence by improving transparency, efficiency, and accountability in audit processes. Finally, independence should be understood as a process rather than a destination. It requires constant vigilance, adaptation, and reinforcement in the face of evolving political, institutional, and social dynamics.

Conclusion

Nearly five decades after the Lima Declaration, the principle of SAI independence remains fundamental to effective governance. The experience of BPK demonstrates that while constitutional guarantees provide a solid foundation, the practical realization of independence requires strategic reforms across multiple dimensions. Through efforts in operational autonomy, financial arrangements, staffing policies, and follow-up mechanisms, BPK has successfully consolidated both de jure and de facto independence. These reforms have not only enhanced its domestic credibility but also contributed to the global objective of strengthening institutions under Sustainable Development Goal 16. Independence, as shown in this case, is both a legal principle and a lived institutional practice that must be continuously safeguarded to maintain accountability, transparency, and integrity in public financial management.

References

• INTOSAI. (1977). The Lima Declaration of Guidelines on Auditing Precepts. International Organization of Supreme Audit Institutions.
• INTOSAI. (2007). Mexico Declaration on SAI Independence (INTOSAI-P 10). International Organization of Supreme Audit Institutions.
• Nurosidah, Sherlita. (2024). Unveiling Challenges: Auditing Small Islands in the Indonesian Archipelago. International Journal of Government Auditing.
• Republic of Indonesia. (2004). Law No. 15 of 2004 on State Audit.
• Republic of Indonesia. (2006). Law No. 15 of 2006 on the Audit Board of the Republic of Indonesia.
• United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development. Resolution adopted by the UN General Assembly, A/RES/70/1.
• World Bank. (2021). Supreme Audit Institutions Independence Index (InSAI): Global SAI Independence Report. Washington, DC: World Bank.