Muhammmad Meirizky Ikhsan, S.E., M.P.A.,
(Pelaksana Kantor Pelayanan Kekayaan Negara dan Lelang
Palembang, Direktorat Jenderal Kekayaan Negara, Kementerian Keuangan RI, 2020)
meirizky@kemenkeu.go.id
A. Introduction
The last feature of the Financial
Report of Central Government (LKPP) stated that Indonesia’s fixed assets were
amounted to IDR 1,931 trillion or 28% of total assets (BPK 2018a). Those amounts
do not include value of revaluation program commencing in 2017 – 2018 with the
potential increase to IDR 5,728 trillion which was more than 200% increase from
its initial value (BPK 2018b). Nevertheless, The Financial Audit Agency (BPK)
could not accept the fair value generated by revaluation program due to the
several issues.
According to BPK’s audit report on
the program, the problems can be divided into two responsibilities, which were assets
inventory on Asset Users (K/L) side and valuation on the Assets Manager,
Directorate General of State Assets Management (DJKN). As the recent
revaluation program uses the new method of Desktop Valuation (measuring fair
value without field checking), the quality of assets inventory conducted by Assets
Users was closely related to the quality of fair value produced. It becomes an
issue because such program was not the first attempt in measuring fair value of
Indonesia’s state-owned assets.
It was firstly commenced in 2007 –
2010 namely Inventory and Valuation (IP) program, then about ten years later
the second IP (revaluation) program were conducted. Nevertheless, the 2017 –
2018 revaluation program has revealed vast number of unrecorded assets, which
are then recorded as excessive assets, as well as missing assets. Generally,
the BPK’s findings affirmed that the recorded assets were not in accordance
with the factual conditions including specification, quality and quantity.
Although policy instruments have been issued by DJKN to bond Asset Users’
concerning assets management responsibilities, it shows that the assets inventory
on the Assets Users is still problematic. The following table shows the amount
of unrecorded and missing assets resulted from the revaluation program.
The low quality assets inventory will
not only affect the revaluation program, but further assets management process
and the audit opinion on LKPP. Beside its negative effects on public
accountability, the absence of good assets inventory system will limit options
for assets optimization. Consequently, the DJKN’s vision of Revenue Center as
well as Distinguished Assets Manager will be a long and windy road. This paper
will assess the characteristics of wicked problem that might be attached with
assets inventory problems. Then improved assets’ database and continuous
communication about assets management issues are proposed actions that need to
be considered to address wicked problem in assets management field.
To
have a focused discussion in achieving the objectives, this paper assumes that
state-owned assets consist of land, building, road, bridge, and water building.
1. Defining
Wicked Problem
Wicked problem is different from the
common policy problem which can be solved by relatively simple policy planning as
wicked problem is featured by complexity, uncertainty, and divergence of
problem (Head 2008, p. 103). Meanwhile, Newman and Head (2017, p. 41) suggested that the wicked
problem is not simply defined as “problems
that are complicated or difficult to solve”, but they mentioned factors that
cause the wickedness which “impede problem definition, hinder stakeholder
agreement, interfere with the selection of appropriate approaches or solutions,
and create unbounded and unmanageable negative externalities”. Therefore, if policy
makers find difficulties to mention the entire possible root causes of a policy
issue and the existence of uncontrollable approaches-consequences, it is one
indication that they are facing a wicked problem.
2. The
Consequences of wicked
problem
In public policy, improper approach
in addressing certain policy issues will create another policy problem/s. For
instance, the recent revaluation program has unintentionally slowed the public
services delivery of DJKN, especially in process of assets management approval.
On the other hand, if the BPK’s findings of the revaluation program are not
corrected, it will deteriorate public trust on the government. However, in the
end of 2019, BPK seems ‘softened’ by DJKN’s solid efforts in making significant
improvement so that revaluation result could be included in the Financial
Report of Central Government year 2019.
This shows that policy planning is
critical to minimize the drawbacks of policy implementation. As the relatively
easy policy problems could be responded with the rigorous identifications of
possible approaches in particular situations, wicked problems involve complex
process both in identifying policy problems and finding alternative solution to
resolve the problems. Many researches put climate change and poverty as real
example of wicked problem. Thus, reducing poverty level can be a multi-complex
discussion among policy makers due to various attributes around the issues and
the solutions may generate biased outcomes. It is similar with the policy on
addressing climate change, as nature cannot be predicted and so many actors
that need to be involved together to dicuss it with uncertainty of results of
the chosen alternatives. As for wicked problems, it seems that there is no clear
solution in both identifying and addressing the problems.
In the topic of assets inventory,
responsibility of inventorization is on the Assets Users. However, the
consequences of lack of due diligence of that responsibility will affect not
only the Assets Users but also the Assets Manager as the information given
around that assets reports are not valid. Moreover, regulatory body does not
have full capability to insist Assets Users to comply with the regulations.
Different values and organizational structures, lack of public officials’
concern and understanding, and limited internal control are some of many other
complex possible causes of stagnant assets inventory quality within the Assets Users.
Those factors have not considered some possible issues on the Asset Managers.
In wicked problems, everything seems related and multi-complex.
C. Discussion
1. Is
asset inventory that wicked so
then it could be called wicked problem?
During the New Order regime, Indonesian government was entering the
period of assets administration when assets inventory was conducted manually
(Hadiyanto 2009). Meanwhile, the state assets reforms have been started since
2006 noted with the establishment of Directorate General of State Assets (DJKN).
Around a year later, Indonesian government pioneered the State-owned Assets Inventory
and Valuation (IP) program which claimed the first fixed assets account with
the amount of IDR 410 trillion (BPK 2010). Then, in 2017 – 2018, government
rolled the second phase of State-owned Assets Inventory and Valuation (Revaluation)
program. Albeit DJKN has made efforts to mitigate risks of the program, the
result of BPK’s audit showed that the efforts have not been approved as
effective. One of the BPK’s findings (2018c) claimed that the incomplete
information and invalid data from assets inventory has caused inaccurate result
of revaluation program.
Responding to BPK’s recommendation on
assets inventory issues, Ministry of Finance through DJKN exerts the Asset Users
to comprehensively improve their assets inventory. Accordingly, in 2019, assets
which were included in BPK’s findings and have significant value, were
reinvented and revalued. However, it can be argued that such actions engaged only
to respond on the BPK’s recommendation but did not constructively identify and
address the root causes of lack assets inventory quality in the Assets Users.
It is fully understood that the limited time given has put government came up
into the most priority issues which is responding to BPK’s suggestions so that
all the released revaluation 2017 – 2018 efforts were not wasted. However,
government needs to consider how the assets inventory issues are going to be
resolved comprehensively.
The assets inventory plays
significant role in assets life cycle. As In the Government Law Number 27 of 2014,
it is categorized under the assets administration phase along with assets
recording and reporting. Realizing the critical role of this phase, Ministry of
Finance through the Minister of Finance Regulation Number 244/PMK.06/2012
emphasizes more the obligation of Asset Users related to assets administration,
including assets inventory. This regulation has begun to include the role of Government
Internal Supervisory Apparatus (APIP) to ensure that the assets inventory obligation is
carried out according to the applicable regulations. To strengthen this phase,
government issued Minister of Finance Regulation Number 181/PMK.06/2016 that
provides technical guidance of assets inventory. It also introduced new level of punishment for
those who do not comply. This series of regulations implies that DJKN, as
policy maker of state-owned assets, has taken into account the significance of
assets inventory in
asset management. Nevertheless, the recent audit’s findings have unveiled that Asset
Users are not implemented the regulations adequately.
The fact that policies on
assets inventory are
unable to solely assist government to have a quality revaluation program is one
indication of the uncertainty of policy outcomes. Rittel and Webber (1973)
mentioned that “decision making under deep uncertainty is a particular type of
wicked problem”. On the other hand, based on Law Number 1 of 2004,
responsibility of assets inventory is on the Assets Users which are
ministries/agencies. However, in the audit reports on LKPP (2009 – 2018), BPK
declared that ministries/agencies’ internal control system on inventories and
fixed-assets are inadequate which causes incompliance towards the applicable
regulations and inaccuracy of assets’ information. Meanwhile,
ministries/agencies, with their diverse primary duties, organizational culture,
and resources, might create various perceptions about assets management.
Accordingly, as noted before, unclear policy outcomes, complex attributes of
the problem, and the involvement of many actors (ministers/agencies), are more
than enough to consider assets inventory as wicked problem, especially in the field of
assets management.
2.
Policy on assets
management will be less effective due to issues on assets inventory
Assets management reform
started in 2007 which has shifted the management assets mindset from assets administrators
to assets manager (Mardiasmo 2012). Before the reform, public organization
focused on how to build and purchase assets, therefore, with the new paradigm,
state-owned assets discussions have transformed to topic about how assets can
be utilized optimally and generate additional revenues. Likewise Minister of
Finance (Media Indonesia 2019) stated that assets should be utilized at its
optimum level for people’s prosperity. She said that assets need to be awakened
from their ‘long sleep’. In accordance with that, DJKN (2019a) has launched its
Roadmap of 2019 – 2028, with the vision of being ‘a distinguished asset
manager’ that would realize one of its mission to become Revenue Center.
However, DJKN (2019a) has
recognized that more than 80% assets are under the authority of other
ministries/agencies. Ideally, to achieve an ultimate condition of assets
management, DJKN as Assets Manager, and ministers/agencies as Assets Users,
need to sing in same rhythm. Nevertheless, it is not as easy as it sounds.
BPK’s reports (2009 – 2018) have shown that assets administration performance
within ministries/agencies have not shown satisfying results. Table 2 shows
BPK’s findings related to assets inventory and administration (2009 – 2018).
The figures explain that
assets inventory issues
have been repeatedly found during the last decade. It seems that policy
instruments are insignificant in addressing the assets inventory problems.
Although recent LKPP’s opinion has been satisfying compared to a decade ago,
the problem around assets inventory still exists. Even in advanced countries,
the need of improvements is highly regarded, and the assets inventory and record are
considered as basic requirements for a complex field of assets management
(Mardiasmo 2012). Therefore, the role of DJKN is critical to assure the
development of assets management policies so our basic needs of the valid and
accurate information of assets are available for further asset management. Just
like property agents, even though they are not the owner, based in the accurate
and comprehensive information of property given by the owner, they can ‘utilize’
(sale) the property to the ‘suitable’ buyer (generating optimal income/revenue).
Therefore if the assets inventory cannot produce high quality assets’ information
(condition, location, quantity, specification, etc.), it can be argued that
assets management policies would not be effective.
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3. What can government do about it?
a. Rethinking about quality assets database
As assets management reforms have
shifted the assets management paradigm from ‘assets administrator’ to ‘assets
manager’, the quality assets database is inevitable condition. It seems that
government needs to realize that there are weaknesses in the current assets inventory
framework in achieving policy outcome of creating distinctive assets database.
Therefore, it needs to assess whether the drawbacks is on policy making, policy
implementation, or policy evaluation stage.
BPK reports can be used as an evaluation
tool to assess whether particular policy can effectively meet the expected
policy outcome. There are, at least, three recommendations for resolving the
problems suggested by BPK (2017), which are:
1)
to conduct assets tracing and improvement of assets
application
2)
to improve the implementation assets administration
control
3)
to carry out control and supervision of assets.
However, since the recent policies
regarding assets inventory were released, which are Minister of Finance
Regulation Number 181/PMK.06/2016 and Number 52/PMK.06/2016, BPK’s findings on
assets inventory were not enhanced significantly. This might have negative
effects on public accountability and public services delivery.
Government accountability might be
questionable as information of assets is not presented concerning their factual
conditions. Public questions possibly will expand to other public financial and
practices responsibilities. For instance, if there is a huge budget allocated
to certain infrastructure program, people need to be assured that spending is
transformed into physical assets. Without the proper assets inventory, those
assets might not be recorded according to its real value. Thus, public trust
towards government might decrease. Therefore, it is evident that assets administration
is considered as an accountability tool.
On the other hand, the absence of
valid and accurate assets information, might lead to deteriorated quality of
public services. Meanwhile, one main objective of government spending is to
maintain high level of public services delivery. However, without reliable data
on assets quality and quantity, budget allocation for enhancing public services
delivery might not generate significant outcome as purchased or constructed
assets could not meet the real public organizations’ needs. For example,
whenever a public organizations do not regularly update technical condition of
its building (whether it is light or severe damage), the allocated budget for
maintaining the building might not be optimal.
Consequently, the decreasing quality of building caused by poor planning
will reduce the useful life time of assets used for public services delivery.
Therefore, it is evident that the quality of asset database is an important
issue for government for a better assets management system.
b. Enhancing communication of the importance of assets management
to ministries/agencies as Asset Users
Communication is a core of any
relationship. It includes coordination, socialization, collaboration, and any
form of communicating the significance of implementing states asset management.
Even a simple message if not communicated correctly will not achieve its
initial intentions. Actors related with the matter need to understand each
obligation and responsibility, therefore, they could generate a fruitful
communication. Meanwhile, Conklin (2006) argued that with wicked problem, the
policy decision is not to solve the problem but more like to initiate coherent
action among stakeholders. By communicating assets management issues, what we
expect is not only to adapt collaborative actions in policy making process but
to enhance the understandability and the sense of awareness about the
importance of compliancy towards regulations with states assets management.
The diversity of public services or
duties among public organization adds to the complexity of finding the
alternative solutions of ideal states assets inventory. Apart from the varied
public organizations’ function, it is evident that disparity of public
managers’ attention between public finance and public assets still exists.
Additionally, Minister of Finance (Bisnis Indonesia 2020) argued that
unsynchronized data on capital expenditure planning with assets report shows
that there is no coherent perception between Budget Users in public
organizations and their stakeholders. For instance, although Indonesian
National Army and Ministry of Defense’s main duty is national defense, they
have to manage their assets according to applicable regulations because the
existence of public services must be in line with good assets management as
part of public transparency and accountability.
However, Ministry of Defense’s audit
opinions in 2016 – 2017 were declared ‘qualified’ due to repeated findings
related to assets, despite it significantly records 22% of total Indonesia’s
fixed assets (BPK 2018d). Moreover, in Table 2, it might be argued that for ten
years public organizations have not been able to ‘anticipate’ auditors’
assessment on their assets management practices although some of the findings
are repeated and interrelated on assets. There are two issues which may cause
that phenomenon.
1) Firstly, it seems that public organizations are not
having sense of necessity and urgency in performing assets management
practices. Accordingly, public managers are faced with various targets, assignments,
and programs related to their public duties, which might divert their focus on
obligation of states assets management. Hence, it is critical to communicate
the awareness of assets management obligation to public managers in the
ministries/agencies to keep them maintaining sustainable assets management
conducts.
2) Secondly, resources, including fund, expertise, time,
and knowledge, are limited to execute good assets management in recent more dynamic
and multifaceted public services delivery. Unfortunately, the improving role of
government in the provision of public services is not always accompanied by
increasing resources which consequently will reduce resources for implementing
decent assets management. Therefore, with communication, policy makers might
reveal the implementation problems between public officials and public managers
or Assets Users and Assets Manager, thus, policy maker can evaluate and improve
the policy making process to resolve the issues.
Subsequently, it can be argued that
communication is needed to be stretched-out not only across ministries/agencies
(Assets Users and Assets Manager) but also within ministries/agencies (public managers
and public officials) about the importance of assets management.
c. Communication channels in promoting state assets
management policies
As Asset Manager, DJKN has
prominent role in assuring that ‘information’ and ‘knowledge’ about assets
management policies are inherently acquired and implemented by assets
stakeholders including ministries/agencies as Assets Users, Government
Internal Supervisory Apparatuses, local governments, and other third parties (such as
grant givers, renters, utilization partners, etc.). Continuous communication
can be conducted through various channels like regular workshops, short courses,
electronic and social media exposures, and more importantly, supervisory and
control visitation by assets users. In one of its publications, Australian
Public Services Commission (2018) suggested that “sustained behavioral change
by many stakeholders and/or citizens” is part of solutions to address wicked
problem. Therefore, DJKN needs to develop the way of communicating its
policies, including assets management issues, to its stakeholders for them to
induce the sense urgency and necessity of performing outstanding assets
management. This will also be linier with one of government assets management
reforms vision which is to stimulate behavioral change associated with state
assets management from administrating (maintenance and/or administrative oriented)
to managing (optimizing oriented).
Moreover, workshops and short
courses are critical to build relevant understanding and competency for all
level of public officials, because it is going to be more optimal if both Assets
Users and Asset Manager are having equal perception in managing state assets.
Accordingly, although Assets Users are obliged to check and balance their
assets management mechanism (PMK 244/PMK.06/2016), the field supervisory visits
from assets manager are needed to communicate, coordinate, and evaluate
specifically as well as directly about their performance on assets management (DJKN
2019b). This could be illustrated like when an assets manager might consider
that allocated fund for communicate its company or services is a form of ‘advertisement’
which turns out to be investment instead of cost to fuel its asset performance.
On the other hand, public organizations need to realize that there is no
short-cut to resolve wicked problems; however “a broad recognition and understanding,
including government and Ministries” is one critical condition for resolving
wicked problem in assets inventory (APSC 2018). Consequently, it is critical
for DJKN to ‘invest’ adequate budget for funding those programs and activities
which will contribute positively to DJKN’s achievements both in quality assets’
database and significant non-tax revenue from assets management.
D. Conclusion
To sum up, the assets inventory
issue in Indonesian public organizations seems to meet some, if not all,
categories of wicked problem. To argue about the wickedness problem of assets inventory,
one can basically understand about reasons why BPK, in the last decade of its
audit reports and recent revaluation program, noted that asset inventory has
not been performed with adequate confidence to meet accountability aspects. On
the other hand, the recent Minister of Finance’s comment (Bisnis Indonesia 2020)
has admitted that some ministries have not orderly managed public funds
allocated to their ministries; one example is non-uniformity between capital expenditures
allocation and records on assets addition in the end of year. Thus, Ministry of
Finance, through DJKN, has become champ of assets management reform by issuing
some of policies in assets inventory, such as Minister of Finance Regulation Number
244/PMK.06/2012, 181/PMK.06/2016, 52/PMK.06/2016, and 118/PMK.06/2017, however,
policies implementation seem has not been showing satisfying results. This news
might also somehow affect the DJKN’s next projects in assets management which
are namely assets insurance, assets optimization, assets portfolio evaluation,
and more notably, new capital city (IKN).
Quality assets’ database and
continuous communication are among factors that are arguably significant in
taming, if not resolving, wickedness of assets inventory issues. It is evident
that the availability of valid data on assets is one of public accountability
and transparency prerequisite. If government wants to be held accountable by
public, then the accurate data of how it manages public money, including
assets, should be on its priority list. However, the suboptimal policy
implementation on assets inventory has been alleged as contributing factor of
the recent BPK’s audits finding on assets. The lack of public officials’
understanding and attention toward assets management issues, especially within Assets
Users, are one aspect that needs to be considered by policy makers. Therefore,
it is necessary for DJKN, as policy maker, to improve the communication channels
by accommodating regular workshops, short courses, electronic and social media
exposures, and supervisory and control visitation by Assets Users. These
communication tools inevitably play critical roles as ‘investment’ in the whole
assets management framework which, in later time, will contribute to a better
quality assets database and stimulate positive behavioral change of assets
users’ concerning on assets management,
specially assets inventory issues.
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