Jakarta. Police say they have found indications of state losses amounting to at least Rp 50 billion ($3.85 million) in last year’s procurement of uninterruptible power supply equipment for schools in Jakarta.

“Based on the audit conducted by [police] investigators and the BPKP [State Finance Development Comptroller] there were mark-ups that caused state losses of Rp 50 billion,” National Police spokesman Sr. Comr. Rikwanto said in Jakarta on Wednesday.

“This is still an estimate and the number will likely rise as we continue to calculate [the losses].”

Police are investigating suspicious earmarks in the city’s 2014 budget to procure UPS devices for schools that did not request them, and at costs that appear to be highly inflated.

Last year, the city spent Rp 330 billion on the UPS equipment for 55 schools in the capital, in a program that Governor Basuki Tjahaja Purnama says his administration never proposed.

The schools say they neither needed nor requested the devices, which at a price tag of Rp 6 billion each are highly inflated compared with retail listings of no more than Rp 20 million per device.

The companies listed as tender winners for the procurement were also deemed suspicious. Addresses listed were found to be empty warehouses and small shops.

Rikwanto confirmed that the program was included in the 2014 budget during deliberations by the City Council.

“In September [2014] there was a revision to the provincial budget. That’s when the UPS program appeared,” he said.

The investigation into the alleged mark-ups was begun by the Jakarta Police, which has questioned 73 witnesses to date, and was last week transferred to the National Police, which found indications of more than just mark-ups, Rikwanto said.

The procurement process “also violated regulations and procedures,” he said.

He said the UPS machines were actually provided by a single distributor, which appointed 35 shell companies to enter the bidding process. “This distributor fixed the price estimates and other details for the bidding process,” Rikwanto said.

The UPS machines were distributed to schools across West and Central Jakarta between October 2014 and January this year.

“Everyone involved in the UPS project will be investigated, be it the executive, the councilors or vendors. We will trace the flow of the money and see who profited [from the scheme],” Rikwanto said.

He added that police investigators were focusing on several individuals as potential suspects. “I can’t tell you their initials yet. We will announce them later,” he said.

Prior to handing the case over to the National Police, the Jakarta Police said last week that at least two people could soon be charged in the case.

The Corruption Eradication Commission (KPK) is also looking into the case but says its investigation will focus on the bigger picture: the alleged budget manipulation during the City Council’s budget deliberations.

Governor Basuki says his office has found Rp 12.1 trillion in unsolicited programs inserted into this year’s budget, including for UPS equipment. He says he suspects similar manipulations likely go back to 2012.

KPK interim deputy chairman Johan Budi said the antigraft body was still examining documents submitted by the governor, including copies of both the City Hall-approved and City Council-adulterated versions of the 2012, 2013 and 2014 budgets.

“For the 2012 and 2013 budgets, our investigators are on the ground collecting more evidence and statements,” Johan said. “For the 2014 budget, we are still waiting for the BPKP to complete its audit.”

The KPK will host a meeting with the KPK leaders soon, Johan said, to determine whether the investigations have come up with conclusive indications of corruption and manipulation in the city budget.

“The launch of a full-fledged investigation will depend on the outcome of this meeting,” he said.

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Source: The Jakarta Globe