Board of Trustees of Seven State Universities Meeting to Discuss State-Owned Legal Entities (BHMN) Management
Effective 2000, University of Indonesia (UI), University of Gadjah Mada (UGM), Bogor Agricultural University (IPB), and Bandung Institute of Technology (ITB), with reference to the Government Regulations on the University status as State-owned Legal Entities (BHMN), have been undertaking its transformation process to improve the quality and competitiveness towards the principles of autonomy, and in order to optimize and the role of state-owned entities the supervision and management therof must be accountability, transparency, and efficiency. Similarly, University of Sumatra Utara (USU), University Pendidikan Indonesia (UPI), and Universty of Airlangga (UNAIR), have reorganized its institution and shifted its legal staus into State-owned Legal Entities (BHMN). Records showed that those universities have successfully made achievements both academic and non-academic as a result of the transformation process as State-owned Legal Entities universities.
Under Article No. 5 of the Summary of Justice Consultative Meeting (RPH) the Constitutional Court Case Number 11-14-21-126-136/PUU-VII/2009, State-owned Legal Entities universities which were established before the decision was still being recognized and allowed to be functional as educational institution based on the Government Law No. 20 Year 2003 on National Education System, Act No. 17 of 2003 on State Finance, No. 1 Year 2004 regarding State Treasury, and No. 15 Year 2004 on Investigation and Liability Management State Financial Responsibility.
Government Regulations on the Status of University as State-owned Legal Entities regulate univesities in its financial management, but those regulations seem incomplete as:
a. Government Decree on BHMN stated that income of State-owned Legal Entities universities from the public funds (community) is not a Non-Tax State Revenues (non-tax revenues). This is in accordance with Law No. 20 Year 2003 on National Education System Article 53 Paragraph 3, which states that legal entities principlelly are non-profit education organization and they are allowed to manage their funds independently. Meanwhile there is the view that according to State Finance Law, the Law on State Treasury, and the Act on non-tax revenues, that those incomes are non-tax revenues (which must be paid to the State Treasury).
b. Work Plan and Annual Budget (particularly those funded by public funds) will be determined by the Board of Trustees. On the other hand according to state financial legislation, the budget must be determined by the Minister of Finance and included in the state budget mechanism.
According to the Act on State Treasury, the management mechanism and the use of non-tax revenues can be flexible (used directly), by patterns of Financial Management of Public Service Agency (BLU). However, the BLU for university is not necessarily considered appropriate because:
a. Law on National Educational System has stipulated that educational institutions should be non-profit, while the Public Service Agency may obtain (but not focused on) profit;
b. Public Service Agency (BLU) has a governance scheme which might not accommodative to the representation of some stakeholders (ie community, alumni, students and employees), wherease their representation in the state-owned legal entities scheme is legally recognized through the Board of Trustees;
c. Public Service Agency (BLU) management mechanism on non-tax revenues are also unsuitable to the nature of universities with its research activities and community service, which usually is funded from grants from private institutions, nationally and internationally, which requires the autonomy of university financial management;
d. Public Service Agency (BLU) feared to have less efficient in its bureaucratic process, as the decision making process for its education cost standards must be approved by the Minister of Finance, and the management Public Service Agency (BLU) is under the Directorate Public Service Agency (BLU) (Echelon II);
e. The shift of status of State-owned Legal entities university to become Public Service Agency (BLU) is not in accordance with Government Law of Education Systems which requires the Act as a legal entity container for the institution. The social and organizational cost of institutional change is not cheap; and
f. Some State-owned Legal Entities university have owned assets that have been separated from the country treasure, so that does not comply with the Public Service Agency BLU scheme.
It is well understood that according to the Government Regulation No. 17 of 2010 on Management and Operation of Education, this regulations do not regulate the governance of the educational unit (State University) as its governance have been stipulated in the Government Decree No. 9 on the Stated-owned Legal Entities (UU BHP). Based on the Decision of the Constitutional Court Number 11-14-21-126-136/PUU-VII/2009, dated 31 March 2010, UU BHP no longer has its legal activities. In this regard, the Ministry of National Education has prepared a Draft Regulation on the Amendment of Government Regulations No. 17 Year 2010 on Management and the Operation of the Educational Unit (RPP). However, several articles in those Amendments are considered to be less accommodative on the interests of those state universities.
In order to discuss the Various Aspects of Development and Management of State-owned Legal Entities (BHMN) and explore any possibilities of the solution for the future management of of those state universities, on 19 August 2010, the Board of Truatees of Bogor Agricultural University has initiated to invite the exective boards as well as its members of Board of Truatees of those 7 (seven) universities: UI, UGM, IPB, ITB , USU, UI and Unair, for a meeting held at Graha Energy, Jalan Jenderal Sudirman Jakarta. During which the Chairman of Board of Trustees of those universities successfully formulated an agreement that has been submitted to the President of the Republic of Indonesia, Dr. H. Susilo Bambang Yudhoyono. (Wied).
