Understanding Accountability Reporting in

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Understanding Accountability Reporting in
Managing Assets and Liability of BPJS

(for discussion purposes only)

Prepared
by:

Dr. Ludovicus Sensi Wondabio,
CPA

World Bank Consultant

Accounting and Finance Senior Specialist


Balairung Hotel, Jakarta

April 9, 2013

1

Point for Discussion

1.
The

Schemes

of

Funding

and

Managing

Fund

of

SJSN

in

Accordance

with

UU

No
.

24
,

2011

2.
The

Schemes

of

Relationship

Between

Institution

3.
International

Best

Practices

4.
Undang
-
Undang

No
.

40

Tahun

2004

5.
BPJS

Assets

Management

and

the

Social

Security

Fund

Assets

Based

on

BPJS

Law

6.
BPJS

Assets

Management

Impact

to

Accountability

Reporting

7.
Defini
tion

of

Non

Profit

in

Accounting

Perspective

8.
Format

Financial

Statements

of

BPJS

(Tentative)

9.
Format

Financial

Statements

in

Other

Countries

10.
Critical

Accountability

Reporting

in

Managing

Assets

and

Liability

Issue
s

of

BPJS

in

Indonesia

2

1. The
Schemes of Funding and Managing Fund of
SJSN

in
Accordance with UU No. 24, 2011

Government

Members

Employer

Government

Investment

Instrument

Investment

Instrument

BPJS
Funds

Social
Security
Funds

BPJS

Management
Fee

Return of Surplus

Placement

Placement

Investment Yield +
Disbursement of
Investment

Initial
Capital

Contributions

Benefit

Contributions

Article

42, 43, 44

Article

40, 41

Investment Yield +
Disbursement of
Investment


How to

determine

to be fair?

Equity or

operational

Transaction?

Accrual

basis?







3

2. The
Schemes
of Relationship Between Institution

PRESIDENT

BPJS 1

Health
Insurance

Custodian Bank

BPJS 2

Work
Accident
Insurance

Death
Insurance

Post
Retirement
Health
Care

Pension
Program

Work
Accident
Insurance
Funds

Death
Insurance
Funds

Post
Retirement
Funds

Pension
Funds

Health
Insruance

Funds

DJSN

Ministry

General Review and

Policy Investment Review

Budgeting

Monitoring

and Evaluation

Article 62

(JAMSOSTEK)

Article 60

(ASKES)

MoF

Administrator/
Risk taker?

Loss/Deficit
of Program/
BPJS?





4

3. International Best Practices


SINGAPORE
:

The

Central

Provident

Fund

(CPF)

in

Singapore

provides

insurance

and

saving

program
.

The

program

is

managed

by

one

entity

which

also

provides

financial

reporting

for

such

program
.

The

same

with

Malaysia,

the

government

does

not

have

any

equity

interest

in

the

entity
.

Financial

statement

is

constracted

based

on

GAAP

(IFRS)
.



PHILIPINES
:

Social

Security

System

(SSS)

in

the

Philippines

provides

saving

and

insurance

program,

the

same

with

Singapore
.

The

program

is

managed

by

one

entity

and

the

Government

does

not

have

any

equity

interest

in

the

program

itself
.

Financial

statement

is

constracted

based

on

GAAP

(IFRS)
.



KOREA
:

National

Pension

Services

(NPS)

in

Korea

provides

pension

and

insurance

program
.

Financial

statement

is

constracted

based

on

GAAP

(IFRS)
.

5



How is
accountability
reporting and managing
assets
for BPJS in
Indonesia?

6

4. Undang
-
Undang No. 40 Tahun 2004

UNDANG
-
UNDANG REPUBLIK INDONESIA

NOMOR 40 TAHUN 2004

Social

Insurance


Mutual cooperation

FIS

Management
of BPJS


Program

FIS

Combine
FIS


Nonprofit


Transparency


Prudence


Accountability


Portability


Mandatory


Trust funds

`

7

Government

Members

Employer*

Other
Sources

BPJS Funds

Social
Security
Funds

I
nvestment
Instrument

Investment
Instrument

Contributions, Article 43

(
1b
)

*
Including the Government as Employer for Sivil Servants (PNS) and Army (TNI) / Police (POLRI)

Contributions

Article

(
1a
)

Benefits

Article 43

(
2a
)


Initial
Capital

Article

41 & 42

Management fee

Article
41 (1d)
&

43
(2b)

Investment Yield
+
Disbursement of
Investement

Article

41 (1
c
)


Placement

Article
41
(
2d
)

Contribution
Assistance

Article
43
(
1a
)

Return of Surplus

Article
4
(b)

BPJS

Development Fund

Article
.43
(
2c
)

BUMN

Transfer of Assets

Article
41(1b)

Government

Other
Sources

Article

41
(1e)

Article

43
(1d)

Assets Transfer
Program

Article
43(1c)

Investment Yield
+
Disbursement of
Investement

Article

4
3

(
1
b)

BUMN

5. BPJS Assets Management and the Social Security Fund Assets
Based on BPJS Law

`

8

Accountability Reporting

6. Critical Issues

BPJS Assets Management Impact to Accountability Reporting

Financial Accounting

Reporting

Program Accountability
Reporting

I.
Generally Accepted Accounting Principle (GAAP)


Nonprofit


Financial Statements

1. Statements of financial position

2. Stetements of comprehensive income

3. Statements of changes in equity

4. Statements of cash flows

5. Statements of net revenue and expenses of
trust funds

6.
Statements of changes in trust funds

7.
Notes to financial statement

II.
Statutory Accounting Practices (SAP)

III.
Management Accounting Report (KPI)

1.
Introduction of the Program

2.
Reporting of Performance Program

3.
Reporting of Performance Investment
Program (KPI)

4.
Reporting of Liquidity and Solvability
Program

5.
Reporting of Financial Position Program
(ALMA)

9

7. Defini
t
i
on

Non Profit
in
Accounting


Laporan

keuangan

yang

disajikan

oleh

entitas

nirlaba

harus

memenuhi

karakteristik

sebagai

berikut
:

a.
Sumber

daya

entitas

nirlaba

berasal

dari

pemberi

sumber

daya

yang

tidak

mengharapkan

pembayaran

kembali

atau

manfaat

ekonomi

yang

sebanding

dengan

jumlah

sumber

daya

yang

diberikan
.

b.
Menghasilkan

barang

dan/atau

jasa

tanpa

bertujuan

memupuk

laba,

dan

jika

entitas

nirlaba

menghasilkan

laba,

maka

jumlahnya

tidak

dibagikan

kepada

pendiri

atau

pemilik

entitas

nirlaba

tersebut
.

c.
Tidak

ada

kepemilikan

seperti

umumnya

pada

entitas

bisnis,

dalam

arti

bahwa

kepemilikan

dalam

entitas

nirlaba

tidak

dapat

dijual,

dialihkan,

atau

ditebus

kembali,

atau

kepemilikan

tersebut

tidak

mencerminkan

proporsi

pembagian

sumber

daya

entitas

nirlaba

pada

saat

likuidasi

atau

pembubaran

entitas

nirlaba
.

10

Governmental

Accounting

Standards

Board

(GASB)

Concepts

Statement

1
,

"Objectives

of

Accounting

and

Financial

Reporting

for

Governmental

Units",

identifies

these

characteristics

as

follows
:

a.
Primary

characteristics

of

government's

structure

and

the

services

it

provides

i.
The

representative

form

of

government

and

the

separation

of

powers

ii.
The

federal

system

of

government

and

the

prevalence

of

inter
-
governmental

revenues

iii.
The

relationship

of

taxpayers

to

services

received


b.
Control

characteristics

resulting

from

government's

structure

i.
The

budget

as

an

expression

of

public

policy

and

financial

intent

and

as

a

method

of

providing

control

ii.
The

use

of

fund

accounting

as

a

control

device

7. Accounting and Reporting Differences between
Nonprofit Entity and Profit Seeking Enterprises (cont’d)

11

c.
Other

Characteristics

i.
The

dissimilarities

between

similarly

designated

governments

ii.
The

significant

investment

in

nonrevenue
-
producing

capital

assets

iii.
The

nature

of

the

political

process


From

an

overall

perspective,

the

purposes

of

general
-
purpose

financial

reporting

by

nonprofit

organization

for

governmental

entities

are

to

assist

users

in

assessing

accountability

and

making

economic,

social,

political

decisions
.

The

specific

objectives

of

general
-
purpose

financial

reporting

by

these

entities
.

7. Accounting and Reporting Differences between
Nonprofit Entity and Profit Seeking Enterprises (cont’d)

`

`

12

8. Format Financial Statements of BPJS (Tentative)

Financial
Information
System of BPJS

I.
Generally Accepted Accounting Principle (GAAP)


Nonprofit


Financial Statements

1. Statements of financial position

2. Stetements of comprehensive income

3. Statements of changes in equity

4. Statements of cash flows

5. Statements of net revenue and expenses of trust
funds

6.
Statements of changes in trust funds

7.
Notes to financial statement

II.
Statutory Accounting Practices (SAP)

III.
Management Accounting Report (KPI)

I.
Generally Accepted Accounting Principle (GAAP)


Nonprofit


Financial Statements of the program

1. Statements of financial position program

2. Statements of revenue and expense program

3.
Statements of cash flows program

4. Statements of changes in net assets

5. Notes to financial statement

II.
Statutory Accounting Practices (SAP)

III.
Management Accounting Report (KPI)

Financial
Information of
the Program

Combine
Financial
Information

`

`

13

BPJS

Statements of Financial Position

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

December 31

January 1

Notes

2014

2014

Rp

Rp

ASSETS

Cash and cash equivalent

xx

xxx

xxx

Accrued income

xx

xxx

xxx

Contribution receivables

xx

xxx

xxx

Short
-
term investments

xx


Deposits
on call

xx

xxx

xxx


Time
deposits

xx

xxx

xxx


Equity
securities

xx

xxx

xxx


Debt
securities

xx

xxx

xxx


Mutual
funds

xx

xxx

xxx

Prepaid expenses

xx

xxx

xxx

Assets


available for sale

xx

xxx

xxx

Investment in
shares


xx

xxx

xxx

Investment properties

xx

xxx

xxx

Property and equipment


net

xx

xxx

xxx

Intangible assets

xx

xxx

xxx

Other assets

xx

xxx

xxx

TOTAL ASSETS

xxx

xxx

Is it possible ?

Need fair value

measurement

Is it possible

to be invested

In foreign

countries ?

`

`

14

BPJS

Statements of Financial Position (cont’d)

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

December 31

January 1

Notes

2014

2014

Rp

Rp

LIABILITIES AND EQUITY

Payable

xx

xxx

xxx

Estimated technical reserve

xx


Premium
reserve

xx

xxx

xxx


Claim
reserve

xx

xxx

xxx

Taxes payable

xx

xxx

xxx

Accrued
expense

xx

xxx

xxx

Long
-
term employee benefits liability

xx

xxx

xxx

Other liabilities

xx

xxx

xxx

Total Liabilities

xxx

xxx

EQUITY

Capital

xx

xxx

xxx

Other
comprehensive income

xx

xxx

xxx

Retained earnings

xx

xxx

xxx

Total Equity

xxx

xxx

TOTAL LIABILITIES AND EQUITY

xxx

xxx

Need actuarial

int. based

practice?

Need approval

from tax office?

BKF

Surplus

distribution

Mechanism?







14

Need fair value

measurement

`

15

BPJS

Statements of Comprehensive Income

For the Year Ended December 31, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

Notes

Rp

REVENUE

Management fee of the
program

xx

xxx

Investment income

xx

xxx

Other revenue

xx

xxx

Total Revenue

xx

xxx

EXPENSE

Employee and management expense

xx

xxx

General administrative expense

xx

xxx

Post employment benefits

xx

xxx

Depreciation expense

xx

xxx

Total Expense

xxx

INCOME BEFORE TAX

xx

xxx

INCOME TAX EXPENSE

xx

(xxx)

INCOME AFTER TAX

xxx

Others comprehensive income

xx

xxx

Unrealized gain (loss) on increase (decrease) in fair value of investments

xx

xxx

Total Comprehensive Income

xxx

TOTAL COMPREHENSIVE INCOME

xxx

Who will determine

mngmt fee to be fair?

`

`

16

BPJS

Statements of Changes in Equity

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousands of Rupiah, unless Otherwise Stated)

Unrealized Gain (Loss)

On Increase (Decrease)

Others

General

Retained

In Fair Value of

Comprehensive

Total

Notes

Capital

Reserve

Earnings

Investments

Income

Equity

Rp

Rp

Rp

Rp

Rp

Rp

Balance as of January 1, 2014

xxx

xxx

-

xxx

xxx

xxx

Net income during the year

-

-

xxx

-


-

xxx

Unrealized gain (loss) on increase


(decrease) in fair value of in vestments

-

-

-

xxx

-

xxx

Others comprehensive income

-

-

-

-

xxx

xxx

Balance as of December 31, 2014

xxx

xxx

xxx

xxx

xxx

xxx

`

`

BPJS

Statements of Cash Flows

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

JKK

JK

HT

Pension

Program

Program

Program

Program

BPJS

Total

CASH FLOWS FROM OPERATING ACTIVITIES

Cash received from contributions

xxx

xxx

xxx

xxx

xxx

xxx

Cash payment for claims

xxx

xxx

xxx

xxx

xxx

xxx

Dividend income received

xxx

xxx

xxx

xxx

xxx

xxx

Interest income received

xxx

xxx

xxx

xxx

xxx

xxx

Finance costs paid

xxx

xxx

xxx

xxx

xxx

xxx

Income tax paid

xxx

xxx

xxx

xxx

xxx

xxx

Net Cash Provided by (Used in) Operating Activities

xxx

xxx

xxx

xxx

xxx

xxx

CASH FLOWS FROM INVESTING ACTIVITIES

Placements in time deposit

xxx

xxx

xxx

xxx

xxx

xxx

Proceeds from termination in time deposit

xxx

xxx

xxx

xxx

xxx

xxx

Proceeds from (placement in) debt securities

xxx

xxx

xxx

xxx

xxx

xxx

Proceeds from (placement of) investment of mutual fund

xxx

xxx

xxx

xxx

xxx

xxx

Acquisition of property and equipment

(xxx)

(xxx)

(xxx)

(xxx)

(xxx)

(xxx)

Proceeds from sales of property and equipments

xxx

xxx

xxx

xxx

xxx

xxx

Net Cash Provided by (Used in) Investing Activities

xxx

xxx

xxx

xxx

xxx

xxx

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from initial capital

xxx

xxx

xxx

xxx

xxx

xxx

Other financing activities

xxx

xxx

xxx

xxx

xxx

xxx

Net Cash Provided by (Used in) Financing Activities

xxx

xxx

xxx

xxx

xxx

xxx

Net increase (decrease) in cash and cash equivalents

xxx

xxx

xxx

xxx

xxx

xxx

Cash and cash equivalents at January 1, 2014

xxx

xxx

xxx

xxx

xxx

xxx

Effect of exchange rate changes on cash and cash equivalents

xxx

xxx

xxx

xxx

xxx

xxx

Cash and cash equivalents at December 31, 2014

xxx

xxx

xxx

xxx

xxx

xxx

Define benefit

program

?

`

`

18

BPJS

Statements of Revenue and Expense
Program

For the Year Ended December 31, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

Notes

Rp

REVENUE PROGRAM

Members contribution

xx

xxx

Investments income

xx

xxx


Interest

xx

xxx


Dividend

xx

xxx


Rental

xx

xxx


Gain
(loss) investments disposal

xx

xxx


Changes
in fair value

xx

xxx

Other income

xx

xxx

Total Program Revenue

xxx

EXPENSE PROGRAM

xx

xxx

Training and development expenses

xx

xxx

Management expenses

xx

xxx

Personnel expenses

xx

xxx

Depreciation and amortization expenses

xx

xxx

Others insurance expenses

xx

xxx

Total Program Expense

xxx

TOTAL REVENUE AND EXPENSE
PROGRAM

xxx

1.
Collectibility

2.
Accrual

?

`

`

19

BPJS

Statements of Changes in Trust Funds
Program

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousands of Rupiah, unless Otherwise Stated)

Notes

Rp

Balance as of January 1, 2014

xx

xxx

Surplus
(deficit) program

xx

xxx

Distribution
to members

xx

xxx

Government
donation

xx

xxx

Balance as of December 31, 2014

xxx

In deficit who will

be responsible ?


Contract management


Receivable to GOI

Increase benefit ?

`

`

20

BPJS

Statements of Financial
Position Program

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

December 31

January 1

Notes

2014

2014

Rp

Rp

ASSETS

Cash and cash equivalent

xx

xxx

xxx

Accrued income

xx

xxx

xxx

Contribution receivables

xx

xxx

xxx

Short
-
term investments


Deposits
on call

xx

xxx

xxx


Time
deposits

xx

xxx

xxx


Equity
securities

xx

xxx

xxx


Debt
securities

xx

xxx

xxx


Mutual
funds

xx

xxx

xxx

Prepaid
expense

xx

xxx

xxx

Assets


available for sale

xx

xxx

xxx

Other assets

xx

xxx

xxx

TOTAL ASSETS

xxx

xxx

`

`

21

BPJS

Statements of Financial
Position

Program
(cont’d
)

December 31, 2014 and January 1, 2014

(Figures are Presented in Thousand of Rupiah, unless Otherwise Stated)

December 31

January 1

Notes

2014

2014

Rp

Rp

LIABILITIES AND
NET ASSETS

Claim and benefit p
ayable

xx

xxx

xxx

Estimated technical reserve


Premium
reserve

xx

xxx

xxx


Claim
reserve

xx

xxx

xxx

Accrued
expense

xx

xxx

xxx

Other liabilities

xx

xxx

xxx

Total Liabilities

xxx

xxx

NET ASSETS

Net

assets


trust funds program

xx

xxx

xxx

Total
Net Assets

xx

xxx

xxx

TOTAL LIABILITIES AND
NET ASSETS

xxx

xxx

Recorded

as liability

to BPJS

22

9.
Format
Financial Statements in Other Countries

Central Provident Fund (CPF) in Singapore

Statement of Financial Position

(Balance Sheet)


SINGAPORE
:

The

Central

Provident

Fund

(CPF)

in

Singapore

provides

insurance

and

saving

program
.

The

program

is

managed

by

one

entity

which

also

provides

financial

reporting

for

such

program
.

The

same

with

Malaysia,

the

government

does

not

have

any

equity

interest

in

the

entity
.

LIABILITIES:

ASSETS

LIABILITIES:

Statement of Financial Position

(Balance Sheet)

EQUITES:


Member account


Insurance funds

23

Statement of Financial Position

(Balance Sheet)

24

Statement of Financial Position

(Balance Sheet)

25

Statement of Financial Position

(Balance Sheet)

26

Statement of Financial Position

(Balance Sheet)

27

9.2 Social
Security System
(SSS) in
Philipines


PHILIPINES
:

Social

Security

System

(SSS)

in

the

Philippines

provides

saving

and

insurance

program,

the

same

with

Singapore
.

The

program

is

managed

by

one

entity

and

the

Government

does

not

have

any

equity

interest

in

the

program

itself
.

LIABILITIES:

ASSETS

LIABILITIES:

Statement of Financial Position

(Balance Sheet)

RESERVES

28

Statement of Financial Position

(Balance Sheet)

29

Statement of Financial Position

(Balance Sheet)

30

Statement of Financial Position

(Balance Sheet)

31

Statement of Financial Position

(Balance Sheet)

32

Statement of Financial Position

(Balance Sheet)

33

Statement of Financial Position

(Balance Sheet)

34

9.3 National Pension Services (NPS) in Korea


KOREA
:

National

Pension

Services

(NPS)

in

Korea

provides

pension

and

insurance

programs
.

Financial

statement

is

constracted

based

on

GAAP

(IFRS)
.

35

Statement of Financial Position

(Balance Sheet)

36

Statement of Financial Position

(Balance Sheet)

37

Statement of Financial Position

(Balance Sheet)

38

Statement of Financial Position

(Balance Sheet)

39

Statement of Financial Position

(Balance Sheet)

40

Statement of Financial Position

(Balance Sheet)

41

Statement of Financial Position

(Balance Sheet)

42

Statement of Financial Position

(Balance Sheet)

43

10. Critical Accountability Reporting in
Managing Assets and Liability Issues of BPJS

1.
Basis

of

Preparation


GAAP

(accrual

and

going

concern)


2.
Financial

Statement

of

BPJS

vs

Financial

Statements

Program

(Non

Profit)


3.
Distribution

of

Surplus

of

BPJS



4.
Investment

issue

(Tax

free)?


5.
Management

Fee

of

BPJS


6.
Application

of

Reserve

Contract

(IFRS

4

or

PSAK

62
)


Recognition,

measurement,

presentation

and

disclosure

(International

Actuarial

Model)


How

to

assure

that

such

Liability

is

Adequa
te

(LAT)



Valuation

of

reserve

should

be

on

or

off

balance

sheet?


6.
Financial

Instruments



Fair

Value

of

Financial

Instruments

and

Impairment

of

Assets

(Receivables)

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