Transparency, PSAK, and Indonesian Language Obligations
Why PPPSRS Financial Reports Shouldn't Be Considered a Formality
In many apartments, PPPSRS financial reports are often treated simply as an "annual obligation" to fulfill the RUTA (Housing and Housing Unit) requirements. In fact, financial reports are the heart of accountability. From them, owners and residents can find out:
- Where does the IPL money come from?
- What is the money used for?
- Who manages it?
- Are there any waste, markups, or conflicts of interest?
Without accurate, transparent, and understandable financial reports, PPPSRS loses its moral and legal legitimacy in the eyes of its members.
The problem is, many financial reports:
- Not adhering to accounting standards
- Not explaining the origin of the figures
- Even written in a foreign language that members don't understand
This is where three major issues converge: reporting standards, report content, and report language.
PPPSRS as a Legal Entity: Cannot be done haphazardly
PPPSRS is not an informal community. It is a legal entity that:
- Managing public funds (from owners and residents)
- Contracting vendors (elevators, security, parking, utilities, cleaning)
- Managing shared assets (common areas, common facilities, common land)
Therefore, the PPPSRS financial report must:
- Orderly
- Auditable
- Understandable by members
- Legally accountable
This is not about style, but about the rights of members and the obligations of administrators.
Financial Reporting Standards: Why You Should Refer to PSAK
PSAK (Financial Accounting Standards Statement) is the national standard for preparing financial statements in Indonesia. Although PPPSRS is not a company, it still manages money and assets, so:
- Don't just keep random records.
- Don't just use a simple "cash in-out" record.
- You must have a clear reporting structure.
At a minimum, the PPPSRS financial report must contain:
- Statement of financial position (assets, liabilities, funds)
- Statement of operating activities or profit and loss
- Statement of cash flows
- Notes to the financial statements
With the PSAK approach, members can know:
- How much money is left in the IPL?
- How much sinking fund has been collected?
- Is there any debt to vendors?
- Are there any funds sitting unaccounted for?
Without standards, numbers can be “shaped to suit the administrators’ tastes.”
PPPSRS Financial Report Contents: Must Not Be Vague
Financial reports are more than just tables of numbers. They must explain the realities of management. Therefore, they must clearly show:
- Revenue:
- IPL
- Fines
- Parking revenue (if managed by PPPSRS)
- Other revenue
- Expenses:
- Elevator Contract
- Security
- Cleanliness
- Building Management
- Shared Electricity and Water
- Building Insurance
- Routine Maintenance
- Major Repairs
- Reserve Funds
- Sinking fund
- Capital Replacement Fund
Numbers without explanation are dead numbers. Members have the right to know:
- Why are elevator fees increasing?
- Why are security costs soaring?
- Why isn't the sinking fund increasing significantly?
Financial Report Language: Indonesian is mandatory
This is where many administrators "play tricks." Reports are written in English, and even in extreme cases, they may use other languages like Swahili or Urdu. They claim it's "more professional," "consultant format," or "international standards."
However, legally, this is wrong.
Law No. 24 of 2009: The Legal Basis is Clear
Law Number 24 of 2009 concerning the National Flag, Language and Emblem, as well as the National Anthem, strictly regulates language obligations.
Article 31 paragraph (1):
"Indonesian must be used in memoranda of understanding or agreements involving:
a. state institutions,
b. government agencies of the Republic of Indonesia,
c. Indonesian private institutions, or
d. individual Indonesian citizens."
Meaning:
Every official document created by or involving an Indonesian institution or legal entity must be in Indonesian.
PPPSRS is a legal entity for associations in Indonesia. This means:
- It is considered an "Indonesian private institution."
- All official documents must be in Indonesian.
Including:
- Financial reports
- Vendor contracts
- RUTA minutes
- Management decision letters
Article 26 paragraph (1):
"Indonesian must be used in the names of buildings, streets, apartments or residential areas, offices, commercial complexes, trademarks, business entities, educational institutions, and organizations established or owned by Indonesian citizens or Indonesian legal entities."
This emphasizes:
- Indonesian organizations are required to use Indonesian
- in their identity and administration.
PPPSRS is an organization founded by Indonesian citizens and is an Indonesian legal entity. Therefore:
- The name, administration and official documents must be in Indonesian.
Foreign languages may be used only as companion translations, not the main language.
Why Language Matters for Transparency
Language is more than just a writing tool. It's a tool of power.
If financial reports are prepared in:
- English
- Swahili
- Urdu
- Or another language not understood by the majority of members
So:
- Members lose their right to understand.
- RUTA discussions become lopsided.
- Management holds control over the meaning.
Transparency is not enough with “the report exists.” Transparency means:
- The report is readable
- Understandable
- Critiqueable
Reports in a foreign language that members do not understand are a form of obfuscation, not professionalism.
The Relationship between Language, PSAK, and Member Rights
These three things cannot be separated:
- Standards (PSAK) ensure proper structure.
- Report content ensures clarity regarding the use of funds.
- Indonesian language guarantees members' right to understand.
If one is missing:
- Without PSAK → numbers can be manipulated
- Without detailed information → false transparency
- Without Indonesian → members are blinded
Therefore, the PPPSRS financial report which is morally and legally valid must:
- Prepared according to proper accounting standards
- Explains the origin and use of funds
- Uses Indonesian as the primary language
Conclusion: Financial Reporting is a Right, Not a Gift
Financial reports are not a "kind gift" from the board. They are the members' right.
The right to know:
- Where does the IPL money go?
- How is the sinking fund managed?
- Who benefits from the contract?
- Is the management honest or manipulative?
Without standard, clear, and Indonesian-language reports, PPPSRS will only become a fund manager, not a responsible manager.
FAQ
1. Is a PPPSRS required to comply with PSAK?
In practice, a PPPSRS is not a company, but it manages money and assets. Therefore, the preparation of financial reports must refer to generally accepted accounting principles, including PSAK or relevant non-profit standards. Without standards, reports become subjective and easily manipulated.
2. Can PPPSRS financial reports be in English?
Not as the primary language. Based on Law No. 24 of 2009, Articles 31 and 26, all official documents of Indonesian private institutions must be in Indonesian. English is only permitted as a supporting translation.
3. What if reports are prepared in Swahili or Urdu?
Legally and ethically, this is more problematic. Besides violating the Indonesian language requirement, the majority of members do not understand the language. This eliminates the members' right to supervise and control the management.
4. Can reports not in Indonesian be considered invalid?
Official documents that do not meet formal requirements, including language requirements, can be questioned. This could be the basis for an objection, dispute, or lawsuit against the management.
5. What should members do if the report is not transparent?
Members can:
- Request a report in Indonesian
- Request a detailed explanation of each item
- Propose an independent audit
- Discuss it in the General Meeting
- Use legal action if rights continue to be ignored
Financial reports are a member control tool. Without them, PPPSRS loses its meaning as a collectively owned organization.
Also read : Uncovering the IPL Controversy and the Key Role of PPPSRS and also: Can the IPL bill be lowered? Absolutely!
