THE CORRELATION BETWEEN THE UNQUALIFIED OPINION BY THE AUDIT BOARD OF INDONESIA AND ANTI CORRUPTION ACT

An Unqualified Opinion ( Opini Wajar Tanpa Pengecualian ) is an assessment provided by the Audit Board of Indonesia to state institutions whose financial management is deemed appropriate. However, it is often observed that entities receiving the An Unqualified Opinion designation are subsequently found to have engaged in criminal acts of corruption, which raises public doubts concerning the credibility of BPK's assessments. This study elucidates the correlation between BPK's authority to issue opinions and efforts to combat corrupt practices. The research methodology employed is juridical-normative with a legislative and case-based approach. The findings indicate that Audit Board of Indonesia plays a pivotal role in the fight against corruption. Audit Board of Indonesia 's authority to provide opinions hinges on compliance with the relevant legislation, suggesting that Audit Board of Indonesia can detect the presence or absence of criminal elements committed by the audited entities. The occurrence of corruption cases involving an Unqualified Opinion recipients is primarily due to opportunities and disclosure gaps in the audit process. A correlation exists between Audit Board of Indonesia 's opinions and anti-corruption efforts, albeit limited to the specific category of corruption related to the state's financial scope under Article 2 of Law No. 17/2003. Thus, Audit Board of Indonesia can only identify cases of corruption directly linked to the state's finances, namely Corruption Adversely Affecting State Finances under Articles 2 and 3 of Law No. 31/1999 and Embezzlement in Office under Article 8 of Law No. 20/2001.


INTRODUCTION
Supervision is an indispensable activity within a democratic state.It serves as a crucial means of overseeing the functioning of government and the administration of the state, encompassing both the exercise of authority and the allocation of budgets or finances.Explicates that in matters of state governance, supervision and examination are interconnected, with examination forming an integral part of the supervisory process.Examination, in the context of public administration, holds the same significance as an audit. 1 Constitutionally, the Audit Board of Indonesia (Badan Pemeriksa Keuangan or "BPK") is a highranking state institution whose authority is governed by the 1945 Constitution of the Republic of Indonesia.BPK's primary duty is to examine the management and fiscal responsibility of the state.
The responsibilities of BPK are further emphasized in Article 2 of Law Number 15 of 2006 on the Audit Board of Indonesia ("Law No. 15/2006"), which states that BPK is an independent state institution responsible for examining the management and fiscal responsibility of the state. 2Independence here means that BPK can engage in activities related to state financial management and responsibility as long as they do not contravene the provisions of the applicable legislation.Moreover, independence a Master of Law Universitas Brawijaya, Jl.MT.Haryono No. 169, Malang 65145, email: awaludinnurihfan@gmail.com. 1 Theodorus M. Tuanakotta, Menghitung Kerugian Keuangan Negara Dalam Tindak Pidana Korupsi, Salemba Empat, Jakarta: 2009, p. 197. 2 Law Number 15 of 2006 regarding the Audit Board of Indonesia.

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The Correlation Between the Unqualified Opinion by the Audit Board of Indonesia and Anti Corruption Act also signifies that BPK carries out examinations of state financial management and responsibility autonomously, free from external or internal influence, ensuring its impartiality in the process. 3e authority of BPK extends beyond the examination of the management and financial accountability of the central government.It also encompasses the finances of local governments, other state institutions, Bank Indonesia, State-Owned Enterprises, Public Service Agencies, Regional-Owned Enterprises, as well as various other financial management entities.BPK's examinations encompass financial audits, performance audits, and special purpose audits, all conducted in accordance with the standards of state financial audits.The results of these audits are reported to the People's Consultative Assembly (Dewan Perwakilan Rakyat or DPR), the Regional Representative Council (Dewan Perwakilan Daerah or DPD), and Regional People's Representative Councils (Dewan Perwakilan Rakyat Daerah or DPRD), and are subject to follow-up actions as stipulated by their respective jurisdictions.
In the execution of its duties as a financial auditor, BPK is also empowered to issue assessments in the form of opinions to determine the level of appropriateness in financial management for an entity.These opinions are categorized into four levels, including Unqualified Opinion (Wajar Tanpa Pengecualian or "WTP"), Qualified Opinion (Wajar Dengan Pengecualian or "WDP"), Adverse Opinion (Tidak Wajar or "TW"), and Disclaimer of Opinion (Tidak Memberikan Pendapat or "TMP").WTP is granted to entities whose financial management meets the high standards and criteria applied.
Attaining a WTP opinion is a source of pride for any state institution, both at the central and regional levels, as it serves as evidence to the public of their credibility and accountability in managing state finances.
In practical terms, the issuance of an Unqualified Opinion (WTP) does not always prove that the financial management of an institution is indeed sound.Ironically, many instances have been observed where entities receiving a WTP opinion have been implicated in acts of corruption.As an example, the Provincial Government of Papua has consistently received WTP opinions from the BPK for eight consecutive years, from 2014 to 2021. 4 Despite the high level of appropriateness in the financial management of the Papua Provincial Government, Governor Lukas Enembe has faced allegations of corrupt practices.Since 2017, reports from the Financial Transaction Reports and Analysis Center (Pusat Pelaporan dan Analisis Transaksi Keuangan or "PPATK") have pointed to inappropriate financial transactions, and in the same year, the National Police's Criminal Investigation Bureau ("Bareskrim Polri") initiated an investigation into corruption cases related to the management of the Papua Provincial Government's budget from 2014 to 2017, particularly in connection with various projects funded by the Regional Budget (Anggaran Pendapatan dan Belanja Daerah or "APBD").Additionally, in 2022, Governor Lukas Enembe was declared a suspect in a separate corruption case, involving alleged bribery and gratuities related to development projects in Papua Province. 5Another example is the Supreme Court, which received a WTP opinion for its 2021 Financial Report on July 19, 2022, marking the 10th consecutive year of such achievement since 2012. 6radoxically, during this period, the Secretary of the Supreme Court, Nurhadi, was proven to be involved in corruption, as evidenced by a final and binding of court decision (inkrakh). 7Similar cases have emerged in various other institutions, such as the Ministry of Religious Affairs, which received a WTP opinion despite allegations of corruption involving the Minister of Religious Affairs and several other local governments.These discrepancies raise questions about the effectiveness of the WTP opinion as an indicator of genuine financial integrity and accountability within these institutions.
The cases mentioned above underscore a recurring issue: a disparity between the Unqualified Opinion (WTP) issued by the BPK and the actual financial practices of government entities.While the WTP is meant to be awarded to institutions with sound financial management, numerous state institutions receiving WTP opinions from BPK have faced allegations of corruption.This raises questions about the credibility and efficacy of BPK's opinions, which serve both as an auditing and supervisory tool in the realm of state financial management, particularly in the context of anticorruption efforts.
Prior research has also explored the correlation between BPK's WTP opinions and corruption cases.However, these studies have touched on the general relationship between BPK opinions and corruption, without delving into the specific types of corruption.This study aims to provide a more comprehensive analysis by delineating the correlation between BPK's opinions and various forms of corruption, supported by legal foundations and detailed explanations.
The significance of this issue warrants an in-depth investigation into the correlation between BPK's Unqualified Opinion (WTP) and the endeavors to combat corruption.Thus, the title of this study is chosen as "The Correlation between the Unqualified Opinion by the Audit Board of Indonesia and Anti-Corruption Act.".

METHODS
The research methodology employed in this study is normative legal research, which aims to seek coherence and identify the alignment between the subject under investigation and legal norms, as well as the correlation between legal norms and applicable laws and regulations. 8To address the legal issues at hand, the study utilizes a statute approach, involving an examination and correlation of relevant laws and regulations with the legal issues being investigated, especially those governing the authority of the BPK to issue opinions and its correlation with corrupt activities.Additionally, a State revenues; (iv) State expenditures; (v) Regional income; (vi) Regional expenditures; (vii) State/regional wealth managed either by the government or by other parties, including money, securities, receivables, goods, and other rights that can be assessed in monetary terms, including wealth separated within state/regional enterprises; (viii) Property of others controlled by the government in the course of governance and/or public interest; and (ix) Property of others acquired using government-provided facilities.
When these provisions are related to Maarseven's opinion mentioned above, it can be said that these provisions represent the conformity or limitations on BPK's authority in financial oversight.
The term "scope" can be interpreted as a limitation that requires that BPK's oversight of state finances is confined to the scope of state finances as specified in Article 2 of UU Law No 17/2003.BPK is, therefore, not permitted to conduct audits or oversight beyond the realm of state finances.This is a manifestation of the principle of the separation of powers to prevent absolute authority within BPK.
As the sole external auditor, BPK's authority should be delineated to prevent arbitrary actions or exceeding its powers.
When relating these provisions to Maarseven's opinion mentioned above, it can be said that these provisions represent the embodiment of conformity or the limitations on the authority of the BPK in financial oversight.The term "scope" can be interpreted as a limitation that dictates that BPK's oversight of state finances is confined to the scope of state finances as specified in Article 2 of Law No. 17/2003.BPK is not allowed to conduct audits or oversight beyond the realm of state finances.This is a manifestation of the principle of the separation of powers to prevent absolute authority within BPK.As the sole external auditor, BPK's authority should be delineated to prevent arbitrary actions or exceeding its powers.
BPK's audits are divided into three categories, each resulting in different outputs or results:12 (i) Financial Audit: This audit involves an examination of financial statements and results in a report that includes an opinion; (2) Performance Audit: This audit assesses economic efficiency, efficiency, and effectiveness aspects, resulting in a report that includes findings, conclusions, and recommendations; and (3) Special Purpose Audit: This audit, conducted outside of financial and performance audits, leads to a report that includes conclusions.These different types of audits serve distinct purposes and provide varying forms of feedback and evaluation regarding the subject under scrutiny.
An opinion is a professional statement made by an auditor regarding the fairness of the financial information presented in the financial statements based on the following criteria.First, compliance with Government Accounting Standards ("SAP"), this criterion is based on Government Regulation No. 71 of 2010 on Government Accounting Standards.Government Accounting Standards are the accounting principles applied in the preparation and presentation of government financial statements. 13SAP is applied to all government entities, including central and local governments, as

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The Correlation Between the Unqualified Opinion by the Audit Board of Indonesia and Anti Corruption Act well as organizational units within these government entities, as long as these organizational units are required to present financial statements in accordance with relevant legislation. 14cond, Adequate Disclosures: Adequate disclosures are based on Technical Bulletin on National Financial Audit Standards No. 1 of 2012, which states that adequate disclosures are representations of the financial statements and their accompanying notes that have provided information that can affect the sufficiency of users' understanding, comprehension, and interpretation, and that are in line with Government Accounting Standards (SAP).According to the International Standard on Auditing ("ISA") 705, if there is a discrepancy between the disclosures and the requirements in the accounting standards, it is categorized as a misstatement. 15ird, compliance with legislation.When providing an opinion on financial statements, the Supreme Audit Agency (Badan Pemeriksa Keuangan or BPK) aims to gain confidence that the financial statements comply with National Financial Audit Standards (Standar Pemeriksaan Keuangan Negara or "SPKN").In this process, BPK also assesses the government's compliance with legal provisions, fraud, and material misstatements that directly and significantly affect the presentation of financial statements. 16Non-compliance with legal regulations can result in potential losses for the government, administrative irregularities, revenue shortfalls, inefficiency, and ineffectiveness.
Fourth, the effectiveness of the internal control system (Sistem Pengendalian Internal or "SPI").
According to Government Regulation No. 60 of 2008 on the Internal Control System of the Government ("GR No. 60/2008").SPI is an integral process of actions and activities continuously carried out by leaders and all employees to provide adequate assurance that organizational objectives are achieved through effective and efficient operations, reliable financial reporting, safeguarding government assets, and compliance with legal provisions. 17The concept of the Government Internal Control System ("SPIP") encompasses the comprehensive internal control system implemented in the central and regional government environments. 18The SPIP concept adopts several provisions from The Committee of Sponsoring Organizations of the Treadway Commissions ("COSO") Internal Control Framework. 19ere are four types of opinions that can be provided by auditors or the BPK.These include: 20 (1) WTP (Unqualified Opinion), states that the audited entity's financial statements are fairly presented in all material respects, and the financial position, results of operations, and cash flows of the entity are in accordance with generally accepted accounting principles in Indonesia; (2) WDP (Qualified Opinion) , indicates that the audited entity's financial statements are fairly presented, and the internal control system is adequate, but there are material misstatements in some items of the financial statements; (3) TW (Adverse Opinion), This opinion states that the overall audited financial statements are not fairly presented in accordance with generally accepted accounting principles, the internal control system is inadequate, and there are numerous material misstatements in the financial statements; and (4) TMP (Disclaimer Opinion), signifies that the auditor does not provide an opinion on the financial statements because the scope of the audit is not sufficient to form an opinion.
The main basis for these four types of opinions is the fairness of financial statement presentation and compliance with SPKN.
Based on the description above, it can be concluded that BPK, in its audit process, can also detect instances of unfairness in the financial statements of the audited entity that may be related to corrupt practices.This can be supported by one of BPK's evaluation criteria for issuing an opinion, which is compliance with legal provisions.This criterion helps BPK determine the presence or absence of misappropriation or misuse of state finances related to corruption offenses.

The Role of BPK in Combating Corruption
One of the primary objectives of establishing the BPK, as stated in the considerations of the BPK Law, is to achieve the nation's goals of creating a fair, prosperous, and prosperous society.The management and responsibility of state finances require an independent, professional auditing institution to realize clean and corruption-free governance, minimizing the risk of financial losses.The legal framework for the BPK was established to minimize financial mismanagement and to monitor state institutions, both at the central and regional levels, to ensure the proper use of public funds.
The formation of BPK's legal framework serves the purpose of minimizing financial losses in the management of state finances and supports the ideals enshrined in the 1945 Constitution.
Furthermore, it plays a pivotal role in the broader reform agenda, ensuring that government agencies, at both central and regional levels, manage their finances transparently and accountably.This, in turn, aims to prevent corruption, collusion, and nepotism by promoting transparency and accountability in public financial management. 21e Role of BPK in Combating Criminal Corruption can also be found in Article 13 and Article 14 of Law No. 15/2004, where BPK auditors are authorized to conduct investigations to uncover indications of criminal elements.If criminal elements are discovered during an audit, BPK must report this to the relevant authorities as stipulated by the prevailing laws and regulations, no later than one month after the discovery of these criminal elements.This report serves as the basis for further investigations conducted by authorized law enforcement officials in accordance with the applicable laws and regulations.Based on the arguments presented above, it can be concluded that the establishment of BPK as a state institution is intended to contribute to the creation of a clean, corruption-free government environment.BPK's role as a government external auditor can be leveraged by state authorities to engage in anti-corruption efforts.

The Causes of Criminal Corruption in Recipients of WTP
Based on the legal foundations mentioned above, it can be emphasized that BPK is an entity of great importance in the efforts to combat corruption.However, in recent times, many state where an institution or individual receives the WTP designation but is involved in corruption, the factors most relevant to explaining the legal event are "Opportunities" and "Exposures".This is because when there are opportunities or vulnerabilities in the BPK audit process, it can provide fertile ground for engaging in corrupt activities.
The factor of Opportunities can occur because of BPK's position as the external government auditor, which is indeed vulnerable to attacks or deviations in behavior between BPK officials or auditors and central or regional government officials. 25Opportunities that have the potential to arise include collusion aimed at helping to eliminate and manipulate illegal actions against state or regional financial losses by abusing their power (abuse of power).The opportunity for abuse of power can occur because BPK is the only external financial auditor in Indonesia.BPK's extensive authority in providing opinions on the Management and Accountability Report of State or Regional Finances has the potential to lead to an abuse of power.
In line with the factor of Opportunities as explained, the potential for abuse of power is indeed possible and has occurred in practice several times.In the year 2022, the Regent of Bogor was declared a suspect for bribing auditors from BPK West Java Regional Office to obtain an WTP.Based on these cases, it can be concluded that the factor causing corruption in institutions receiving Unqualified Opinions (WTP) is the presence of opportunities (opportunities).The existence of these opportunities also indicates a gap in disclosure (exposures) or audits conducted by BPK because the internal parties within BPK itself during the assessment of financial management's compliance are vulnerable to bribery practices, raising doubts about the credibility of the financial report's fairness assessment.The cause may be the disregarding of regulations during internal control audits. 27Another cause is the agreement between auditors and the relevant officials to manipulate the audit results.It is evident that, besides systemic gaps, there is also the factor of a weak human resource as the implementer.
The Correlation Between the Unqualified Opinion by the Audit Board of Indonesia and Anti Corruption Act The human factor as the implementer does indeed have a significant impact on the quality of governance.The implementation of governance, both at the central and regional levels, can run smoothly and achieve the desired goals if humans, as subjects, are also of high quality.The quality of human resources (HR) is emphasized here.This can be reflected in individual behavior and the culture within the respective institution. 28Regardless, HR is one of the most critical elements in a government institution.Competent and high-quality HR is required to contribute maximally to the institution's goals. 29It can be said that even though one of the goals of establishing BPK is to minimize losses in state financial management, partly due to corrupt practices, this goal will not be achieved without well-supported, quality, and competent HR.
Therefore, both factors that cause corruption within BPK should be minimized.For example, to reduce the factor of opportunities, one can adhere to the audit procedures and techniques.
Additionally, to minimize the factor of exposure-related corruption, rigorous supervision of BPK staff or auditors can be implemented to ensure a high level of integrity.

The Correlation Between BPK Opinions and Corruption Act
Normatively, the eradication of corruption is regulated by Law No. 31 of 1999 concerning the Eradication of Corruption Crimes and its subsequent amendments.This law outlines 30 types of corruption offenses, ranging from minor to major corruption cases, including: 30 (i) bribing public officials, (ii) giving gifts to public officials due to their positions, (iii) civil servants accepting bribes, (iv) civil servants accepting gifts related to their positions, (v) bribing judges, (vi) bribing lawyers, (vii) Regarding the legal cases frequently encountered today, where entities receiving an unqualified Opinion from BPK are later proven to have engaged in corruption, if correlated with the discussions presented above, the result is that corruption cases involving entities that received an unqualified Opinion are related as long as the corruption committed falls under the category directly related to state finances.For example, in the case mentioned in the introduction, involving Lukas Enembe, the Governor of Papua, who also received an unqualified Opinion from BPK, it cannot be said that there is a gap or weakness in BPK's examination because the type of corruption committed was bribery and gratification, which are not, notably, types of corruption directly related to state finances.Similarly, in the case of Nurhadi, the Secretary of the Supreme Court, there is no correlation between the unqualified Opinion received by the Supreme Court and the corruption case that occurred because the corruption committed is not related to state finances.
Based on the analysis presented above, it is evident that the BPK's Opinion remains relevant to the efforts to combat corruption, as the examination of the appropriateness of an entity's financial flows conducted by the BPK can also indicate whether there is any suspicion of the misuse of state finances or corruption.However, the BPK's ability to detect corruption committed by the entities it examines is limited to types of corruption directly related to the scope of state finances.Therefore, it can be concluded that the correlation between the BPK's assessment of the appropriateness of financial statements in the form of an Opinion and the corruption crimes committed should be understood as types of corruption directly related to the scope of state finances.
institutions have received WTP from BPK, yet there are still cases of criminal corruption.There are many factors that can drive individuals to engage in corruption.One theory that effectively explains the factors leading to corruption is the GONE Theory, proposed by Jack Bologna in his book The Accountant's Handbook of Fraud & Commercial Crime.24This theory identifies four main factors contributing to the occurrence of corruption, which are: (1) Greed, related to individual behavior and character, this factor involves the greed or avarice of individuals; (2) Opportunities, linked to institutional conditions, systems, and situations that create opportunities for individuals to easily engage in fraudulent activities; (3) Needs, pertaining to the factors required by individuals to support their livelihood and well-being; and (4) Exposures, associated with the actions or consequences faced by wrongdoers if their fraudulent activities are exposed and proven.In the context of the legal events, 26 Similar cases have also occurred in the Ministry of Village which was suspected of involvement in bribing BPK auditors during the financial audit.Other institutions such as the Meranti Islands Regency were also found to have offered bribes to BPK auditors to obtain an WTP.Bribing auditors from BPK is in contradiction to the provisions of Article 5 paragraph 4 and paragraph 6 of Law Number 28 of 1999 concerning the Clean and Free from Corruption, Collusion, and Nepotism State Administration, which state that every state administrator must carry out their duties without expecting rewards, without engaging in corruption, and not practicing corruption, collusion, and nepotism.Meanwhile, the briber themselves violate Article 5 paragraph 1 letter a or Article 13 of the Law No. 31 of 1999 regarding the Corruption Eradication Law as amended by Law No. 20 of 2021 ("Corruption Eradication Law").
The Correlation Between the Unqualified Opinion by the Audit Board of Indonesia and Anti Corruption Act Under these provisions, BPK has the authority to coordinate with other agencies when criminal elements are identified during an audit.Inter-agency coordination is crucial for a country that follows a system of the separation of powers, such as Indonesia.The primary goal is to facilitate each agency or institution in performing its duties effectively.The coordination that can be carried out by BPK with law enforcement agencies falls under the category of inter-related coordination 22 , which involves several agencies of equal standing but with different functions that are mutually interconnected.
21 Dani Habibi dan Ian Aji Hermawan, "Perluasan Kewenangan Badan Pemeriksa Keuangan Dalam Mengawasi Keuangan Negara Di Lingkup Pemerintahan Daerah", Veritas et Justitia: Jurnal Ilmu Hukum, Vol. 6, No. 2, 2020, p. 339.<https://doi.org/10.25123/vej.v6i2.3512> 32dang Suwanda, "Factors Affecting Quality of Local Government Financial Statements to Get Unqualified Opinion (WTP)of Audit Board of the Republic of Indonesia (BPK)", ResearchJournal of Finance and Accounting, Vol. 6, No. 4, 2015, p.  149.  3 "Ayo Kenali dan Hindari 30 Jenis Korupsi Ini!", <https://aclc.kpk.go.id/aksi-informasi/Eksplorasi/20220524-ayokenali-dan-hindari-30-jenis-korupsi-ini>, [accessed on 10 February 2023].notreporting the accounts of suspects, (xxviii) witnesses or experts withholding information or providing false information, (xxix) someone holding an official secret but not disclosing it or providing false information, and (xxx) witnesses revealing the identity of a whistleblower.These types of corruption are categorized into seven groups, including corruption related to financial losses to the state, bribery, abuse of office, extortion, fraudulent conduct, conflicts of interest in procurement, and gratuities.31Todetermine the correlation between corruption offenses and BPK's WTP opinions, it is necessary to analyze each of the seven groups of corruption offenses and their relevance to BPK's authority to issue opinions, as outlined below.First, corruption is related to financial losses to the state, which is defined as actions carried out by individuals, civil servants, and state officials who violate the law, abuse their authority, opportunities, or means available to them due to their position or status by engaging in corrupt practices.32Corruptionoffenses related to financial losses to the state are governed by Article 2 and Article 3 of Law No. 31/1999, as well as Constitutional Court Decision No. 25/PUU-XIV/2016.It's important to note that both Article 2 and Article 3 of Law No. 31/1999, in conjunction with Constitutional Court Decision No. 25/PUU-XIV/2016, share a common element: "causing financial harm to the state or the national economy".33 Based on this element, corruption leading to financial losses to the state has a direct connection and results in state financial losses.As previously discussed, BPK's audit scope, as defined in Law No. 15/2004, covers financial audits specified in Article 2 of the Law No. 17/2003.Therefore, it can be emphasized that corruption causing financial losses to the state is directly related to BPK's authority to issue opinions because when an Based on these provisions, embezzlement of office that involves the element of money is process.Conflict of interest in procurement tends to lean more toward nepotism behavior, which does not have a direct connection with state finances, BPK's examination, or its Opinion.Seventh, gratification.According to Article 12B paragraph (1) of Law No. 20/2001, any gratification to a civil servant or state official is considered a bribe if it relates to their position and contradicts their duties or obligations.41 Based on this definition, gratification is almost synonymous with bribery, involving the receipt of compensation, whether in the form of money or goods.However, this compensation does not fall within the scope of state finances, which are the subject of BPK's examination for issuing an Opinion.Based on the explanations of the seven groups of corruption crimes mentioned above, which have been analyzed for their correlation with state finances, it is found that the only types of corruption crimes related to state finances are corruption resulting in financial loss to the state, as stipulated in Article 2 and Article 3 of Law No. 31/1999 juncto Constitutional Court Decision No. 25/PUU-XIV/2016, and embezzlement in office as per the provisions of Article 8 of Law No. 20/2001.Consequently, it can be concluded that only types of corruption crimes directly related to state finances can be indicated by BPK, as BPK's authority for examining the management and financial responsibility of the state is limited to the scope of state finances under the provisions of Law No. 29