The Urgency of the Implementation of Good University Governance on
Financial Government in Universitas Indonesia
Fadel Muhammad
Bakal Calon
Majelis Wali Amanat Universitas Indonesia Unsur Mahasiswa 2015
A good organization system is a system that can embody the basic
objective of organization establishment. Essentially, an organization was formed
for particular purposes. Youth organization for example, formed to be a place for
youth in certain surroundings to actualize themselves. That youth organization can
be considered as successful when the initial purpose is fulfilled. But to be
remembered that there are a lot of things to be done before the purposes are
accomplished. I believe that the most important thing is that the organization is
obliged to create a system that allows it to be managed in a responsible manner,
solely to achieve the initial purpose of its establishment.
Post-reform era, where human rights are more guaranteed in the
Constitution, the public as one of the stakeholders, have more freedom to express
opinions. One of the opinions that have a potential to emerge is the criticisms of
the government to implement good governance. Not only for government,
criticism is also directed to agencies that responsible to perform the function of
the state. Two function of the state that often criticized is the sector of health and
education services. This criticism is very reasonable and should be responded by
the government and must be a means of introspection in order for a better service.
Talking about governance will be closely linked with the principle
embodied in the great concept of good governance. There are several definitions
of good governance, but I agree with the statement from World Bank, that good
governance is the implementation of development management that solid,
responsible and in line with democracy. In addition, the United Nations
Development Program, adding that good governance can only be created if there
were constructive synergism between the state, private sector, and public.1 From
both of the opinion above, I conclude that good governance in general is a
1
LAN and BPKP, 2000
synergy between the state, private sector, and the public, that perform the
development management that is solid, responsible and in line with democracy.
When a state taking a decision to implement the principles of democracy
in its entirety, then the state should be prepared with the implication down to the
simplest grade. For example, the implementation of the general elections of a
country. But in fact, democracy is way more complicated. We need to realize that
democracy is closely related with public participation. This concept emerged with
the aim to reduce the potential that would be done by authoritarian
leader. Therefore, the concept of good governance shall ensure stakeholder
participation in every decision-making.
In principle, the concept of governance is able to be applied to any form of
organization. With this principle, the state is only one example of the many forms
of organization. This concept tell more than just fulfillment of purposes, but how
to control the purposes-based democracy.
2
Therefore, this concept is
accommodating anyone who is involved in the implementation of the
organization.
Nowadays, higher education institutions have become a very important
agency. Advancement of higher education of a state can be measured by the
progress of higher education institutions located in the state. The Economist said
that “Universities are among the most important engines of the knowledge
economy. Not only do they produce the brain workers who man it, they also
provide much of its backbone, from laboratories to libraries to computer
networks.”3 With such hypothesis, it is obvious that higher education is indeed an
important position. Not only in the fulfillment of demand for workers, have I
mentioned before that the presence of higher education institutions is an
obligation of the state to educate the nation.
Back to the concept I have suggested in the beginning, an organization is
considered successful if it is able to achieve the basic goals through the
implementation of system that is good and responsible. It can be concluded that
2
John Graham, THE BRAIN BUSINESS : A Survey of Higher education, Sept 10, 2005,
3
The Economist, The Brain Business: A Survey of Higher Education, Sept 10, 2005
page 2.
higher education institutions can only fulfill its original purposes if it uses a good
system as well. With the sustained of development of the needs, then comes the
concept of good governance, specifically higher education institutions, namely the
concept of good university governance.
The concept of good university governance, accommodate the needs of
higher education organization in carrying out its essential functions. University of
Toronto through its governing council, issued a special policy regarding the
principle of good governance. In my opinion, the general principles in the policy
are possible to be implemented in Indonesia. The general principles are:4
a. The fundamental autonomy of universities, coupled with the essential
responsibility for public accountability;
b. The need to respect the academic mission of excellence in teaching and
research;
c. The importance of ensuring that academic freedom and responsibility are
respected;
d. The need to be seen to be accountable through transparency to all parties
interested in and supporting the University;
e. The desire for meaningful and objective stakeholder participation in
governance; and
f. The diversity and broad representation of governors.
Based on the principal above, a good university governance concept is not
only able to be implemented in academic aspect only. It is also relevant with the
implementation of the university function in nonacademic aspect. I contend that
the implementation of nonacademic aspect shall refer to the doctrine of
substantive justice, which does not solely apply procedural fairness. The concept
of substantive justice is the most suitable because justice is born of the real
situation occurring in the public. This concept will only be achieved when
stakeholder participation is guaranteed in every decision-making process.
Furthermore, I will elaborate more about good university governance concept and
its application in financial governance of Universitas Indonesia (UI).
4
Governing Council University of Toronto, Principles of Good Governance, hal. 2
Financial Governance of Universitas Indonesia: Nowadays
Since the promulgation of the Rector Decree of Universitas Indonesia No.
226A/SK/R/UI/2008 concerning the Procedure of Financial Governance
Integration at Universitas Indonesia, the integrated system of financial governance
at the university has commenced. Basically, this integrated financial system or
commonly called as centralization is an initial step to reunify the Universitas
Indonesia as a single entity, not a separate entity consisted of self-supporting
faculties.
As the era of University as State-Owned Legal Entity (PT-BHMN) came
to an end, the status of UI met uncertainty until the emergence of Higher
Education Act No. 12 of 2012 which consequently starts the era of Public
University as Legal Entity (PTN-BH). This act particularly orders the enactment
of Government Regulation No. 68 of 2013 as the Statute of Universitas Indonesia.
Furthermore, the Statute requires the making of Board of Trustee (Majelis Wali
Amanat) Regulation No. 4 of 2015 concerning The Bylaws of Universitas
Indonesia. Hence, the Rector Decree No. 226A is at the end of its validity period
as the Bylaws through Articles 95 paragraph (2) states the making of a renewed
rector decree concerning financial governance of UI.
At this time, The Bylaws becomes the latest ground for the financial
governance applied at UI. Not much different with the prior ground, The Bylaws
states that the financial governance is held accountable through an integrated
system (Article 92 paragraph (3)). Basically, I have the same view regarding the
ground principals in The Bylaws, yet one thing that has to be overseen is whether
the integrated system has fulfilled the substantive principles of justice.
Beside The Bylaws, the other ground principals of UI can be found in
Strategis Plannings 2015-2019. Not only financial aspect, the plan also regulates
that the integration process must be operated on the whole aspects, including the
infrastructure supports of academic and nonacademic. Based on the rules, I
contend that the policy makers at University Administration Center (PAU) has
veritably conceded that an integration is inevitable. Therefore, the adjacent
endeavor is to bring the motion of integration towards the work units under PAU
to an uniformity.
Moreover, the law enforcement in implementating the financial
governance needs an attention as well. Up to today (15/10), there is still no
promulgated decree of rector related to the implementation of mandate given by
Article 95 paragraph (2) of The Bylaws.5 Considering the fact that The Bylaws
has been in force for four months, the matter should be the main focus of the
university officials under the command of Vice-Rector II who is responsible for
the field of financial, logistic, and facility.
In reality, the issue is not over yet, due to the work unit of UI is on
autopilot condition. The problem emerges as the Rector Decree concerning the
Main Duties and Functions of the Work Unit has not been formulated yet. As said
by the Head of The Academic Quality Assurance Board, Prof. Dr. Drg. Hanna H.
Bachtiar-Iskandar, Sp.RKG(K), the problem has been significantly impeding the
works of the units. 6 In my opinion, while facing the aforementioned condition, UI
should fulfill its obligation to evaluate the governance as a whole, not only the
financial aspect. In addition, the Planning, Development, and Control Body of the
university should prepare actions to confront the more awful condition ahead,
considering the prior aim of bringing synergy and continuity to the work units of
UI.
As reviewed in various reports regarding financial governance of UI, the
integrated system and financial centralization are still highly affected by the
sectoral ego of the faculties. In my opinion, this is quite predictable, considering
the system is being implemented lethargically: in spite of all the funds is centrally
collected at PAU, each of faculties has their own allocation. In the other side, the
Rector has an authority to manage and optimally utilize the funds and assets for
the persistence of the university as stated on Article 36 paragraph (1).g of The
Statutes.
At this current financial system, there is a mechanism of revenue
allocation distributed to PAU and faculties. For instance, the Operating Expense
5
Based on research to Badan Legislasi dan Layanan Hukum UI.
6
Based on research to Badan Penjaminan Mutu Akademik UI.
of Education (BOP) is divided into two: 75% owned by faculties and 25% owned
by PAU. For the revenue from nonacademic expenses (non-BP), the division is
95% owned by faculties and 5% owned by PAU. That kind of mechanism depicts
decentralized system pretexting as cordiality, not a centralized system.
Furthermore, the situation at some faculties said so. As an example is the Faculty
of Medicine (FK) whose revenue is huge and has well-mantained financials that
makes the faculty operates optimally, but on the contrary, the new developed
Faculty of Pharmacy does not receive proportional allocation from PAU. It can be
concluded that the concept of cross subsidization is not well-applied which
significantly evokes discrepancy. Therefore, in my opinion, the form of integrated
system and centralization that are currently applied at the UI is not genuine and
actual.
Financial Governance of Universitas Indonesia: Henceforward
Referring to the introduction of this article, the author will analyze some
of the issues that are seemingly turn out to be the roots of the defective
implementation of the integrated system and centralization.
First, the participation of faculties in the implementation of integration.
Participation is eminent in any decision-making processes, primarily concerning
the matter of funding. It is essential to prepare strategic steps to reassure the
faculties that the fund they periodically collect is needed by other faculty,
especially those whose financial is unsound. However, the minimum participation
resulted in the emergence of dubiety from faculties of the ability of UI in
managing the fund generated by faculties. In my opinion, the distrust between the
university and faculties has become a hindrance for the process of integration. The
distrust brings us to the second poin that is transparency of financial governance
at UI.
Secondly, regarding transparency, I have written a particular article about
UI and its obligation in managing public information based on Public Information
Disclosure Act No. 14 of 2008 (UU KIP). This act forces public agencies to be
responsible directly to the public as the information user. This relates to Article 1
point 3 UU KIP which states:
“Public Agency means an executive, legislative, judicative and other
agencies whose function and main duties are related to the organizing of the
state, where part or all of its funds originate from the state budget and/or the
regional budget, or a non-governmental organizations that part or all of its
fund originate from the state budget and/or the regional budget, the
contribution from the people and/or from overseas sources.”
With such rules, I conclude that UI is included as public agency that also has
the responsibility to the public as the information user. It is regrettable that
there is number of files containing public informations are not widely
publicized by UI. It means UI has not indicated its utmost intention to become a
transparent agency, moreover as an example is the unvailability of Annual
Report of UI on the internet. This matter is a challenge for the process of
centralization which its main core is the public trust in accountability of the UI
as an institution.
After the efforts UI has made to increase the faculties participation in
policy making and conducting public transparency, the next step is to ensure
that the fund equalization is implemented based on necessity. It will be an
initial step for UI to move forward as a single entity, not only based on the big
names of some well-off faculties. As a single entity, UI shall support all the
work unit under the university proportiaonally. The rectorate plays a great role
in supporting these ideal notions. If UI is indeed seen as an entity, rector should
act as a leader, not only a coordinator. Thus, rector shall ensure that all faculty
have the same ideal notions, it is the whole improvement of the governance of
UI.
Referring to the concept of the Board of Trustees or Governing Council7 in
some countries, the Board of Trustees (MWA) plays a greater role in the
supervision of financial governance UI as an independent administrative entity. 8 It
is embodied in the duties and obligations of MWA set forth in Article 25 of The
Statutes. One of duties and obligations relating MWA is to conduct a monitoring
7
Meredith Edwards, University Governance: A Mapping and Some Issue, University of
Canberra, page 17.
8
Sofian Effendi, Paradigma Salah tentang PT BHMN, page 1.
to the financial condition and to provide recommendation to rector regarding the
management of UI, as well as the implementation of the legislations.
The conclusion is the concept of good governance should optimally
applied at UI as a single entity. As I state in the beginning of this article, the
ultimate goal of an organization can only be created from an accountable system
and enable to be managed, so as Universitas Indonesia. At some time in the past
when I got an opportunity to ask why there are so many problems regarding the
adherence towards system at UI, one of bureaucrats in PAU simply answered:
"Everyone here is a smart person. That fact makes them become unruly."
Is not it such an irony?