A BUMD SPI is the Internal Supervisory Unit, the company's internal oversight body that must be established at every regional government-owned enterprise (BUMD) under Article 79 of PP 54/2017. The SPI is led by a head who is responsible to the president director. Its duties are to examine operations and finance, assess controls, give improvement advice, and monitor follow-up.
This article is written for directors, the Supervisory Board, Commissioners, and heads of SPI at Perumda and Perseroda. The articles cited were checked against the text of Government Regulation (PP) 54/2017 as of November 2026. The government is preparing an amendment to this regulation, so verify again before using it as the basis for a decision.
What Is the Legal Basis for a BUMD SPI?
The main basis is PP 54/2017 on Regional Government-Owned Enterprises, Chapter VI, Part One. Implementing rules in each region are usually found in a regional regulation or a regional head regulation.
| Article | Provision |
|---|---|
| Article 79 paragraph (1) | An SPI is established at every BUMD as the company's internal oversight body |
| Article 79 paragraph (2) | The SPI is led by a head who is responsible to the president director |
| Article 79 paragraph (3) | The head of the SPI is appointed after considering input from the Supervisory Board or Commissioners |
| Article 80 | SPI duties: examination and assessment, information on examination results, monitoring follow-up |
| Article 81 | Reports to the president director with copies to the Supervisory Board or Commissioners |
| Article 82 | Examination results are discussed in a directors' meeting and the directors must take the necessary steps |
| Article 83 | The SPI must keep other organizational units running smoothly in their duties |
| Articles 84 and 85 | The Supervisory Board or Commissioners form an audit committee that assesses the audit results of the SPI and external auditors |
How Many BUMDs Have No SPI Yet?
The Ministry of Home Affairs reported 1,091 BUMDs in July 2025 with 678 BUMDs profitable, 300 loss-making, and 113 yet to report. The ministry also stated that 342 BUMDs have no SPI yet. The figure of 342 was given in July 2025 and cited again in June 2026, so it may not have been updated.
For BUMDs in this group, Article 79 paragraph (1) means establishing an SPI is not optional. Article 92 paragraph (5) also requires good corporate governance to be applied no later than two years after the BUMD is established.
What Are the Duties of a BUMD SPI?
| Duties under Article 80 | What the work looks like |
|---|---|
| Assisting the president director in examining operations and finance, assessing controls, management, and their implementation, and giving improvement advice | Preparing the audit plan, work program, working paper, and recommendations |
| Providing information on examination results or the results of its duties to the president director | Audit reports and presentations of key findings |
| Monitoring follow-up on reported examination results | Follow-up monitoring with deadlines and proof of completion |
Who Does a BUMD SPI Report To?
The SPI is responsible to the president director. The reporting line works like this:
- The SPI submits reports on its work to the president director, with copies to the Supervisory Board or Commissioners (Article 81 paragraph 1).
- The SPI may give information directly to the Supervisory Board or Commissioners on those reports (Article 81 paragraph 2).
- The president director delivers the examination results to all members of the board of directors for follow-up in a directors' meeting (Article 82 paragraph 1).
- The board of directors must pay attention and promptly take the necessary steps (Article 82 paragraph 2).
The line to the Supervisory Board or Commissioners is important for protecting independence, especially when findings involve the directors. Professional standards also stress this in the Global Internal Audit Standards under Standard 7.1 on organizational independence.
What Is the Difference Between the SPI, the Supervisory Board, and the Audit Committee?
| Organ | Position | Role in audit |
|---|---|---|
| SPI | Inside the company, responsible to the president director | Conducts examinations and monitors follow-up |
| Supervisory Board or Commissioners | The BUMD's supervisory organ | Gives input on appointing the head of the SPI and receives copies of reports |
| Audit committee | Formed by the Supervisory Board or Commissioners | Assesses the conduct and results of audits by the SPI and external auditors |
| External Auditor | Outside the company | Examines according to the assignment and applicable standards |
Article 85 confirms that the audit committee helps ensure the effectiveness of internal control and of the external auditor's work. So the audit committee does not replace the SPI.
How Do You Establish a BUMD SPI?
PP 54/2017 sets the obligation but does not detail the technical steps. The order below is common practice. Adjust it to the local regional regulation.
- Set the SPI's position in the organizational structure with a line of responsibility to the president director.
- Appoint the head of the SPI after considering input from the Supervisory Board or Commissioners.
- Prepare the SPI charter covering its purpose, authority, scope, and reporting.
- Secure enough auditors based on the company's size and risks.
- Map risks and prepare the annual audit plan using risk-based audit.
- Set work templates: audit program, working papers, finding format, and report format.
- Create a follow-up mechanism with clear owners and deadlines.
What Does a BUMD SPI Charter Contain?
PP 54/2017 does not require a document called a charter. However, the Global Internal Audit Standards (Standard 6.2) require the chief audit executive to prepare a charter, and this document makes it easier for the directors and the Supervisory Board to agree on the SPI's role. Common contents:
- Purpose and commitment to standards
- Position and reporting line
- Scope and types of services
- Duties, responsibilities, and authority
- Independence, objectivity, and the ban on dual roles
- Auditor requirements and code of ethics
- Reporting and follow-up monitoring mechanism
- Periodic evaluation of the charter
An example of its structure in another setting can be seen in the internal audit charter for a university SPI.
A twelve-part charter framework, from the basis of preparation, position, duties, authority, independence, and reporting to charter evaluation, referring to PP 54/2017. Adjust the yellow sections to fit your BUMD. Fill in the form below and the file downloads right away. The template is in Bahasa Indonesia.
What Areas Does a BUMD SPI Usually Examine?
The focus depends on the type of business. The table below is a starting example, not a mandatory list.
| Type of BUMD | Example examination areas |
|---|---|
| Drinking water (PDAM or Perumda) | Meter reading, billing, customer receivables, water loss, assets, procurement |
| Markets and asset management | Rent and levy revenue, tenant contracts, asset maintenance |
| Transportation | Ticket revenue, fleet maintenance, spare parts procurement |
| Trade and food | Inventory, purchasing, sales, receivables |
| Finance (regional development banks, BPRs, guarantee companies) | Follows the OJK rules for the sector, for example BPR internal audit |
General areas that are almost always relevant are procurement, cash, assets, personnel, and compliance with standard operating procedures. PP 54/2017 also names oversight, procurement, and goods management as aspects that a BUMD's standard operating procedures must cover.
How Can a Small SPI Stay Effective?
Limited staff is a common condition, so work needs to be selected based on risk. Put areas with large amounts of money, repeat findings, or many customer complaints first. Use the same templates for every assignment, and make follow-up monitoring a routine agenda item.
As findings grow in number, Excel becomes hard to use for seeing the current status. When to consider switching is covered in Excel audit vs audit software. For BUMD SPI units, an overview of how it applies is on the page Audithink for BUMD.
FAQ About BUMD SPI Units
Must every BUMD have an SPI?
Yes. Article 79 paragraph (1) of PP 54/2017 states that an internal supervisory unit is established at every BUMD.
Who is the head of a BUMD SPI responsible to?
To the president director, under Article 79 paragraph (2). Reports on its work are copied to the Supervisory Board or Commissioners.
Who is involved in appointing the head of the SPI?
The appointment is made after considering input from the Supervisory Board or Commissioners, under Article 79 paragraph (3).
Must a BUMD have an audit committee?
Article 84 paragraph (1) states that the Supervisory Board or Commissioners form an audit committee and other committees. Also check the local regional regulation for implementing provisions.
Must a BUMD SPI have a charter?
PP 54/2017 does not mention it specifically. However, a charter is recommended because the Global Internal Audit Standards require one and the document clarifies the SPI's authority.
Conclusion
The BUMD SPI is an obligation with a clear legal basis. What matters is how it is run. Start with a clear position and charter, a risk-based audit plan, then follow-up that is monitored. Schedule an Audithink demo if you want to see it managed in one system.
