Kayaknya ada tanda-tanda baik dalam public finacnial management negeri
kita???
B. Dwiagus Stepantoro
Editorial: Expediting budget execution
The Jakarta Post | Thu, 01/14/2010 9:20 AM | Opinion
There is indeed no longer any reason to delay the execution or
disbursement of the government investment budget, as President Susilo
Bambang Yudhoyono asserted early last week when presenting thousands of
2010 budget spending warrants worth Rp 1,047 trillion (US$110 billion)
to ministers, heads of state institutions and provincial governors in
Jakarta.
The legal and regulatory frameworks for virtually all aspects of public
financial management - budget formulation and execution, public
procurement of goods and services and post-audit - have all been
reformed to improve the effectiveness and efficiency of public-sector
spending.
The budget authorization or warrants are a breakthrough in the process
of budget disbursement, especially for the investment budget, which in
the past suffered the longest delays. The warrants already stipulate the
project manager, treasurer and procurement officer for each investment
project, thereby speeding up the bidding process.
Yet another remarkable advance was the establishment of the National
Public Procurement Agency, in charge of setting nationwide standard
procurement procedures, including standardized bidding documents, and
the gra-dual implementation of electronic public procurement to enhance
market transparency. Last week's delivery of the budget authorization
documents itself was the fastest ever made for annual state budget
implementation.
The 2009 fiscal year, which ended last month, still left behind Rp 38
trillion (US$3.8 billion) or more than 20 percent of the investment
budget for that year unspent due to various problems related to
inadequate public budget management and institutional spending ability.
But the unrealized investment budget was smaller than the previous
years.
In the past, inadequate spending capacity of the line ministries and
poor budget management on the part of regional administrations, which
together account for around 50 percent of the national budget volume,
resulted in almost 50 percent of budgeted capital expenditures being
spent in the last quarter of the fiscal year. Budget spending (on
investment) started slowly, then accelerating towards the end of the
year, thereby causing an adverse cycle at the expense of spending
quality.
But the government seems quite serious now about front-loading budget
execution by early delivering of all budget authorization documents so
that preparations for project implementation, including tenders, can be
expedited.
Quick and efficient budget disbursement is most imperative as Indonesia
urgently needs more and better spending on its basic infrastructure,
such as transport and power-generation infrastructure, and public
services. The 2010 budget is also conducive for infrastructure
development because this fiscal year, for the first time, applied a
performance-based budget system and medium-term expenditure framework to
investment budget, instead of an annual cycle.
Multi-year budget appropriations for multi-year projects facilitate
carry-over budget allocations, unlike the previous state budgets which
were tied only to one-year budget appropriation. For example, the Rp 38
trillion carried over from the 2009 investment budget cannot
automatically be disbursed this year for the projects for which the
appropriations were originally intended.
Moreover, the introduction of a performance-based budget system will
contribute to further integrating the planning and budgeting processes.
In previous years, the decision-making processes between line
ministries, the directorate generals of budget and treasury, the
national planning agency and the parliament focused on input composition
of the budget, rather than compliance of the spending programs with
government priorities.
Jeremy Stringer
Manager, Local Governance
Decentralisation Section
AusAID, Jakarta
mob: +62 (0)812 104 1590
email: [email protected]
<mailto:[email protected]>
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