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Govt to regulate subdistrict funds

29 November 2018

Funding will be disbursed before April when Jokowi seeks reelection Subdistricts will receive different amounts depending on need

The government is expected to issue regulations that will serve as the legal basis for the disbursement of subdistrict funds, from which subdistricts will receive as much as Rp 384 million (US$26,426) each to boost development.

The Finance Ministry is preparing a regulation that will explain the mechanism for the disbursement. Even though the funding is allocated for subdistricts, each subdistrict will receive it from the regency administration and in two stages.

The Finance Ministry’s director for equalization funds, Putut Hari Satyaka, said that in the first phase, which will be between January and May, the central government would transfer half of the subdistrict funding to the regency administrations after the latter submitted details about the plans for spending the money.

The government will transfer the remainder of the subdistrict funds in the second phase, which will be between May and September, after the regency administrations have submitted reports on the realization of the subdistrict funds.

Meanwhile, the Home Ministry will also issue a regulation detailing the use of the subdistrict funds, which may only be used for two purposes, namely improvement of subdistricts public infrastructure and community empowerment.

The government allocated Rp 3 trillion for subdistrict funding in the 2019 state budget for 8,212 subdistricts in 410 cities or regencies.

Each subdistrict will receive different levels of funding depending on need. The government has put a higher allocation of Rp 384 million for each subdistrict in need of improvements in public services. These amount to 625 subdistricts, according to Finance Ministry data.

Meanwhile, each of the 4,782 subdistricts that only need slight improvements will receive Rp 370.14 million and each of the 2,805 subdistricts that already have good public service infrastructure will receive Rp 352.94 million.

Critics have suggested the government has decided to disburse the funds before April because President Joko “Jokowi” Widodo is seeking reelection next year.

Regional Autonomy Watch (KPPOD) executive director Robert Endi Jaweng warned the government to ensure the subdistrict funds are disbursed continuously in the future to maintain development.

Putut, however, could not guarantee the subdistrict funds would be consistently allocated in the future as the state budget was the product of deliberation between the government and the House of Representatives and, therefore, the fate of the funding in the future would depend on the decision of both sides.

“I cannot answer if [the subdistrict funding] will continue or not [in 2020],” said Putut, while implying that the government intended the allocation of subdistrict funds to recur in future budgets.

The subdistrict funds’ dis- bursement will be evaluated by the central government, while the amount will be gradually decreased as the funds are allocated to assist regional administrations in fulfilling the mandate set in the Regional Administration Law.

Article 230 of the law stipulates that cities or regencies should allocate 5 percent of their regional budget (APBD) — after deductions from the special allocation fund (DAK) transfers — to subdistricts if there are no villages in the administrations’ territories.

Meanwhile, if the cities or regencies have villages within their boundaries, the allocated subdistrict funds should match the lowest amount of village funding received by the villages.

Putut added that the government would not transfer funds to the cities or regencies if their draft of the APBD did not meet the minimum requirements as stipulated in the Regional Administration Law, even after calculating the inclusion of the subdistrict funds.

While recognizing the government’s good intentions with the subdistrict funding allocation, Robert Jaweng said the disbursement of the funds should be closely monitored, given that many regional administrations had failed in the past to accommodate the subdistrict funds as per the Regional Administration Law.

The Home Ministry’s director for equalization funds facilitation, Mochamad Ardian Noervianto, said the district heads as well as the regents or mayors would closely supervise the disbursement of the funds, while the governors would also watch over the funds’ disbursement as the central government representatives in the regions.

Source: Jakarta Post, 29 November 2018