Local Governance Forum: “Is it possible to revoke DAU postponement sanction?”

June 15, 2020

2020.06.09.LGF_Penundaan-DAU

Local Governance Forum

“Is it possible to revoke DAU postponement sanction?”

PATTIRO recommends the Ministry of Home Affairs to revise policies related to the handling of Covid-19 with the Unexpected Expenditure (BTT) mechanism, by opening the budget marking mechanism option for Covid-19. This recommendation was conveyed by PATTIRO in the Local Governance Forum titled “Is it possible to revoke DAU postponement sanction?” on Wednesday, May 20, 2020, held online and organized by PATTIRO.

PATTIRO Director Maya Rostanty stated that this recommendation was proposed after monitoring 19 provincial/city/district governments that received sanctions in the form of postponement of General Allocation Fund (DAU) distribution.

“Using Survey Monkey, we monitored areas affected by the DAU postponement sanction. This monitoring was carried out to respond to the policy of sanction in the form of postponement in the distribution of 35% of the DAU by the Ministry of Finance, to 380 provinces and cities/districts, as stated in Decree of the Minister of Finance Number 10/KM.7/2020 concerning Postponement of Distribution of DAU and/or Revenue Sharing Funds towards Regional Governments that Fail to Make Regional Budget Adjustments for  Fiscal Year 2020″, Maya said.

Through a survey, it was found that the main obstacle faced by local governments in submitting reports in accordance with the standards was because they had difficulty coordinating with the Regional Apparatus Organization (OPD), because the OPDs felt their budget was “diverted” even though they have performance targets to be achieved. This is due to the local governments being instructed to manage the Covid handling budget through the Unexpected Expenditure mechanism (BTT) through the Minister of Home Affairs Instruction No. 1 of 2020 concerning Prevention of Spread and Acceleration of Covid Handling issued on 2 April 2020.

“During the Covid-19 pandemic, the regional governments found it difficult to coordinate with the Regional Apparatus Organizations to adjust the regional budget in handling Covid-19 in the regions, plus there were no clear technical guidelines provided by the central government,” added Maya.

“To overcome this obstacle, an option other than the BTT mechanism is needed, including a budget marking mechanism for Covid-19. By using a budget marking mechanism, the allocation remains in the relevant OPD, but the OPD is asked to revise activities to contribute to efforts to deal with Covid-19″, Maya added.

Responding to the results of monitoring submitted by PATTIRO, the Head of the DAU Sub Directorate of the Ministry of Finance, M. Nafi, said that in handling Covid-19, policy breakthroughs need to be made, one of which is refocusing APBD expenditures to focus on handling Covid-19.

“With the Covid-19 outbreak, there has been an economic slowdown and a decline in people’s purchasing power. Therefore, the government considers it necessary to make a policy breakthrough. At present there are at least three policy breakthroughs made, namely the adjustment of the allocation of Transfer to Regions and Village Funds (TKDD) through Perpres 54/2020 to be diverted to centralized handling of Covid-19, refocusing TKDD to be used for handling Covid-19, and refocusing APBD Expenditures to focus on handling Covid-19″, Nafi said.

M. Nafi added that refocusing on APBD expenditure to focus on handling Covid-19 was regulated in Minister of Home Affairs Decree and Minister of Finance Decree No. 119/2813/SJ/2020 and 177/KMK.07/2020. In these regulations, the Heads of Regions must make adjustments to regional expenditure through: 1) Rationalization of employee expenditure (additional allowances, honorarium, overtime pay); 2) Rationalization of goods/services expenditure of at least 50% (official travel, consumables, printing, uniforms, maintenance, vehicle maintenance, rental, office services, consulting, experts, F& B for meetings, outreach, etc.); and 3) Rationalization of capital expenditure of at least 50% (procurement of vehicles, machinery/heavy equipment, land, building/room renovation, construction of new buildings, and others).

Related to the implementation of this regulation, the government is aware of commitments of regions that have not fully implemented the budget adjustment.

“Until 18 May 2020, there were 148 regions that were imposed with sanctions in the form of postponement in the distribution of DAU by 35%, a smaller number than the previous 380 regions. The efforts made by the Ministry of Finance are to provide online consultations through the call center or WhatsApp group help desk of the Directorate General of Fiscal Balance, if there are further questions or reconfirmations,” Nafi added.

The Head of Sub-Directorate of DBH and DAU Facilitation of the Directorate General of Regional Financial Development of the Ministry of Home Affairs, Sofyan, responded that by refocusing  APBD expenditure, the Regional Government could optimize unexpected expenditures.

“Through refocussing, the Regional Governments can optimize unexpected expenditures for Covid-19 handling activities, and own initiatives of the Regional Governments to identify official travel expenditures that are considered not so important at this time,” said Sofyan.

In closing the discussion, Maya restated the importance of the Central Government to intensify the technical assistance process to the regional governments in reallocating and refocusing the APBD. (FM)

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