The passing of the Village Law (UU Desa) brings fresh air to villages in Indonesia because more funds will flow to villages, so it is hoped that residents in the villages can be more prosperous. Article 72 of the Village Law states that the village budget is set at a minimum of 10% of regional transfer funds in the State Revenue and Expenditure Budget (APBN). Using the assumption that regional transfer funds in the 2014 APBN amounted to Rp. 592 trillion and the number of villages was 72,944, then on average each village would receive more than Rp. 800 million/year. Minister of Home Affairs (Minister of Home Affairs) Gamawan Fauzi stated that the implementation of the budget allocation for the village can only be carried out for the 2015 State Budget, because the Government needs one year to prepare a Government Regulation (PP) as a derivative of the village law.
Behind the euphoria of the passage of the Village Law, the Center for Regional Information and Studies (PATTIRO) sees that there are many things that must be carefully studied by the central government in drafting PPs. One of them is how the mechanism for managing the village budget is quite large. The benefits of using the village budget must be felt by the village community, so the government must carefully regulate the proportion of village budget use. For example, it must be regulated what maximum percentage of the village budget may be used as employee costs or salaries of village officials, what minimum percentage must be used for improving public services, and what minimum percentage is for empowering the poor. This is important to avoid using the village budget to become mere bankroll by unscrupulous village officials.
In addition, based on Law No. 17 of 2013 concerning State Finances, Law No. 15 of 2004 concerning Examination of State Financial Management and Responsibility, and Law No. 15 of 2006 concerning the Audit Board of Finance (BPK), because it originates from the APBN, the Village Budget Funds are stated in article 72 of the Village Law is part of the State Finances so that reports on its use must be audited by the BPK. Meanwhile, PP No. 72 of 2005 concerning Villages explains that the obligation to make reports on governance rests with the Village Head.
Based on the regulations mentioned above, if the Village Head submits a Village Budget in accordance with Article 72 of the Village Law and is approved for disbursement, then as with the Regional Work Unit (SKPD) or agencies in the Regional Government (Pemda), the Village Head must report and account for the use of village budget funds to BPK. In fact, so far, village heads have not been audited by the BPK because they do not use funds directly from the APBN, so there are concerns that they do not have the capacity and ability to face a BPK audit.
Concerns that the existence of a BPK audit and being entangled in legal cases will make Village Heads not submit Village Budgets for fear that they will become suspects of corruption due to errors in reporting. It is possible that the village heads will ask the government to omit or exclude the BPK audit from their report. Then, should the BPK’s report and audit obligations on these village heads be eliminated or excluded?
PATTIRO is of the opinion that the government, especially the Ministry of Home Affairs, should not favor village heads by eliminating or excluding BPK audits of the use of the Village Budget as stated in Article 72 of the Village Law. The omission and exception of the BPK audit on the use of Village Budget funds will increase the chances of corruption. What the Government must do, especially the Ministry of Home Affairs, is to increase the capacity and capability of village heads, so that they are aware of their rights and obligations regarding the submission and use of Village Budget funds, and are able to make reports and be accountable to BPK.
Concerns that the existence of a BPK audit and being entangled in legal cases will make Village Heads not submit Village Budgets for fear that they will become suspects of corruption due to errors in reporting. It is possible that the village heads will ask the government to omit or exclude the BPK audit from their report. Then, should the BPK’s report and audit obligations on these village heads be eliminated or excluded?
PATTIRO is of the opinion that the government, especially the Ministry of Home Affairs, should not favor village heads by eliminating or excluding BPK audits of the use of the Village Budget as stated in Article 72 of the Village Law. The omission and exception of the BPK audit on the use of Village Budget funds will increase the chances of corruption. What the Government must do, especially the Ministry of Home Affairs, is to increase the capacity and capability of village heads, so that they are aware of their rights and obligations regarding the submission and use of Village Budget funds, and are able to make reports and be accountable to BPK.
Apart from the two problems mentioned above, there are many other problems that may arise with the ratification of the Village Law. For example, there will be more and more proposals for expanding villages, or how to synchronize planning and budgeting for funds that enter the village so that they are more beneficial for the village community. For this reason, so that the implementation of the Village Law goes according to the purpose and intent of its stipulation, PATTIRO asks the Government to be careful and thorough, as well as be careful in preparing and issuing Government Regulations (PP) as derivatives of the Village Law. The synchronization of financial planning that goes into the village must also be managed properly so that it can bring more prosperity to the village community.
For this reason, as a non-governmental organization that encourages the realization of good, transparent and fair local governance for the social welfare of the community, PATTIRO will strive to continue to provide input to the Government, especially in the preparation of PP as a derivative of the Village Law.
Jakarta, December, 20 2013
Sad Dian Utomo | PATTIRO Executive Director
saddian@pattiro.org | 0812 800 3045
Contact Person: Rohidin Sudarno | Public Service Specialist
roi@pattiro.org | 0813 1053 9884
