By learning from the problems this year and in preceding years, improvements would be made next year by encouraging regional administrations to execute early tenders.
By
KOMPAS TEAM
·4 minutes read
JAKARTA, KOMPAS — The low realization of regional government budgets occurs every year. In order to prevent this from recurring, regional budget spending should be carried out as early as possible.
Based on data from the Directorate General of Regional Finance Development at the Home Affairs Ministry, as of 19 Nov., the average rate of regional budget (APBD) realization for the 2021 fiscal year was only 65.12 percent in the provinces, with regencies at 61.15 percent and cities at 59.08 percent. Only one month is left before the end of the fiscal year. As a result, it is feared that regional administrations are rushing budget realization by resorting to unproductive spending (Kompas, 24/11/2021).
Now we’re trying to get regional administrations accustomed to early tenders in the beginning of the year.
Director general of regional finance development Mochamad Ardian acknowledged that the low budget absorption had not only occurred this year. By learning from the problems this year and in preceding years, he said, improvements would be made next year by encouraging regional administrations to execute early tenders.
“In 2022, the Home Affairs Ministry will urge regional administrations to speed up the process through early tenders, by making early contracts. Contracts are usually concluded in May and June so that transfers occur in December. Now we’re trying to get regional administrations accustomed to early tenders in the beginning of the year,” said Ardian when contacted on Wednesday (24/11/2021).
He explained that with tenders conducted in January, hopefully regional administrations could enter contracts no later than March. As a result, transfers could be done in September. If possible, regional administrations should start their tenders in December so that contracts could follow in January and transfers could take place in June. With the new pattern of spending, he said, budget absorption by regional administrations could be optimized in the early part of the second half of the year.
The chairman of the Governance and Administrative Empowerment Division of the All-Indonesia Regency Administrations Association, Nikson Nababan, said that as it stood, e-catalogues could only be opened in June. He hoped e-catalogues could be opened in January so that budget spending would begin early in the year.
For speedy budget absorption, in his view, tenders worth less than Rp 2 billion should be conducted by direct appointment. In addition, budgets could be managed by regional administrations themselves under the supervision of the Supreme Audit Agency.
TANGKAPAN LAYAR
Director General of Regional Finance Mochamad Ardian Noervianto, together with Central Java Governor Gandjar Pranowo and Bogor Mayor Bima Arya Sugiarto in an online discussion "Dissecting Regional Government Cash in Banking", Thursday (16/9/2021).
Budget absorption
People’s Consultative Assembly Speaker Bambang Soesatyo has asked the central government and regional administrations to quickly realize the state budget (APBN) and APBD, especially related to priority programs, so that optimal budget absorption is achieved to support economic recovery and growth. Nevertheless, administrations should continue to maintain budget efficiency.
Institute of Public Administration professor Djohermansyah Djohan said the slow APBD absorption had occurred following the post-reform change of the fiscal year from the previous 1 April to 31 March to the current 1 January to 31 December. A lot of work is hampered from November onward because of the weather.
The other factor causing the low APBD spending is the lack of implementation and technical directives in January. This stops regions from being able to take action.
Consequently, the execution of programs and activities have to be delayed.
In principle, nearly all projects and activities have been set in motion.
Djohermansyah stressed that the year-end rush of budget absorption could harm quality. Therefore, the 1 April - 31 March fiscal year was more suitable for Indonesia, with its vast territory.
The other solution, according to Djohermansyah, is to simplify the system of expenditure. Complicated reports make regional administrations work slowly. “The long time for tenders is caused by intricate electronic procurement processes and e-cataloguing,” he said.
Indonesia Budget Center Executive Director Roy Salam said all tenders should be carried out early in the year, as the goods ordered were not typically promptly available.
Meanwhile, among reporting regions, budget absorption is still around 60 to 70 percent.
The Medan city government attributed its low regional budget realization this year to delayed payments to third parties. Nearly all government projects and programs have been executed. Payments will be expedited at the end of this year to maximize regional budget absorption. “In principle, nearly all projects and activities have been set in motion,” said the head of the Medan Regional Finance and Assets Management Agency, Zulkarnain. (PDS/NSA/HRS/DIT/IKI/OKA/TAM)
