Home Affairs Ministry Stresses Additional Regional Transfer Funds Cannot Be Used for Performance Pay or New Official Residences
The Home Affairs Ministry has urged regional governments to accelerate the use of additional Regional Transfer Funds (TKD) for post-disaster recovery, stressing that the budget must be used appropriately. The funds, totalling Rp10.6 trillion for three provinces in Sumatra affected by disasters, have been fully disbursed since May 2026. Minister Tito Karnavian, who also chairs the Task Force for the Acceleration of Post-Disaster Rehabilitation and Reconstruction in Sumatra, said he has given broad flexibility for the funds’ use. “I have given very wide latitude for its use. It can be used to build and strengthen district roads damaged by the disaster, repair village bridges, strengthen infrastructure, and address disaster-prone areas,” Tito said during a coordination meeting at the ministry in Jakarta on Wednesday, 17 June 2026.
The push for acceleration must be accompanied by directed use of the additional TKD. Secretary of the Directorate General of Regional Finance at the Home Affairs Ministry, Horas Maurits Panjaitan, stated that the use of the budget must adhere to the Minister of Home Affairs Circular Letter Number 900.1.3/1084/SJ concerning the Adjustment of TKD for the 2026 Fiscal Year, issued on 2 March 2026. “The ministerial circular on the use of additional TKD clearly contains guidelines in accordance with laws and regulations,” Maurits said while moderating an online coordination meeting on Friday, 26 June 2026.
Head of Sub-Directorate for Regional Budget Planning I at the ministry, Fernando Siagian, explained that the additional TKD can be used for rehabilitation purposes, such as environmental improvements, public facilities, and housing repair assistance for the community. Furthermore, social-psychological recovery, health services, social, economic, and cultural recovery, as well as the restoration of government functions and public services are also permitted uses. However, Fernando cautioned that the TKD should not be used to supplement facilities unrelated to the disaster’s impact. “If it is merely to complete facilities that did not previously exist, then it is not in accordance with the purpose of the budget allocation,” he said during an assistance and monitoring session in Aceh on Thursday, 25 June 2026.
He added that regional governments can also use the additional funds to accelerate the community’s economic recovery. Activities such as market operations and MSME exhibitions are allowed as long as they genuinely aim to revive post-disaster economic activity. “However, if what is exhibited are unrelated goods, such as luxury cars, that certainly cannot be justified,” he stated. In the reconstruction phase, the TKD can be used for mud clearing through community mutual cooperation schemes or rebuilding affected infrastructure, provided there is a clear standard cost or standard unit price.
Fernando also warned regions against using the budget for expenditures unrelated to the disaster, such as official travel not connected to disaster supervision, construction of new official residences, or additional employee performance pay (TPP). “If it is repairing an official residence damaged by the disaster, that can still be considered. But building a new official residence is not in line with the disaster theme,” he said. For regions not directly affected but still receiving additional TKD, the budget is directed towards disaster mitigation and preparedness activities, such as strengthening roads, bridges, and other infrastructure, as well as environmental improvements, community assistance, inflation control, and economic recovery. Fernando affirmed that while regional governments have the flexibility to determine the activities to be funded, all use of the additional TKD must remain within the corridor of disaster management and be accountable in accordance with applicable regulations.