MoF to have powerful treasury unit

Dadan Wijaksana, The Jakarta Post, Jakarta

Reorganization of the Ministry of Finance (MoF) will be completed in March next year, thereby creating a powerful treasury unit, Minister of Finance Boediono said on Wednesday.

A presidential decree on the reorganization measure would first be issued before it becomes effective, to serve as a legal basis, Boediono said in a hearing with House of Representatives Commission IX on financial affairs.

"We're entering the final stages, with the decree expected to be issued early next year. Then we expect this to operate gradually, starting in March," Boediono said.

The reorganization plan surfaced early this year, as part of attempts to help boost efficiency, provide more clear-cut job descriptions to avoid overlapping polices and, to some extent, help curb corruption.

The plan came as a result of an agreement between the government and the International Monetary Fund (IMF), and was later included in the must-do list of action in the letter of intent (LoI).

Boediono said that under the plan, there would be a new unit, to be known as the Directorate General of Treasury Management, to include the management of state funds among its responsibilities.

Not only will the treasury unit have authority over the allocation of funds to ministries and government institutions but it will also be responsible for finding resources to finance the state budget.

That means it would become a kind of fund manager, tasked to seek alternative resources of funds and provide advice, as well as determine where to invest whenever there was a surplus.

The preparation of state financial reports, cash management, debt management, lending operations, procurement policy and asset management would all fall under the unit's line of duties, Boediono said.

He added that more detailed information would be drawn up in the decree, which is expected to establish a clearer distribution of responsibilities between the fiscal, monetary and macroeconomic areas, he added.

Two other units will also be established: the Fiscal Policy Unit and the Directorate General for Budgetary Affairs and Fiscal Balance.

The two units will also provide assistance in the drawing up of the annual state budget in respective areas -- fiscal policies and fiscal balance between the central and regional governments.

At present, the three functions of three divisions are spread between several directorates general and agencies.

These include the State Accounting Agency (Bakun), Fiscal Analysis Agency, Directorate General of the State Budget, Directorate General of Fiscal Balance and Decentralization (PKPD), Directorate General of Budgetary Affairs, Directorate General of Financial Institutions and the Bonds Management Center under the secretary-general.

As a result of the plan, the PKPD and Fiscal Analysis Agency would very likely be scrapped.