'Regions not ready for new budget system'

'Regions not ready for new budget system'

Oyos Saroso H.N., The Jakarta Post, Yogyakarta

Local administrations will find it difficult to implement the new
concept of budgeting stipulated in a decree issued by the
Ministry of Home Affairs as it upheld the principles of
transparency and accountability, often anathema to local
governments, an analyst says.

Masykur Wiratmo of the Center for Economic Studies at the
Yogyakarta-based Gadjah Mada University said that the budgeting
system set out Decree No. 29/2002 on 2003 Local Government
Budgets was an ideal one for local autonomous administrations as
budgets would no longer be focused on achieving a balanced budget
but rather on budget surpluses and deficits.

Speaking during a workshop on the drafting of performance-
based local budgets in Yogyakarta over the weekend, Masykur said
that the new concept would reveal the respective performances of
local administrations for all to see.

"Actually, the biggest hurdle local administrations have to
cross is the question of financial transparency as budgets are
often formulated based on the needs of officials. With the new
concept, the public will be able to find out what the salaries of
top government officials are," Masykur said.

According to Masykur, local governments and legislators had
still failed to comprehend the decree, which was issued last
June, due to a lack of socialization.

The decree is the final, condensed and amended version of
Government Decrees No. 105 - 110/2000 on Local Financial
Management and Accountability, and provides for the evaluation of
local government performance based on procurement standard
analyses, work performance indicators and cost standards.

Armen Yasir of Lampung Parliament Watch (LPW) said that the
performance-based budget concept was well-suited to Indonesia as
corruption was endemic here.

"The new budgeting approach requires rational spending that is
in accordance with the workload and program costs," he explained.

Armen, however, said that the opportunity for corruption would
continue to exist even though the decree required budget
accountability and transparency.

"The indicators for performance assessment are clear enough
and accord with the public interest. However, although budgets
will be more transparent, they will still be prone to corruption
as implementation will continue to depend on individuals," he
said.

Armen emphasized the need to issue local bylaws governing such
areas as transparency and the freedom to access information.
These would provide a legal basis for the public to exercise
control over local budget implementation.

Some 150 local administrations sent representatives to the
workshop.