'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.