Shake-up at MoF to produce new treasury unit
Fitri Wulandari, The Jakarta Post, Jakarta
The planned reorganization of the Ministry of Finance (MoF) will produce a new treasury unit responsible for managing state funds.
Mulya P. Nasution, deputy head of the reorganization committee, said the treasury unit would not only have authority over the allocation of funds to ministries and government agencies but would also be responsible for finding resources to finance the state budget.
"When there is a mismatch between revenue and spending, it (the treasury unit) will have the responibility of finding cheaper funding sources," Mulya told The Jakarta Post in a recent interview.
Mulya said the unit, which will be called the Directorate General of Treasury Management, was crucial so as to ensure the availability of funds to finance government activities.
The unit would serve as a kind of fund manager for the state, with the authority to seek cheap funds and decide on how to invest any surplus funds.
In summary, the treasurer's responsibilities include preparing state financial reports, cash management, debt management, lending operations, procurement policy and asset management.
The reorganization of the ministry is partly aimed at curbing corruption as huge amounts of state funds have been embezzled in the past.
Minister of Finance Boediono was supposed to endorse the reorganization blueprint in April, but this was delayed due to what insiders said was a political struggle over the dismissal of certain senior officials and the selection of new ones in the reorganization process.
In addition to the treasury unit, the ministry will also have other units, namely the Fiscal Policy Unit and the Directorate General for Budgetary Affairs and Fiscal Balance.
The Fiscal Policy Unit will be responsible for designing government fiscal policy to be presented to the House of Representatives during the deliberation of the state budget bill.
The Directorate General of Budgetary Affairs and Fiscal Balance will be responsible for designing the state budget and fiscal balance between the central and local governments.
The creation of three separate key units in the Ministry of Finance is to help boost efficiency and avoid overlapping of duties.
At present, the three functions of treasury management, fiscal policy and budget preparation are spread throughout several directorate generals and agencies, including the State Accounting Agency (Bakun), Fiscal Analysis Agency, the 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.
Aside from the question of efficiency, these often produce policies that overlap or go against each other, Mulya said.
Economist Raden Pardede of Danareksa said the separation of the three functions would result in a clear-cut distribution of responsibilities between the fiscal, monetary and macroeconomic areas.
"The policy will be more integrated and clearer. For example, how to rake in financing from domestic resources," Raden told the Post.
Raden said that with the current organization, policies produced by directorate generals within the ministry often went against macroeconomic policy and vice versa.
Mulya said Bakun, PKPD and Fiscal Analysis Agency would be scrapped as a result of the reorganization.
He added that the blue print was still being finalized but declined to say when it would become effective.
"But in essence, the Ministry of Finance will be backed up by a more professional team in providing good financial management," he said.