110907_PFM analysis Aceh-Laureen_Serota.doc


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110907_PFM analysis Aceh-Laureen_Serota.doc

  1. 1. Analysis and Recommendations for Public Financial Management in Aceh Current Status Since 2005, 9 donor local governance programs have been operationalized in province of Aceh including Nias. Out of the 9 donor programs 6 programs have activities focusing on public financial management. Also, there are estimated 4 NGO’s which have activities focused on economic development and financial management as it relates to handling of programs with communities and small enterprise development. The demand for such services is revealed through assessments, however, depending on whether the assessment measures either or both qualitative and quantitative data, the depth of such outputs is questionable due to local governments not able to provide accurate or consistent data needed to strengthen local government capacity. Mapping donor local government results reveal activities focused on financial management attempt to ensure local government services are aligned to meet national regulations on integrated regional planning and budgeting in order to achieve national regulations objectives. In consideration of providing further financial management activities to local governments an assessment of current program outputs and their effectiveness/impact on local governments will help to successfully devise a strategy for program design and prioritize options for realignment of spending costs to avoid duplication. Local Governments in Aceh do not have the absorptive capacity to manage and apply an abundance of donor inputs because currently they have too many demands and minimum capacity to deliver. The following table outlines donor local governance programs with specific focus on public financial management activities: Donor Program Status Financial Management Budget Location GOI Activities counterpart/ Collaboration with other donors USAID Local 2005-2008 1. Performance Based Budgeting 4-7 Banda Aceh, BRR, possible Government (ongoing, based on actual budget ties with million Aceh Besar, partnership with Support possible measurable outcomes to (USD) Aceh Jaya, WB-SPADA Program extension to strengthen community Nagan Raya, pending (LGSP) 2009 for development Aceh Barat + specific Nias activities 2. Focus on integrated planning, focused on budgeting, and reporting budgeting and mechanisms financial services) 3. Develop revenue generation strategies, asset management 4. Training on planning and
  2. 2. budgeting processes. 5. Procurement and negotiation trainings 6. Prepare local governments on new government accounting standards CIDA Aceh Local 2007 – 1. Strengthen regional 2.5 Banda Aceh, GTZ Governance expected government capacity to Million Aceh Jaya Assistance completion undertake financial management (Canadian) and Pidie Program 2010 reform (under PERMEN 13/06) (CALGAP) through use of an effective approach for computerized financial management in all governments in Aceh Province and develop effective tools related to budget tracking and training. 2. Classroom Training for financial management professionals: -Budget Implementation - Accounting -Reporting 3. Software Training: -Strengthening skills on generic software tools 4. Supervision and Monitoring 5. Institutional Strengthening for HRD and Delivery 6. Cross cutting themes: 7. Coordination with other Donors and CIDA projects World Support for 2006 expected 1. Performance based budgeting 23 Million 19 Ministry of Bank Poor and until 2012 (USD) Kabupatens Disadvantaged Disadvantaged 2. Improve legislative regulations project including Areas, USAID- Areas on budget performance funded Nias LGSP under (partnership 3. Strengthen procurement and MDTF pending) auditing systems 4. Improve performance to strengthen monitoring and evaluation systems 5. Prepare district and sub-
  3. 3. district local governments to prepare for implementation of infrastructure programs and private sector development 6. Support local governments to prepare for economic and social development challenges GTZ Aceh Local 2007 - 2010 Assist local governments in EUR 21 (funded by Governance handling of financial resources 14.2 mill Kabupatens EC) Program II +management in the following areas: 1. Accounting systems and procedures 2. Budget process: implementation, medium term plans based on strategies in planned programs 3. Role of staff in budget and organizational structure 4. Cost recovery 5. Audit systems (internal and external) 6. Leadership in the DPRD 7. Stock control GTZ Support to 2005 - 2009 1. Assisting Bappeda in Euro 6 Banda Aceh, EC, Local developing medium term annual million Aceh Besar and CIDA/CALGAP Governments plans + increase the effectiveness Pidie and of the strategic planning Community activities of the dinas and more Planning transparent budget and finance process. (SLGSR) JICA The project on 2007 - 2009 Preparation to Local Banda Aceh, BRR, Local self- Governments on public Aceh Besar, Governments in sustainable administration trainings in Pidie, Aceh the selected community handling of programs Jaya, Aceh districts and empowerment Barat, Bireun communities network and Aceh formulation in Tengah Nanggroe Aceh Darussalam Province (NAD) UNDP Aceh 2007 - 2011 1. Public sector contrast and Funding Banda Aceh BRR Governance procurement from (other +Government of **(project Programme MDF: 15 locations Aceh pending) 2. Human Resource Management million unknown)
  4. 4. (USD) Gaps, Overlap and Recommendations: Activity Overlaps Gaps Recommendations Public Financial • Currently 5 donor • Lack of programs focused • (i) Support is Management Programs have completed or on creating further clarity on needed for issues on taxation have ongoing activities in taxation regulations from as stipulated in new LoGa; similar areas, duplication has national regulations (ii) support for the occurred: development of database • Funds and trainings to management to improve -Performance Based develop more enhanced communications and Budgeting software/database programs organizational management; (iii) support is recommended -Accounting systems and • Lack of developing for community facilities and standards coordinated action plans on services to improve financial management information sharing on how -Expenditure assessment trainings between donors. funds are spent -Develop strategic action plans • Lack of improving • Donor programs on revenue spending negotiations skills and interested in further supporting creating sustainable tools in financial management should -Short term and mid-term asset management. work through already existing planning programs and be sensitive to • Time horizon of financial not duplicate activities in the -Strengthening role of DRP management activities are same locations. Expansion and and connecting stronger sometimes incoherent to funding is needed to expand mechanism to executive APBN+APBD planning cycle, trainings on financial budget planning (minimum as a result management systems to Kab overlapping) located in central and eastern Aceh. -Providing skills and tools to enhance financial monitoring systems
  5. 5. Number of LG Programs N ia s Se 0 2 4 6 8 10 12 G la t ay an o Lu Management P i es d S i Be ime e ne ul r M ue er i Ac La ah eh ngs Ac a eh Sin Ac T gki eh am l Te ian n g A c gg Lh eh ara ok U s ta Ac eum ra eh aw Ac Se e eh lat T an Ac eng e a N hT h a g im an ur R Ac a eh S ya Ba a ab (2005 – 2007) ra ng tD a Bi ya re ue n Ac N ia eh s Ac Bar e at Ac h J eh aya Ba Be nd sa a r Ac eh Donor Local Government Program Locations with focus on Public Financial