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B. RECEIPT OF FOREIGN GRANTS BY LOCAL GOVERNMENTS THROUGH A TRUST FUND
The planning process for the forwarding of grants to local governments through a Trustee Institution LWA is almost the same as that through the MMAF. The only difference lies in that
activities proposals and the proposals of local governments receiving grants are implemented by a Board of Trustees MWA.
This method refers to the latest regulations and implementation guidelines, namely: 1. Government Regulation No. 10 of 2011 on Procedures for the Procurement of Foreign
Loans and Receipt of Grants 2. Government Regulation No. 2 of 2012 on Grants to Local Governments
3. State Minister for National Development PlanningHead of the National Development
Comprehensive Plan
DIPA Annual Plan
SPPH SPM
MWA Minister of
MAF
Minister of Finance,
DJPbRKUN
Minister of Finance,
DJPbKPPN
Assessment; DRKH
Grants transferred
Veriication Grant entry
Fund transferred to RKUD
Register at SA-BUN
NegotiationAgreement Signing
Enter into and sign Grant Agreement
Planning Minister
Donor Minister of
Finance, DJPU
Minister of Finance,
DJPK Local
Government
START
SP2D STOP
Proposal Proposal
Allocation Endorsement
Letter
Figure 14. Receipt of foreign grants by local government through Trustee Institution
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Planning Agency Regulation No. 4 of 2011 on Procedures for Planning, Proposal Submission and Assessment, and Monitoring and Evaluation of Activities Funded by Foreign Loans and
Grants
4. Presidential Decree No. 80 of 2011 on Trust Funds 5. Minister of Finance Regulation No. 188PMK.072012 on Grants from the National
Government to Local Governments The following is the method for the receipt of foreign grants by local governments through a
Trustee Institution: 1. A donor intends to provide a grant for activities to be implemented by a particular local
government through a trust fund mechanism or an already established Trustee Institution LWA. The process for establishing an LWA can be seen with the grant receipt method No.
4, that is the receipt of a direct grant by an NGO through a Trustee Institution.
2. The subsequent procedure adheres to the method for the receipt of foreign grants through the MMAF that is outlined above, with an explanation as follows:
a. A local government activities proposal passes a Board of Trustees MWA assessment. b. An activities funding proposal submitted by the Minister of Marine Affairs and Fisheries
constitutes the forwarding of the proposal from the MWA. c. The Minister of Finance submits the activities proposal directly to the Donor, or not
through the MWA. Thus, the grant agreement is made between the Minister of Finance and the Donor.
d. A proposal with regard to the amount of the grant and the local government beneiciaries submitted by the Minister of Marine Affairs and Fisheries constitutes the forwarding of
the proposal submitted by the MWA. e. The proposed mode for the channeling of the grant is funds transfer from the RKUN to
the RKUD as explained with the previous method, as follows: i. The grant is channeled to the RKUN via a channeling order from the MWA to the
Trust Fund Manager PDA. ii. The MMAF veriies the evidence submitted by the local government.
Additional clariication: 1. The advantages of this grant receipt option are the same as for the previous one.
2. The disadvantages of this grant receipt option are as follows:
a. The planning process takes a relatively long time due to the necessity of passing through the Minister of Planning and Ministry of Finance both DJPU and DJPK assessment
processes. The time required for this is made even longer in comparison with option No. 1 because it is also subject to the MWA’s activity feasibility assessment. In order
to mitigate this disadvantage, the assessment process at Bappenas and the Ministry of Finance DJPU and DJPK can be conducted simultaneously. The extra time is required
because the activities proposal must irst go through the MWA before reaching the MMAF. However, with option 1 it is directly submitted to the MMAF.
b. Currently, the MMAF does not have any Trustee Institutions LWA set up as trust fund managers. In order to mitigate this disadvantage, the present process for establishing
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C. RECEIPT OF FOREIGN GRANTS BY NGOS THROUGH THE MMAF
