Analysis of Expenditure on Social Aid and Grants

Study of Loca l Budgets APBDs for 2008-11 in 20 Ka bupa tensCities in four Provinces in Indonesia 25

3.4 Analysis of Expenditure on Social Aid and Grants

Overall expenditure on social aid bansos and grants 6 over the period in the Kinerja regions studied rose between 2008 and 2010. These line items are often not drafted with the benefit of public participation and are not well accounted for. Nevertheless, in regions studied, spending on them rose, on average, from 4.3 of total local expenditure to 4.9 in 2010; but it declined to 3.7 in 2011. Some regions — particularly in Aceh — allocated substantial amounts for spending on social aid bansos and grants. Examples of this were the four kabupatens in Aceh: they spent between 5.7 and 7.1 of their budgets on these two line items between 2008 and 2011 and averaged between Rp 17.5 and Rp 22.9 million p.a. constant 2008 prices. Other regions allocating more than 5 of their total expenditure for bansos and grants were Sekadau, Jember and the city of Makassar. In fact, the last two named spent quite substantial amounts: an average of Rp 74.4 billion pa Jember and Rp 59.7 pa Makassar over the four years studied. By contrast, Barru allocated just 2 of its annual spending on these two types of expenditure. Graph 3.7 Average of Total Local Budgets of Kinerja Regions Studied Spent on Social Aid and Grants 2008-2011 Source: ABPD-Rs for 2008-2010 a nd APBD-Ms 2011, processed by Sekna s FITRA a nd TAF F indings of the national Audit Board BPK have exposed a number of issues around expenditure on social aid and grants in regions studied. For example, it found that in 2009 in Sekadau Rp 376 million of social aid had not been distributed to beneficiaries and of that an amount Rp 300 million had been accounted for in a ―pro forma‖ way. Also, in 2008 in Simeulue, as much as Rp 1.18 billion worth of social aid earmarked for community organizations was found to have been dispersed to parent departments in the central government; and supporting evidence was incomplete in the case of a further Rp 6.5 billion . In Aceh Singkil as well, in 2009, Rp 7.05 billion earmarked for social aid and ―unforeseen items‖ was found to have not been properly accounted for. 6 Home Affairs Minister regulation No. 322012 specifies ―grants‖ hibah as being assistance in cash or kind paid by a local government to the central government, other local governments, a local company, the community or community organizations for purposes tha t have been clearly specified. For its part, ―social aid‖ bansos can take the form of payments in cash or kind to individuals, families groups or the community. Neither form of payment is obligatory or binding, or paid on a continuing basis. 5,5 2,9 1,1 4,9 1,2 3,1 2,0 2,4 1,2 2,1 2,7 3,4 2,7 0,6 1,0 1,3 1,8 1,4 0,8 1,0 1,6 4,1 5,2 0,9 4,5 2,6 3,1 2,2 3,3 2,2 1,5 0,7 1,1 2,8 2,3 1,6 0,9 1,1 1,6 0,9 1 2 3 4 5 6 7 8 Hibah Bantuan Sosial Grants Social Aid Study of Loca l Budgets APBDs for 2008-11 in 20 Ka bupa tensCities in four Provinces in Indonesia 26

4. Local Budget Financing