Local Government Revenue and Expenditure Budgets APBD

12 Budgeting for future areas of reform refers to different characteristics of financial management areas in pre-reformation that differences in the characteristics of budgeting in the pre-vaccine era reform with budgeting in the era of reform are as follows: 1. Understanding of the regions provinces and districts cities. 2. The sense of regional government is the head of the region along with other devices. 3. The calculation of APBD has become one of the responsibilities of the head of the area and provides direction for APBD general policy in line with the agreement between the Executive and the legislative. 4. Output system Differences, planning over APBD use a system of surplusdeficit budget. 5. The structure of the APBD consists of revenues, and expenditures. 6. System planning is a performance budget, standard output orientation of service-learning outcomes, and integrated. 7. The documentation for the preparation of the budget through RASK budget plans a unit of work. 8. Loans and the rest of the more budget calculation SILPA is a type of financing. 9. Transfer of Funds from the Central Government consists of the Balanced Budget Tax share DBH, Income Tax PPh, Tax on Acquisition of Land Buildings BPHTB, Natural Resources 13 SDA, General Allocation Funds DAU, and Special Allocation Funds DAK. 10. Record-keeping and reporting systems using accounting systems cash base pairing and customizations. 11. From the accountability report end of year budget consists of: a. Report of the realization budget. b. Balance sheet c. Cash flow statement d. Notes to the financial statements. 12. Come with performance research based on a benchmark strategic plan areas. 13. The loans APBD are no longer included in the post, but revenues have been introduced in the post of receipts. 14. The community was involved in the preparation of the APBD in addition to the Government and Parliament. 15. An indicator of the performance of local governments includes: a. Comparison of budget and actual b. A comparison between standard costs with its realization. c. Physical percentage targets and projects. d. Accountability the head area at the end of its APBD fiscal year calculation reports is covered by the Local Home of Representatives DPRD and contains the consequences to the head region, when legislators rejected twice. 14 In the post-war period of reform, APBD a lot of the changes are pretty basic. The first form of APBD is based on the decision of the Minister of Home Affairs Number 29 in 2002 about the management, accountability and financial control area, as well as the procedures for the preparation of the calculation of the budget revenues and local government expenditure. In Act No. 17 of 2003 about the finances of the State mentioned that: 1. APBD is the financial management, which is determined annually by the regional regulation. 2. APBD consists of revenues, expenditures, and financing. Regional. 3. Revenue from PAD. 4. Local Government expenditure divided according to the organization, function and type of expenditure. According to the regulation of the Minister of Home Affairs No. 13 of 2006 articles 1 paragraph 9 mentioned that the APBD is the annual budget plan for local government, which is discussed and approved jointly by local governments and local parliament DPRD, and set as local regulations. The budget income and expenditures can be presented - according to the area of Ministry of Home Affairs No. 13 of 2006 in the image below. 15 Table 2.1 Income and Expenditure Budget Chart Various other definitions or understandings of the budget are included: PAD 1. Region TAX 2. Region Retribution 3.The results of the wealth management area which is separated. 4. Legalized Dll PAD. Balanced Budget 1. Dividend funds 2. General allocated funds 3. Special allocated funds. Others Legal Revenues. 1. Not Binding Grants 2. Emergency funds from government 3. Shared tax revenue from province government. 4. Adjusted OTDA funds 5. Financial support from province. Non Direct Expenditures 1. Employees Expense 2. Interest 3. Subsidy 4. Grants 5. Social Costs 6. Shared Expenditures 7. Financial Support 8. Unexpected expenditures Direct Expenditures 1. Employees Expenditures 2. Goods and services expenditures. 3. Capital Expenditures Source of financing 1. SILPA 2. Reserve fund liquefaction 3. Result of selling separated assets . 4. District’s loan 5. Districts’ receivables Financing 1. Make reserve fund 2. Government investment 3. Repaid loan 4. Give loan to the others region REVENUE AND EXPENDITURE BUDGET REVENUE EXPENDITURE FINANCE 16 1. Budget describes any form of local government in look for sources of revenue, and then how these funds are used to achieve government objectives. 2. Budget estimates and expenditure describing areas expected to occur within the next year based on the realization of the past. 3. Budget is a Government operational work plans to be carried out the next year in units of numbers of dollars. This budget is a translation monetarist of the existing regional planning documents and agreed to be carried out during the year. Budgeting needs to be a reference BPKP, 2005 in Warsito, et al 2008 as follows: 1. Transparency and accountability of the budget In order to achieve good governance, clean and respectable, budget transparency is important, budget is one means of evaluating the performance of government that provides information about the goals, objectives, outcomes and community benefits of an activity or project. 2. Budget discipline The budget needs to be clarified clearly drafted to avoid overlap that can lead to wastage and leakage of funds. Therefore, the budget must be efficient, effective, timely and accountable. 17 3. Justice budget Local government financing through taxes and retribution mechanism imposed upon society. Therefore, they should be allocated fairly and proportionately in order to be enjoyed by the whole community. 4. The efficiency and effectiveness of budget Funds collected and used for the development must be felt by most people. 5. Compiled with the performance approach Budgets are prepared with performance approach, which focus on supporting the achievement of the performance results of the cost allocation plan or the input set. This work should be equivalent or greater than the cost or input set. In addition it must be able to foster the professionalism of the work of any organization-related work.

2. Definition of Local Government Expenditures BD

The definition of expenditures by the Law 24 of 2005 is as follows: “Expenditure is all expenditures from the account of the State Regional equity funds reduce smoothly in the corresponding period of the fiscal year that will not be earned back by the government payment.” Another definition of expenditure is as described in the Regulation of the Minister of Home Affairs Decree. 59 of 2007 as follows: 18 Expenditures are the obligation of the local government which is recognized as a deduction from net worth. Both of these definitions make it clear that the deal will reduce the equity fund expenditures of local governments. Both the rules, which arrange the expenditures, classify expenditures by different classifications. The difference is simply because there is anything else you want covered by the Regulation of the Minister of Home Affairs Decree. 59 of 2007. As it is defined by the Minister of Home Affairs Decree 59 in 2007 as a local financial management guideline, which includes the planning, budgeting, administration, accounting and accountability. As the required budgetary instrument the information control is indicated, which is considered the information associated with the concept of performance-based budgeting. Expenditures are measured and compared to the output achieved. Direct expenditures are expenditures that are directly affected by the program and planned activities. Government asked to focus more on increasing expenditure direct expenditure, either by increasing consumer purchasing power and infrastructure development. Direct expenditure is believed to have a more powerful multiplier effect in job creation than just fiscal incentives enjoyed by some people only Abdul Halim, 2002 According to Law no.58 2005 the local government expenditures are used in order to fund the implementation of government affairs under the authority of the provinces or districts cities consisting 19 of obligatory, choice affairs and the treatment affairs in certain sections or areas that can be carried out jointly between the central government and the local government or among local governments established by the prevailing legislation. Local Government expenditures are all local government expenditures within a budget period. Revenues and expenditures consist of three main components, namely the element of revenues, the routine of expenditures and the expenditures’ development. The third component is even prepared almost at same time, but the proceeding is within different institutions. Halim, 2002. According to Law no 58 article 26.2005 Expenditure matters concerning the implementation of priority referred to protect and improving the quality of life of the community in an effort to meet local obligations are realized in the form of increased basic services, education, health, social facilities and public facilities and develop an appropriate social security system. The classification of expenditure by business shall include: education, health, public works, housing, spatial planning, transport, environment, land, population and civil, womens empowerment, family planning and family welfare, social, labor, cooperative and small and medium enterprises, investment, culture, youth and sports, national unity and domestic politics, public administration, employment, community development and rural, statistics, records and communications and