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C. RECEIPT OF FOREIGN GRANTS BY NGOS THROUGH THE MMAF
UNDER THE DIRECT GRANT MECHANISM
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. Minister of Finance Regulation No. 191PMK.052011 on Grant Management Mechanisms
3. Minister of Finance Regulation No. 230PMK.052011 on the Grant Accounting System 4. Director General of Treasury Regulation No. 81Pb2011 on the Procedures for Validating
Direct Grants in the Form of Cash and for the Submission of Records on Direct Grants in the Form of GoodsServicesSecurities
The process for the receipt of a foreign grant by NGOs through the MMAF under the direct grant mechanism is as follows:
1. A donor intends to provide a grant for activities to be implemented by a particular NGO
through the MMAF. 2. The Minister of Marine Affairs and Fisheries conducts the following activities:
Minister of MAF
Intend to provide grants
to government
Grants Disbursement
a. Assess the purpose of grants by considering principles in
receiving grants b. Consultation with Minister of
Finance, Minister of Planning and relevant ministers
c. Agreement signing between minister MAF and Donor
Grants transferred into Satker account
• Grant Agreement Registration • Account opening permit
• DIPA Revision • Grant Disbursement Endorsement
Veriication; Fund Transfer to NGO
account Request for
Disbursement • Agreement process between KPA and NGO
• Agreement implementation between KPA and NGO
KaSatkerKPA Donor
NGO START
Grant Agreement
STOP Figure 15. Receipt of foreign grants by NGO through MMAF
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a. Reviews the purposeobjective of the grant with regard to the principles of grant receipt Article 56, Paragraph 2, Government Regulation No. 10 of 2011
b. Consults the grant receipt with the Minister of Finance, Minister of Planning, and other relevant Ministers Article 56, Paragraph 3, Government Regulation No. 10 of 2011
3. A grant agreement between the Donor and the Minister of Marine Affairs and Fisheries is signed Article 63, Government Regulation No. 10 of 2011.
4. The Donor transfers the grant to the account designated by the Head of the MMAF Satker as the recipient of the grant as the Proxy Budget User KPA.
5. The Head of the MMAF Satker prepares Terms of Reference ToR with regard to the activities and a Request for Proposal RfP and then sends them to the NGO.
6. The NGO submits an activities proposal to the MMAF Satker. 7. The MMAF Satker assesses the proposal submitted by the NGO.
8. In the event that the proposal is approved, an agreement between the MMAF KPA and the
NGO is signed. 9. The NGO implements activities in accordance with the agreement.
10. Based on actual work already implemented, the NGO makes a request for funds from the MMAF KPA. The NGO can be provided with an advance payment as stipulated in the
agreement. 11. The MMAF KPA channels funds to the NGO after verifying evidence submitted by the NGO.
12. Subsequently, the MMAF KPA enters the receipt of the grant in the government inancial system as follows:
a. Registers the receipt of the grant with the Directorate General of Debt Management DJPU, Directorate of Accounting, Evaluation and Settlement Dit EAS
b. Revises the DIPA and make a validation request to the Directorate General of Treasury DJPb, Directorate of Budget Implementation
c. Requests a permit to open an account from the Directorate General of Treasury DJPb, Directorate of State Treasury Management
d. Requests validation of the actual channeling of the grant from the State Treasury Service Ofice KPPN with the use of a Direct Grant Validation Order SP2HL
e. Receives a Direct Grant Validation Letter SPHL from the KPPN and then records it in the Government Agency Accounting System SAI
Additional clariication: 1. The advantages of this grant receipt option are as follows:
a. It can be immediately implemented because discussionsnegotiations and the signing of the grant agreement are undertaken by the Minister of Marine Affairs and Fisheries or
authorized oficial and the Donor. b. The grant can be distributed immediately without having to wait for the preparation and
validation of the DIPA and approval from the Ministry of Finance to open an account. c. In order to acknowledge the actual receipt of a grant it is suficient to validate it with the
KPPN. 2. The disadvantages of this grant receipts option are as follows:
a. The receipt of a grant may not be in line with national development priorities if the grant agreement is made without consultation with the Minister of Planning and the Minister of
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Finance. In order to mitigate this disadvantage, written evidence from both the Minister of Planning and the Minister of Finance needs to be obtained prior to the signing of the
grant agreement, stating that the activities to be funded by the Donor are in line with national development priorities.
b. The receipt of a grant may not be recorded or recognized if the Satker neglects to follow the State Budget APBN grant mechanism registration, DIPA revision, permit to open
an account, and validation for channeling the grant. In order to mitigate this disadvantage, the above tasks can be included in the Satker’s standard operating procedures.
D. RECEIPT OF FOREIGN GRANTS BY NGOS THROUGH A TRUST FUND UNDER THE DIRECT GRANT MECHANISM
