24 or not expected to recur like natural disasters and social disasters
unforeseen, including the refunds of excess revenues from previous years that have been closed.
Classification of expenditures by function for alignment and integration of financial management consists of:
1 Public Service;
2 Order and Peace;
3 The Economy;
4 The Environment;
5 Housing and Public facilities;
6 Health;
7 Tourism and culture;
8 Education, and
9 Social protects.
3. Original Local Government Revenues PAD
One of the main objectives of fiscal decentralization is creating local independence. In this perspective, the governments local
governments are expected to be able to explore the local financial resources, particularly through revenues Sidik, 2002. Dependence on
transfers from central government from year to year should be more limited. Oates, 1999 provide a fairly rational reason why the
government should reduce this dependency:
25 a.
Central government transfers are usually accompanied by certain conditions, so it is a compromise relative autonomy, especially if the
funds transfer is the dominant source of local revenues.
b. Rely on the central government transfer actually reduces the local
creativity to take a policy associated with an efficient local revenue
collection.
Original Local Government Revenues PAD ideally should be the main source of local revenue. Another source of income is relatively
volatile and tend to out of control authority local government Sidik, 2002; Bappenas 2003. The data indicate that the contribution of PAD
increased from 6.59 in 2001 to 7.33 in 2002 Central Bureau of Statistics, 2004, the main source of revenue from local taxes and
retribution. However, the contribution of PAD is still very small while compared to the transfer from central government DAU and DAK,
which reached 79.14.
The Original Local Government Revenues are accumulated from the Tax Revenues containing Local Tax and Local Retribution, Non Tax
Revenues, which contain the profit of Regional Owned Enterprise BUMD, Postal Receipts Investment and Management of Natural
Resources. Bastian, 2002.
The Regional Original Revenues PAD are all local revenues derived from the original local economy. The identification of revenue
source is : investigate, determine and establish where the real source of
