ProdukHukum Perdagangan
GOVERNMENT REGULATION
NO. 105/2000 DATED NOVEMBER 10, 2000
ON REGIONAL FINANCIAL ACCOUNTABILITY AND MANAGEMENT
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering :
That in order to implement the provisions in Article 86 of Law No. 22/1999 on the Regional Administration and
Article 26 of Law No. 25/1999 on the Financial Equilibrium between the Central Government and the Regional
Administration, it is necessary to stipulate a Government Regulation on the Regional Financial Accountability
and Management;
In view of :
1. Article 5 paragraph 2 of the 1945 Constitution as already amended by the Second Amendment to the 1945
Constitution;
2. Law No. 22/1999 on the Regional Administration (Statute Book No. 60/1999, Supplement to Statute Book
No. 3839);
3. Law No. 25/1999 on the Financial Equilibrium between the Central Government and the Regional
Administration (Statute Book No. 70/1999, Supplement to Statute Book No. 3848).
DECIDES:
To Stipulate :
GOVERNMENT
MANAGEMENT.
REGULATION
ON
REGIONAL
FINANCIAL
ACCOUNTABILITY
AND
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Government Regulation referred to as :
1. Regional Finance shall be all Regional rights and obligations in the framework of implementing Regional
administration which can be valued by money including all forms of assets which are related to the relevant
Regional rights and obligations, in the context of the Regional Budget.
2. The Regional Budget of Income and Expenditures, which is hereinafter abbreviated to APBD, shall be a
Regional annual financial plan, which is stipulated on the basis of the Regional Regulation on APBD.
3. The Official who Manages Regional Finance shall be the Regional official and or employee who is given
certain authority to manage the Regional Finance in the framework of Regional financial management and
based on the existing regulations.
4. The Holder of General Power for Regional Financial Management shall be the Regional Head, who due to
his post, has the authority to carry out the whole Regional financial management and has the obligation to
submit the accountability for the implementation of the said authority to the Regional Legislative Assembly
(DPRD).
5. Regional General Treasurer shall be the official who is given the authority by the Holder of Gene ral Power
for Regional Financial Management to manage the revenue and expenses of the Regional Treasury and all
forms of other Regional assets.
6. The User of Regional Budget shall be the official holding the power to realize the Regional Expenditure.
7. Regional Treasury shall be the place for keeping Regional funds which is determined by the Regional
General Treasurer.
8. Holder of Treasury shall be anyone who is appointed and assigned to carry out treasury activities in the
framework of carrying out the APBD in each working unit of the Regional Budget User.
9. Reserve Funds shall be the funds which are put aside to meet the needs which require relatively quite big
funds which cannot be borne in a fiscal year.
10. Revenue shall be all revenues of the Regional Treasury in a certain fiscal year period.
11. Regional Expenses shall be all expenses of the Regional Treasury in a certain fiscal year period.
12. Regional Income shall be all revenues of the Regional Treasury in a certain fiscal year period, which
becomes the right of the relevant Region.
13. Regional Expenditure shall be all expenses of the Regional Treasury in a certain fiscal year period, which
becomes the burden of the relevant Region.
14. Financing shall be the Regional Financial transaction which is intended to cover the difference between the
Regional Income and the Regional Expenditure.
15. Surplus Balance of Last Year's APBD Calculation shall be the surplus of Regional income realization over
Regional expenditure realization and it shall constitute a component of financing.
16. Regional Goods shall be all goods owned by the Region which originate form the purchase with the funds
which wholly or partially are derived from the APBD or other legal acquisitions.
17. Regional Debts shall be the amount which shall be paid by Region as a consequence of delivery of money,
goods and or other services to the Region or other consequences based on the existing regulations.
18. Regional Claims shall be the amount which becomes the right of the Region or the obligation of another
party to the Region as a consequences of delivery of money, goods and or services by Region or other
consequences based on the existing regulations.
19. Regional Loans shall be all transactions which cause the Region to receive from another party a sum of
money or benefit of money worth, so that the Region is charged with the obligation to repay, excluding the
short term credit which generally takes place in the trade.
20. Regional Apparatus shall be the person/institution in the Regional Administration/who which is responsible
to the Regional Head and assists the Regional Head in carrying out the administration comprising the
regional secretariat, regional services and technical regional institutions, districts, and subdistricts in
accordance with Regional needs.
CHAPTER II
REGIONAL FINANCIAL MANAGEMENT
First Part
Official Who Manages Regional Finance
Article 2
1. The Regional Head is the Holder of General Power for Regional Financial Management.
2. In his capacity as the Official who Holds General Power for Regional Financial Management as referred to
in paragraph 1, the Regional Head delegates his authority partially or wholly to the Regional Secretary and
or the Apparatus Who Manages Regional Finance.
Article 3
1. The Regional Head first stipulates the Officials Who Manage Regional Finance by a letter of decision in
order to be able to carry out the budget.
2. Further stipulations on the duties and functions of each Official Who Manages Regional Finance are
stipulated in a Regional Regulation.
3. The Treasury Holder shall not hold the post as the Official Who Manages Finance of other Regions.
Second Part
General Principles of Regional Financial Management
Article 4
The Regional Financial Management is carried out in an orderly, law-abiding, efficient, effective, transparent
and responsible manner by taking into account the principles of justice and propriety.
Article 5
The APBD is the basis for the Regional Financial Management in a certain fiscal year.
Article 6
The APBD fiscal year is the same as the fiscal year of the State Budget Income and Expenditure.
Article 7
1. All Regional Revenues and Regional Expenses in the framework of decentralization are recorded and
managed in the APBD.
2. The APBD, Amendment to APBD, and Calculation of APBD are stipulated by a Regional Regulation and
they constitute Regional documents.
Article 8
The APBD is prepared by the approach of performance.
Article 9
In preparing the APBD, the budgeting of expenditures shall be supported by the certainty that the revenues in
adequate amounts are available.
Article 10
1. The total income budgeted in the APBD is a rationally measured estimate which can be achieved for any
source of income.
2. The total expenditure budgeted in the APBD is the highest limit for any type of expenditure.
3. Any official shall not take actions which result in the expenses charged to the APBD, if there is no adequate
budget or if there is no budget to finance the expenses.
4. The estimated APBD Calculation Surplus Balance of Last Year is booked in the initial balance of the APBD
of the subsequent year, while the realization of the Excessive Balance of Last Year's APBD Calculation is
recorded as the initial balance in the APBD amendment.
Article 11
All Regional financial transactions, both Regional Revenues and Regional Expenses are carried out through the
Regional Treasury.
Article 12
1. The budget to finance unexpected expenses is provided in a separate budget section.
2. The expenses which are charged to the unexpected expenses are intended to handle natural disasters, social
disasters and other unexpected expenses which are considerably needed to carry out the authority of the
Regional Administration.
Article 13
1. Regions can set up Reserve Funds to finance the needs which cannot be borne in a fiscal year.
2. The Reserve Funds are set up by annual contributions from APBD revenues, apart from the Special
Allocation Funds, Regional Loans and Emergency Funds.
Third Part
Arrangement of Regional Financial Management
Article 14
1. The provisions on the principles of Regional Financial Management are stipulated by a Regional Regulation
in accordance with the existing regulations.
2. The Regional Regulation as referred to in paragraph 1 stipulates the following matters :
a. framework and outlines of procedures for preparation of APBD;
b. financial authority of the Regional Head and DPRD;
c. principles of treasury management;
d. principles of management of Regional Expenses which have been budgeted;
e. procedures for procurement of goods and services;
f. procedures for seeking Regional Loans;
g. procedures for financial accountability;
h. and other matters involving the management of Regional Finance.
3. The system and procedures for management of Regional Finance are stipulated by a Decision of the
Regional Head in accordance with the Regional Regulation as referred to in paragraph 1.
4. The guidelines on the processing, accountability and control of Regional Finance as well as the procedures
of preparation of the APBD, the implementation of the administration of Regional Finance and the
preparation of calculation are stipulated by a Decree of the Minister of Home Affairs and Regional
Autonomy.
CHAPTER III
PREPARATION AND STIPULATION OF APBD
First Part
Structure of APBD
Article 15
1. The structure of APBD is an integral unit which consists of :
a. Regional Income;
b. Regional Expenditure;
c. Financing.
2. The Surplus Balance of the Regional Income over the Regional Expenditure is called budget surplus
3. The Deficit balance of the Regional Income over the Regional Expenditure is called budget deficit
4. The total Financing is the same as the total surplus/deficit of budget.
Article 16
1. The Regional Income as referred to in Article 15 paragraph 1 letter a is detailed by groups of income and
types of income
2. The Regional Expenditure as referred to in Article 15 paragraph 1 letter b is detailed by organizations,
functions and types of expenditure.
3. The financing as referred to in Article 15 paragraph 1 letter c is detailed by sources of financing.
Article 17
The budget to finance the unexpected expenses as referred to in Article 12 paragraph 2 is provided in the
budget section of unexpected expenses.
Article 18
1. The budgeting of Reserve Funds as referred to in Article 13 is allocated from APBD revenue sources.
2. All Reserve Funds revenue sources as referred to in paragraph 1 and all expenses at the expense of the
Reserve Funds are recorded and managed in the APBD.
3. The expenses to cover the requirement as stipulated in the Regional Regulation on the establishment of
Reserve Funds is charged to the account of Reserve Funds.
4. The position of the Reserve Funds is reported as an inseparable part of the APBD accountability report.
Article 19
1. If the Regional Income is anticipated to be smaller than the expenditure plan, the Region can seek loans.
2. The Regional Administration can seek other funding resources through cooperation with other parties with
the principles of mutual benefit.
3. The Regional Administration can carry out investment in the form of capital participation, deposits or other
investment forms as long as they can promote public service and do not affect the liquidity of the Regional
Administration.
4. Other funding resources and investments of the Regional Administration as referred to in paragraphs 2 and 3
are stipulated by a Regional Regulation.
5. The Regional Administration is responsible for the management of other funding resources and investments
as referred to in paragraph 4 and at the end of each year reports the outcome of the implementation to the
DPRD.
Second Part
Process of APBD Preparation
Article 20
1. The APBD which is prepared by the approach of performance as referred to in Article 8 contains :
a. the expected target in accordance with the function of expenditure;
b. the expected standard of service and the estimated component unit cost of the relevant activity;
c. part of the APBD income which finances the expenditure of general administration, operation and
maintenance, and of capital/development.
2. To assess the financial performance of the Regional Administration, the budget analysis standard,
benchmark of performance and cost standard are developed.
Article 21
In preparing the APBD draft, the Regional Administration and the DPRD jointly formulate the direction and
general policy of the APBD.
Based on the direction and general policy of the APBD as referred to in paragraph 1, the Regional
Administration prepares strategies and priorities of APBD.
Based on the strategies and priorities of APBD as referred to in paragraph 2 and by taking into account the
economic and financial conditions of Regions, the Regional Administration prepares the APBD draft.
Third Part
Process of APBD Stipulation
Article 22
1. The Regional Head submits the APBD draft to the DPRD for approval
2. If the APBD draft is rejected by the DPRD, the Regional Administration shall revise the said draft of
APBD.
3. The revision of the APBD draft as referred to in paragraph 2 shall be re-submitted to the DPRD.
4. If the APBD draft as referred to in paragraph 3 is rejected by the DPRD, the Regional Administration uses
of the APBD of previous year as the basis for processing Regional Finance.
Fourth Part
APBD Amendment
Article 23
1. The APBD Amendment is carried out in connection with :
a. Policies of the Central Government and Regional Administration which are strategic;
b. Adjustments resulting from the failure to achieve the target of Regional Revenue which has been set;
c. Emergence of urgent needs.
2. The APBD amendment is stipulated at the latest 3 (three) months before a certain fiscal year ends.
CHAPTER IV
IMPLEMENTATION OF APBD
First Part
Revenues and Expenses of APBD
Article 24
1. Any Regional Apparatus which has the duty of collecting or receiving Regional Income shall carry out the
intensification of collection of the income.
2. All benefits in the form of money, such as commissions, rabates, discounts, interests or other names
resulting from sale and or procurement of goods and or services and from deposits and or placement of
Regional money constitute Regional Income.
3. The Regional Income is fully and punctually paid to the Regional Treasury in accordance with the existing
regulations.
Article 25
Actions resulting in the expenses being borne by the APBD cannot be carried out before being stipulated in the
Regional Regulation on APBD and placed in the Regional Gazette.
Article 26
For any expense borne by the APBD, an Authorization Decision Letter or other letters of decision which are
equivalent to it are issued by the authorized official.
Article 27
1. Any charge to APBD shall be supported by complete and legal evidences on the rights acquired by the
collecting party.
2. Anyone provided with the authority to sign and or legalize the evidence letter serving the basis for expenses
on the charged to APBD is responsible for the truth and consequence of the use of the evidence.
Article 28
1. The User of Regional Budget submits the Payment Request Letter to carry out the expenses as referred to in
Article 27 paragraph 2.
2. The payment at the expense of the APBD is made by the Letter of Order to pay.
3. The Regional General Treasurer pays on the basis of the Letter of Order to pay.
Article 29
1. Salaries of Regional Civil Servants are borne by the APBD
2. Regional Civil Servants are provided with additional income based on objective considerations by taking
into account the capacity of Regional Finance and obtaining the approval of the DPRD in accordance with
the existing regulations
3. The salaries of the Regional Civil Servants who are employed to support the Regional State-owned
Enterprises (BUMDs) or other business units are borne by the relevant BUMD or Business Unit.
4. The payments for pensions of the Regional Civil Servants who are appointed by the Regional
Administration are the responsibilities of Regions.
Article 30
The use of the unexpected budget as referred to in Article 17 is notified to the DPRD.
Second Part
Regional Goods Management
Article 31
1. The Regional Head regulates the management of Regional Goods.
2. The Recording of Regional Goods is carried out in accordance with the accountancy standard of the
Regional Administration.
3. The Regional Secretary, Secretary of DPRD and heads of services/technical institutions are the users and
managers of goods for the Regional secretariat/DPRD secretariat/Regional services/Regional technical
institutions they head.
Article 32
1. The procurement of goods and or services can only be charged to the APBD, as long as the goods and or
services are needed to carry out the activities in accordance with the main duties and functions of the
relevant Regional Apparatus.
2. The procurement of goods and services at the expense of the APBD is further stipulated by a Decision of the
Regional Head.
Article 33
The user of goods shall manage Regional Goods in accordance with the existing regulations.
Article 34
In the case that the management of Regional goods earns revenues, all of the revenues are wholly and directly
paid to the Regional Treasury.
Third Part
Financial Accountancy of Regional Administration
Article 35
The administration and accountability of Regional Finance adhere to the existing financial accountancy
standard of the regional administration.
CHAPTER V
APBD CALCULATION
Article 36
1. At the end of each fiscal year the Regional Administration shall make calculation of APBD containing the
ratio between realization of APBD and the APBD.
2. The APBD calculation shall calculate the differences between the realization of revenue and the revenue
budget and the realization of expenses and the expenses budget by providing the reasons.
CHAPTER VI
REGIONAL FINANCIAL ACCOUNTABILITY
Article 37
1. The Regional Administration submits quarterly reports on the implementation of APBD to DPRD.
2. The quarterly reports as referred to in paragraph 1 are submitted at the latest 1 (one) month after the end of
the relevant quarter.
Article 38
The Regional Head prepares Regional Financial accountability reports consisting of :
a. APBD calculation reports;
b. APBD Calculation Notes;
c. Cash Flow Reports;
d. Regional Balance Sheet.
Article 39
1. Any Official who Manages Regional Finance periodically prepares financial accountability reports.
2. The system and procedures for the accountability as referred to in paragraph 1 are stipulated by a Decision
of the Regional Head.
CHPTER VII
CONTROL OF REGIONAL FINANCIAL MANAGEMENT
Article 40
This control over the implementation of APBD is exercised by DPRD.
Article 41
1. The Regional Regulation on APBD, APBD Amendment and Provincial APBD Calculation are submitted to
the Minister of Home Affairs and Regional Autonomy at the latest 15 (fifteen) days after being stipulated.
2. The Regional Regulation on APBD, APBD Amendment and Regency/City APBD Calculation are submitted
to Governor at the latest 15 (fifteen) days after being stipulates.
Article 42
1. The Regional Head appoints the official who functions to exercise internal control over the management of
Regional Finance
2. The official who exercises control over Regional Financial management as referred to in paragraph 1 shall
not hold another post in the Regional administration
3. The official who exercises control over Regional Financial management as referred to in paragraph 1 reports
the outcome of the control to the Regional Head.
CHAPTER VIII
REGIONAL FINANCIAL AUDIT
Article 43
The audit of the implementation, management and accountability of Regional Finance is carried out in
accordance with the existing regulations.
CHAPTER IX
REGIONAL FINANCIAL LOSSES
Article 44
1. All Regional losses both direct and indirect resulting from actions which violate law or negligence shall be
compensated by the people who commit the violation or carelessness.
2. Any Regional apparatus shall demand compensations for the loss as soon after finding out that in the
Regional Apparatus, losses are inflicted by the actions of whatever parties.
Article 45
1. The Regional Head shall carry out the compensation claim for any loss resulting from the actions which
violate law or negligence of the Official Who Manages the Regional Finance
2. The settlement of the loss as referred to in paragraph 1 is carried out in accordance with the existing
regulations.
Article 46
Further provisions on the compensation claim are stipulated by a Regional Regulation
CHAPTER X
CLOSING PROVISIONS
Article 47
At the time this Government Regulation takes effect :
1. The Government Regulation No. 5/1975 on the Processing, Accountability and Control of Regional Finance
(Statute Book No. 5/1975);
2. The Government Regulation No. 6/1975 on the Method of Preparing the Regional Budget, Administration
of Regional Finance and Preparation of APBD Calculation (Statute Book No. 6/1975);
are declared void
Article 48
At the time this Government Regulation takes effect, all regulations implementing the Government Regulation
No. 5/1975 on the Processing, Accountability and Control of Regional Finance and the Government Regulation
No. 6/1975 on the Method of Preparing the Regional Budget, Administration of Regional Finance and
Preparation of APBD Calculation are still valid as long as they are not against and or have not been replaced
with a new regulation based on this Government Regulation.
Article 49
This Government Regulation shall come into force as from January 1, 2001.
For public cognizance, this Government Regulation shall be announced by publishing it in the Statute Book of
the Republic of Indonesia.
Stipulated in Jakarta
on November 10, 2000
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
sgd.
ABDURRAHMAN WAHID
Promulgated in Jakarta
on November 2000
THE STATE SECRETARY,
sgd.
DJOHAN EFENDI
STATUTE BOOK OF THE REPUBLIC OF INDONESIA NO. 202/2000
ELUCIDATION
ON
GOVERNMENT REGULATION NO. 105/2000
ON REGIONAL FINANCIAL ACCOUNTABILITY AND MANAGEMENT
GENERAL
Based on Law No. 22/1999 on the Regional Administration and Law No. 25/1999 on the Financial
Equilibrium between the Central Government and the Regional Administration, the Central Government and the
Regional Administration constitute an inseparable entity in carrying out the administration and public service.
The major mission of both laws is not only the desire to transfer the authority and financing from the Central
Government to the Regional Administration, but more importantly the desire to improve the efficiency and
effectiveness of Regional financial resources management in order to improve people's welfare and public
service. For that purpose, the spirit of decentralization, democratization, transparency, and accountability
becomes very dominant in the process of carrying out the administration in general, and the process of Regional
financial management in particular.
In the framework of the system of carrying out the administration, the system of financial management
is basically the sub system of the administration itself. As a state financial system as referred to in Article 23
paragraph 5 of the 1945 Constitution, the aspect of Regional financial management is also a sub system which
is stipulated in Law No. 22/1999 on the Regional Administration particularly Article 78 up to Article 86. Article
80 stipulates that the financial equilibrium between the Central Government and the Regional Administration is
stipulated by a law. By that arrangement, it is expected that there will be more transparent and accountable
equilibrium in the distribution of authority, financing and the formulation of a better system of financial
management to realize the implementation of Regional autonomy in an optimal way in accordance with the
dynamics and the demands of a developing society.
In line with those matters, the Regional autonomy cannot certainly be seen only from the amount of
Balance Funds Regions will obtain but also the extent to which the instrument or the system of Regional
Financial management is able to provide financial management which is fairer, more rational, more transparent,
participative and responsible as referred to in both laws.
Specifically Law No. 25/1999 on the Financial Equilibrium between the Central Government and the
Regional Administration has stipulated a clear basis for management and accountability of Regional finance,
among others by providing freedom in stipulating products the following arrangements :
Provisions on principles of Regional Finance are stipulated by a Regional Regulation;
Systems and procedures for management of Regional Finance are stipulated by a Decision of the Regional Head
in accordance with the relevant Regional Regulation
The Regional Head submits accountability reports to the DPRD concerning the management of Regional
Finance and Regional financial performance from the aspects of financial efficiency and effectiveness;
The Regional Financial accountability reports constitute Regional documents, so that the public can be
informed of them.
Therefore, referring to the spirit of both laws, the guidelines on management and accountability of
Regional Finance which are governed in this Government Regulation are general and they put more emphasis
on the principles, norms, and general bases for management of Regional Finance. Meanwhile, the systems and
procedures for detailed management of Regional Finance are stipulated by each Region. The diversity is made
possible to happen as long as it is still in line with or is not against this Government Regulation. That effort is
expected to make Regions more responsible, creative and able to take initiatives in improving and updating the
systems and procedures as well as continuously reviewing the system in the hope of maximizing the efficiency
and effectiveness based on the local conditions, requirements and capacity.
ARTICLE BY ARTICLE
Article 1
Sufficiently clear
Article 2
Paragraph 1
The general power for Regional Financial management includes the function of general
planning, the function of preparing budgets, the function of collecting income, the function of the
Regional general treasury, the function of using budgets, as well as the function of control and
accountability.
Paragraph 2
In the framework of efficiency and effectiveness of Regional Financial management, the
Regional Head delegates his authority partially or wholly to the Regional financial management
apparatus;
The delegated authority minimally constitutes the authority which relates to the duties as the
Regional General Treasurer.
The Regional Secretary or the Regional financial management apparatus are responsible to the
Holder of General Power for Regional Financial Management.
Article 3
Paragraph 1
The stipulation of the Official who Manages Regional Finance is one of the requirements for
implementing the Budget. The Officials who Manages Regional Finance, covers e.g. the
Regional General Treasurer, Budget User and Treasury Holder.
Paragraphs 2 and 3
Sufficiently clear
Article 4
Sufficiently clear
Article 5
This provision means that APBD is the plan for implementing all Regional Income and all Regional
Expenditure in the framework of implementing decentralization in a certain fiscal year. In that way, the
collection of all Regional Revenues in the framework of implementing decentralization is aimed at
meeting the target stipulated in the APBD. All Regional Expenses and commitments which create
burdens on Regions in the framework of implementing the decentralization are carried out in accordance
with the quantity and target stipulated in the APBD, so that APBD becomes the basis for the control,
audit, and the supervision of Regional Finance.
Article 6
Sufficiently clear
Article 7
Paragraph 1
All Regional Revenues and Regional Expenses which are not related to the implementation of
deconcentration or Supporting Duties are the revenues and expenses in the framework of
implementing decentralization.
Paragraph 2
Sufficiently clear
Article 8
The budget with the performance approach is a system of budgeting which priorities the effort to
achieve work results or the output of cost allocation planning or input stipulated.
Article 9
The provision in this Article means that Regions shall not budget expenses without prior certainty about
availability of funding resources and it encourages Regions to improve their expenditure efficiency.
Articles 10 and 11
Sufficiently clear
Article 12
Paragraph 1
The unexpected expenses budget is managed by the Regional General Treasurer.
Paragraph 2
Sufficiently clear
Article 13
Paragraph 1
Sufficiently clear
Paragraph 2
The Reserve Funds are used to finance such needs as rehabilitation of infrastructures, city
beauty, or conservation of the environment, so that the cost of rehabilitation is charged in several
fiscal years.
Article 14
Paragraph 1
Sufficiently clear
Paragraph 2
Other matters as referred to in letter h include :
a. preparation of multi-year budget plans;
b. procedures for shifting budgets;
c. system of administration of Regional Finance and the process of preparing APBD
calculations;
d. procedures for using budgets for unexpected expenses;
e. process for appointing Officials who Manage Regional Finance;
f. schedule and outline of the substance of reports on the implementation of APBD to DPRD;
g. approval of Regional Finance investment;
h. process of APBD amendment; and
i. process of depreciating Regional assets
Paragraphs 3 and 4
Sufficiently clear
Article 15
Paragraph 1
In this paragraph an integral unit means that the APBD document is a summary of all types of
income, types of expenditure and their funding resources.
Paragraphs 2 up to 4
Sufficiently clear
Article 16
Paragraph 1
The groups of income cover the Regional Original Income, Equilibrium Funds and other legal
incomes.
The types of incomes include Regional tax, Regional levies, General Allocation Funds and
Special Allocation Funds.
Paragraph 2
The expenditure by organization is an integral unit of expenditure users, such as DPRD and the
secretariat of DPRD, the Regional Head and Deputy Regional Head, Regional secretariat, as well
as Regional services and other Regional technical institutions.
The functions of expenditures include education, health and other functions.
The type of expenditures include those for of employees, goods, maintenance, official travel and
of capital/development.
Paragraph 3
The funding resources which are Regional Revenues include surplus of budget calculation of last
year, revenues of loans and bonds as well as the revenues of Regional asset sale which is
separated.
The financing sources which are expenses include payment of principal debt.
Article 17
Sufficiently clear
Article 18
Paragraph 1
Excepted from the APBD revenue sources in this paragraph are the Special Allocation Funds,
Emergency Funds and Regional Loans. The expenses which will be set aside for the
establishment of the Reserve Funds are mentioned in the expenditure budget.
Paragraph 2
"Record and managed in the APBD" means being entered in a separate account which shows the
initial balance, each transaction of revenue and expenses and the balance at the end of the fiscal
year.
Paragraph 3
Sufficiently clear
Paragraph 4
This final balance of the Reserve Funds in the year is entered as the initial balance in the
subsequent fiscal year and at the same time added to the Reserve Funds of the subsequent year.
Article 19
Paragraph 1
The Regional loans are mentioned in the Financial budget. The funds originating from the
Regional Loans are used to finance the activities as referred to in the existing regulations which
are valid for Regional Loans.
Paragraph 2
If the Regional Administration in the framework of constructing public facilities does not have
any funds the existing funds are not adequate, Regions can seek alternatives of long term funding
resources through cooperation with other parties, including the public.
The cooperation which has financial effects on APBD is governed by a Regional Regulation.
Paragraph 3
The investment in the form of capital participation means the participation of Regional capital
which is carried out through Regional corporations.
Deposits mean time deposits in a sound bank.
In the framework of the budgeting, the investment is mentioned in the financing budget.
Paragraphs 4 and 5
Sufficiently clear
Article 20
Paragraph 1
The description serves as an indicator and or a performance target of the Regional
Administration, which becomes a reference for the Accountability Report on Regional
performance.
Letter a
Sufficiently clear
Letter b
The service standard can be gradually developed and shall be sustainably conducted.
Letter c
Sufficiently clear
Paragraph 2
The expenditure budget analysis standard means the assessment of reasonability of the workload
and the cost of an activity.
The performance benchmark means the criteria for success which us achieved in each unit of
organization of the Regional apparatus.
The standard of cost means the unit price of cost which is valid for each Region.
Articles 21 and 22
Sufficiently clear
Article 23
Paragraph 1
Letters a and b
Sufficiently clear
Letter c
In this provision the urgent need is meant to overcome damage to the facilities and
infrastructures resulting from natural disasters and social disasters which are not yet or not
adequately provided with the budget of unexpected expenses.
Paragraph 2
A period of 3 (three) months is provided in order that the implementation can be completed at
the end of a certain fiscal year.
Article 24
Paragraph 1
Sufficiently clear
Paragraph 2
All benefits in the form of money are entered as the Regional Income and budgeted in APBD.
Paragraph 3
Sufficiently clear
Article 25
The said actions do not include the issuance of the decree which relates to the personnel affair, the
formation of which has been previously stipulated and the implementation of the budget if the APBD
draft is not or has not yet been approved by DPRD as referred to in Article 22.
Article 26
The Letter of Authorization Decision is a document of APBD which serves as a basis for spending at the
expense of APBD.
Article 27
Paragraph 1
The said evidence includes bills, invoices, letters of receipt of goods agreements on procurement
of goods and services.
Paragraph 2
Sufficiently clear
Article 28
Paragraph 1
Sufficiently clear
Paragraph 2
The order to pay is a document of APBD which serves as a basis for making payments at the
expense of APBD. The Order to pay is stipulated by the Regional General Treasurer or the
official who is stipulated by the Regional General Treasurer.
Paragraph 3
The Regional General Treasurer can stipulate the official which perform the duty of making
payment on the basis of the Order to Pay.
Article 29
Paragraph 1
Sufficiently clear
Paragraph 2
The additional income is provided in the framework of improving the welfare of employees on
the basis if the performance, place of duty and scarcity of professions.
Paragraph 3
Sufficiently clear
Paragraph 4
The Regional Civil Servants in this paragraph are the Regional Civil Servants who were
appointed by the Regional Administration as from January 1, 2001.
Article 30
Sufficiently clear
Article 31
Paragraph 1
The management of Regional goods covers planning, determination of needs, budgeting,
procurement, storage, distribution, maintenance, depreciation and control.
Paragraph 2
The recording based on the accountancy standard of the regional government is gradually carried
out in accordance with the conditions of each Region.
Paragraph 3
Sufficiently clear
Articles 32 up to 34
Sufficiently clear
Article 35
The financial accountancy standard of the regional administration serves as guidelines or principles
which govern the accountancy treatment, guaranteeing consistency in financial reporting.
As long as the financial accountancy standard of the regional administration is not yet prepared, Regions
can use the standard currently used.
The change toward the application of financial accountancy standard is gradually made in accordance
with the conditions of each Regional Administration.
Article 36
Paragraph 1
Sufficiently clear
Paragraph 2
The reasons shall specify whether the differences are caused by controlled or uncontrolled
factors.
Article 37
Paragraph 1
The said reports contain the progress of implementation of APBD per quarter.
Paragraph 2
Sufficiently clear
Article 38
Letter a
Sufficiently clear
Letter b
The APBD calculation notes contain the summaries of on the realization of Regional Income,
Regional Expenditure and Financing as well as Regional financial performance covering among
others :
a. the Regional performance in the framework of implementing the program which is planned
in the APBD of the relevant fiscal year;
b. service performance achieved;
c. part of the APBD expenditure which is used to finance the general administration,
operational activities and maintenance as well as capital/development expenditure for the
Regional apparatus and public service;
d. part of APBD expenditure which is used for the DPRD budget, including the secretariat of
DPRD;
e. position of Reserve Funds.
Letter c
Sufficiently clear
Letter d
The Regional balance sheet is gradually prepared the regional administration financial
accountancy standard in accordance with the conditions of each regional administration.
Article 39
Sufficiently clear
Article 40
In this paragraph the said control is not examination, but the control which is further aimed at
guaranteeing the achievement of targets which have been stipulated in APBD.
Article 41
Paragraph 1
Sufficiently clear
Paragraph 2
The Regional Regulation on Regency/City APBD is submitted to the Governor in his capacity as
the representative of the Central Government.
Article 42
Paragraph 1
The internal control of Regional financial management is aimed at safeguarding efficiency,
effectiveness and economy in the management of Regional Finance on behalf of the Regional
Head.
The internal control of Regional Financial management, in addition to controlling the
cash/money affairs, it takes into account the implementation of programs, activities and
management by the Regional Administration from the aspects of efficiency and effectiveness,
which can affect the capacity and usefulness of the Regional Finance.
Paragraph 2
Sufficiently clear
Paragraph 3
If the Regional Secretary or the head of the Regional Financial management apparatus carries out
promotion and supervision in the planning and implementation of work of the financial internal
control official, the financial internal control official remains obliged to report the outcome of his
control to the Regional Head.
Article 43
Sufficiently clear
Article 44
Paragraph 1
In this paragraph the Regional losses are concrete ones and their quantity is definite. The
Regional losses include payments from Regions to the people or statutory bodies that are not
entitled to them. Therefore, anyone or statutory body receiving such a payment is considered
having committed actions which are against the law.
Paragraph 2
Sufficiently clear
Articles 45 up to 49
Sufficiently clear
SUPPLEMENT TO STATUTE BOOK OF THE REPUBLIC OF INDONESIA No. 4022
NO. 105/2000 DATED NOVEMBER 10, 2000
ON REGIONAL FINANCIAL ACCOUNTABILITY AND MANAGEMENT
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering :
That in order to implement the provisions in Article 86 of Law No. 22/1999 on the Regional Administration and
Article 26 of Law No. 25/1999 on the Financial Equilibrium between the Central Government and the Regional
Administration, it is necessary to stipulate a Government Regulation on the Regional Financial Accountability
and Management;
In view of :
1. Article 5 paragraph 2 of the 1945 Constitution as already amended by the Second Amendment to the 1945
Constitution;
2. Law No. 22/1999 on the Regional Administration (Statute Book No. 60/1999, Supplement to Statute Book
No. 3839);
3. Law No. 25/1999 on the Financial Equilibrium between the Central Government and the Regional
Administration (Statute Book No. 70/1999, Supplement to Statute Book No. 3848).
DECIDES:
To Stipulate :
GOVERNMENT
MANAGEMENT.
REGULATION
ON
REGIONAL
FINANCIAL
ACCOUNTABILITY
AND
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Government Regulation referred to as :
1. Regional Finance shall be all Regional rights and obligations in the framework of implementing Regional
administration which can be valued by money including all forms of assets which are related to the relevant
Regional rights and obligations, in the context of the Regional Budget.
2. The Regional Budget of Income and Expenditures, which is hereinafter abbreviated to APBD, shall be a
Regional annual financial plan, which is stipulated on the basis of the Regional Regulation on APBD.
3. The Official who Manages Regional Finance shall be the Regional official and or employee who is given
certain authority to manage the Regional Finance in the framework of Regional financial management and
based on the existing regulations.
4. The Holder of General Power for Regional Financial Management shall be the Regional Head, who due to
his post, has the authority to carry out the whole Regional financial management and has the obligation to
submit the accountability for the implementation of the said authority to the Regional Legislative Assembly
(DPRD).
5. Regional General Treasurer shall be the official who is given the authority by the Holder of Gene ral Power
for Regional Financial Management to manage the revenue and expenses of the Regional Treasury and all
forms of other Regional assets.
6. The User of Regional Budget shall be the official holding the power to realize the Regional Expenditure.
7. Regional Treasury shall be the place for keeping Regional funds which is determined by the Regional
General Treasurer.
8. Holder of Treasury shall be anyone who is appointed and assigned to carry out treasury activities in the
framework of carrying out the APBD in each working unit of the Regional Budget User.
9. Reserve Funds shall be the funds which are put aside to meet the needs which require relatively quite big
funds which cannot be borne in a fiscal year.
10. Revenue shall be all revenues of the Regional Treasury in a certain fiscal year period.
11. Regional Expenses shall be all expenses of the Regional Treasury in a certain fiscal year period.
12. Regional Income shall be all revenues of the Regional Treasury in a certain fiscal year period, which
becomes the right of the relevant Region.
13. Regional Expenditure shall be all expenses of the Regional Treasury in a certain fiscal year period, which
becomes the burden of the relevant Region.
14. Financing shall be the Regional Financial transaction which is intended to cover the difference between the
Regional Income and the Regional Expenditure.
15. Surplus Balance of Last Year's APBD Calculation shall be the surplus of Regional income realization over
Regional expenditure realization and it shall constitute a component of financing.
16. Regional Goods shall be all goods owned by the Region which originate form the purchase with the funds
which wholly or partially are derived from the APBD or other legal acquisitions.
17. Regional Debts shall be the amount which shall be paid by Region as a consequence of delivery of money,
goods and or other services to the Region or other consequences based on the existing regulations.
18. Regional Claims shall be the amount which becomes the right of the Region or the obligation of another
party to the Region as a consequences of delivery of money, goods and or services by Region or other
consequences based on the existing regulations.
19. Regional Loans shall be all transactions which cause the Region to receive from another party a sum of
money or benefit of money worth, so that the Region is charged with the obligation to repay, excluding the
short term credit which generally takes place in the trade.
20. Regional Apparatus shall be the person/institution in the Regional Administration/who which is responsible
to the Regional Head and assists the Regional Head in carrying out the administration comprising the
regional secretariat, regional services and technical regional institutions, districts, and subdistricts in
accordance with Regional needs.
CHAPTER II
REGIONAL FINANCIAL MANAGEMENT
First Part
Official Who Manages Regional Finance
Article 2
1. The Regional Head is the Holder of General Power for Regional Financial Management.
2. In his capacity as the Official who Holds General Power for Regional Financial Management as referred to
in paragraph 1, the Regional Head delegates his authority partially or wholly to the Regional Secretary and
or the Apparatus Who Manages Regional Finance.
Article 3
1. The Regional Head first stipulates the Officials Who Manage Regional Finance by a letter of decision in
order to be able to carry out the budget.
2. Further stipulations on the duties and functions of each Official Who Manages Regional Finance are
stipulated in a Regional Regulation.
3. The Treasury Holder shall not hold the post as the Official Who Manages Finance of other Regions.
Second Part
General Principles of Regional Financial Management
Article 4
The Regional Financial Management is carried out in an orderly, law-abiding, efficient, effective, transparent
and responsible manner by taking into account the principles of justice and propriety.
Article 5
The APBD is the basis for the Regional Financial Management in a certain fiscal year.
Article 6
The APBD fiscal year is the same as the fiscal year of the State Budget Income and Expenditure.
Article 7
1. All Regional Revenues and Regional Expenses in the framework of decentralization are recorded and
managed in the APBD.
2. The APBD, Amendment to APBD, and Calculation of APBD are stipulated by a Regional Regulation and
they constitute Regional documents.
Article 8
The APBD is prepared by the approach of performance.
Article 9
In preparing the APBD, the budgeting of expenditures shall be supported by the certainty that the revenues in
adequate amounts are available.
Article 10
1. The total income budgeted in the APBD is a rationally measured estimate which can be achieved for any
source of income.
2. The total expenditure budgeted in the APBD is the highest limit for any type of expenditure.
3. Any official shall not take actions which result in the expenses charged to the APBD, if there is no adequate
budget or if there is no budget to finance the expenses.
4. The estimated APBD Calculation Surplus Balance of Last Year is booked in the initial balance of the APBD
of the subsequent year, while the realization of the Excessive Balance of Last Year's APBD Calculation is
recorded as the initial balance in the APBD amendment.
Article 11
All Regional financial transactions, both Regional Revenues and Regional Expenses are carried out through the
Regional Treasury.
Article 12
1. The budget to finance unexpected expenses is provided in a separate budget section.
2. The expenses which are charged to the unexpected expenses are intended to handle natural disasters, social
disasters and other unexpected expenses which are considerably needed to carry out the authority of the
Regional Administration.
Article 13
1. Regions can set up Reserve Funds to finance the needs which cannot be borne in a fiscal year.
2. The Reserve Funds are set up by annual contributions from APBD revenues, apart from the Special
Allocation Funds, Regional Loans and Emergency Funds.
Third Part
Arrangement of Regional Financial Management
Article 14
1. The provisions on the principles of Regional Financial Management are stipulated by a Regional Regulation
in accordance with the existing regulations.
2. The Regional Regulation as referred to in paragraph 1 stipulates the following matters :
a. framework and outlines of procedures for preparation of APBD;
b. financial authority of the Regional Head and DPRD;
c. principles of treasury management;
d. principles of management of Regional Expenses which have been budgeted;
e. procedures for procurement of goods and services;
f. procedures for seeking Regional Loans;
g. procedures for financial accountability;
h. and other matters involving the management of Regional Finance.
3. The system and procedures for management of Regional Finance are stipulated by a Decision of the
Regional Head in accordance with the Regional Regulation as referred to in paragraph 1.
4. The guidelines on the processing, accountability and control of Regional Finance as well as the procedures
of preparation of the APBD, the implementation of the administration of Regional Finance and the
preparation of calculation are stipulated by a Decree of the Minister of Home Affairs and Regional
Autonomy.
CHAPTER III
PREPARATION AND STIPULATION OF APBD
First Part
Structure of APBD
Article 15
1. The structure of APBD is an integral unit which consists of :
a. Regional Income;
b. Regional Expenditure;
c. Financing.
2. The Surplus Balance of the Regional Income over the Regional Expenditure is called budget surplus
3. The Deficit balance of the Regional Income over the Regional Expenditure is called budget deficit
4. The total Financing is the same as the total surplus/deficit of budget.
Article 16
1. The Regional Income as referred to in Article 15 paragraph 1 letter a is detailed by groups of income and
types of income
2. The Regional Expenditure as referred to in Article 15 paragraph 1 letter b is detailed by organizations,
functions and types of expenditure.
3. The financing as referred to in Article 15 paragraph 1 letter c is detailed by sources of financing.
Article 17
The budget to finance the unexpected expenses as referred to in Article 12 paragraph 2 is provided in the
budget section of unexpected expenses.
Article 18
1. The budgeting of Reserve Funds as referred to in Article 13 is allocated from APBD revenue sources.
2. All Reserve Funds revenue sources as referred to in paragraph 1 and all expenses at the expense of the
Reserve Funds are recorded and managed in the APBD.
3. The expenses to cover the requirement as stipulated in the Regional Regulation on the establishment of
Reserve Funds is charged to the account of Reserve Funds.
4. The position of the Reserve Funds is reported as an inseparable part of the APBD accountability report.
Article 19
1. If the Regional Income is anticipated to be smaller than the expenditure plan, the Region can seek loans.
2. The Regional Administration can seek other funding resources through cooperation with other parties with
the principles of mutual benefit.
3. The Regional Administration can carry out investment in the form of capital participation, deposits or other
investment forms as long as they can promote public service and do not affect the liquidity of the Regional
Administration.
4. Other funding resources and investments of the Regional Administration as referred to in paragraphs 2 and 3
are stipulated by a Regional Regulation.
5. The Regional Administration is responsible for the management of other funding resources and investments
as referred to in paragraph 4 and at the end of each year reports the outcome of the implementation to the
DPRD.
Second Part
Process of APBD Preparation
Article 20
1. The APBD which is prepared by the approach of performance as referred to in Article 8 contains :
a. the expected target in accordance with the function of expenditure;
b. the expected standard of service and the estimated component unit cost of the relevant activity;
c. part of the APBD income which finances the expenditure of general administration, operation and
maintenance, and of capital/development.
2. To assess the financial performance of the Regional Administration, the budget analysis standard,
benchmark of performance and cost standard are developed.
Article 21
In preparing the APBD draft, the Regional Administration and the DPRD jointly formulate the direction and
general policy of the APBD.
Based on the direction and general policy of the APBD as referred to in paragraph 1, the Regional
Administration prepares strategies and priorities of APBD.
Based on the strategies and priorities of APBD as referred to in paragraph 2 and by taking into account the
economic and financial conditions of Regions, the Regional Administration prepares the APBD draft.
Third Part
Process of APBD Stipulation
Article 22
1. The Regional Head submits the APBD draft to the DPRD for approval
2. If the APBD draft is rejected by the DPRD, the Regional Administration shall revise the said draft of
APBD.
3. The revision of the APBD draft as referred to in paragraph 2 shall be re-submitted to the DPRD.
4. If the APBD draft as referred to in paragraph 3 is rejected by the DPRD, the Regional Administration uses
of the APBD of previous year as the basis for processing Regional Finance.
Fourth Part
APBD Amendment
Article 23
1. The APBD Amendment is carried out in connection with :
a. Policies of the Central Government and Regional Administration which are strategic;
b. Adjustments resulting from the failure to achieve the target of Regional Revenue which has been set;
c. Emergence of urgent needs.
2. The APBD amendment is stipulated at the latest 3 (three) months before a certain fiscal year ends.
CHAPTER IV
IMPLEMENTATION OF APBD
First Part
Revenues and Expenses of APBD
Article 24
1. Any Regional Apparatus which has the duty of collecting or receiving Regional Income shall carry out the
intensification of collection of the income.
2. All benefits in the form of money, such as commissions, rabates, discounts, interests or other names
resulting from sale and or procurement of goods and or services and from deposits and or placement of
Regional money constitute Regional Income.
3. The Regional Income is fully and punctually paid to the Regional Treasury in accordance with the existing
regulations.
Article 25
Actions resulting in the expenses being borne by the APBD cannot be carried out before being stipulated in the
Regional Regulation on APBD and placed in the Regional Gazette.
Article 26
For any expense borne by the APBD, an Authorization Decision Letter or other letters of decision which are
equivalent to it are issued by the authorized official.
Article 27
1. Any charge to APBD shall be supported by complete and legal evidences on the rights acquired by the
collecting party.
2. Anyone provided with the authority to sign and or legalize the evidence letter serving the basis for expenses
on the charged to APBD is responsible for the truth and consequence of the use of the evidence.
Article 28
1. The User of Regional Budget submits the Payment Request Letter to carry out the expenses as referred to in
Article 27 paragraph 2.
2. The payment at the expense of the APBD is made by the Letter of Order to pay.
3. The Regional General Treasurer pays on the basis of the Letter of Order to pay.
Article 29
1. Salaries of Regional Civil Servants are borne by the APBD
2. Regional Civil Servants are provided with additional income based on objective considerations by taking
into account the capacity of Regional Finance and obtaining the approval of the DPRD in accordance with
the existing regulations
3. The salaries of the Regional Civil Servants who are employed to support the Regional State-owned
Enterprises (BUMDs) or other business units are borne by the relevant BUMD or Business Unit.
4. The payments for pensions of the Regional Civil Servants who are appointed by the Regional
Administration are the responsibilities of Regions.
Article 30
The use of the unexpected budget as referred to in Article 17 is notified to the DPRD.
Second Part
Regional Goods Management
Article 31
1. The Regional Head regulates the management of Regional Goods.
2. The Recording of Regional Goods is carried out in accordance with the accountancy standard of the
Regional Administration.
3. The Regional Secretary, Secretary of DPRD and heads of services/technical institutions are the users and
managers of goods for the Regional secretariat/DPRD secretariat/Regional services/Regional technical
institutions they head.
Article 32
1. The procurement of goods and or services can only be charged to the APBD, as long as the goods and or
services are needed to carry out the activities in accordance with the main duties and functions of the
relevant Regional Apparatus.
2. The procurement of goods and services at the expense of the APBD is further stipulated by a Decision of the
Regional Head.
Article 33
The user of goods shall manage Regional Goods in accordance with the existing regulations.
Article 34
In the case that the management of Regional goods earns revenues, all of the revenues are wholly and directly
paid to the Regional Treasury.
Third Part
Financial Accountancy of Regional Administration
Article 35
The administration and accountability of Regional Finance adhere to the existing financial accountancy
standard of the regional administration.
CHAPTER V
APBD CALCULATION
Article 36
1. At the end of each fiscal year the Regional Administration shall make calculation of APBD containing the
ratio between realization of APBD and the APBD.
2. The APBD calculation shall calculate the differences between the realization of revenue and the revenue
budget and the realization of expenses and the expenses budget by providing the reasons.
CHAPTER VI
REGIONAL FINANCIAL ACCOUNTABILITY
Article 37
1. The Regional Administration submits quarterly reports on the implementation of APBD to DPRD.
2. The quarterly reports as referred to in paragraph 1 are submitted at the latest 1 (one) month after the end of
the relevant quarter.
Article 38
The Regional Head prepares Regional Financial accountability reports consisting of :
a. APBD calculation reports;
b. APBD Calculation Notes;
c. Cash Flow Reports;
d. Regional Balance Sheet.
Article 39
1. Any Official who Manages Regional Finance periodically prepares financial accountability reports.
2. The system and procedures for the accountability as referred to in paragraph 1 are stipulated by a Decision
of the Regional Head.
CHPTER VII
CONTROL OF REGIONAL FINANCIAL MANAGEMENT
Article 40
This control over the implementation of APBD is exercised by DPRD.
Article 41
1. The Regional Regulation on APBD, APBD Amendment and Provincial APBD Calculation are submitted to
the Minister of Home Affairs and Regional Autonomy at the latest 15 (fifteen) days after being stipulated.
2. The Regional Regulation on APBD, APBD Amendment and Regency/City APBD Calculation are submitted
to Governor at the latest 15 (fifteen) days after being stipulates.
Article 42
1. The Regional Head appoints the official who functions to exercise internal control over the management of
Regional Finance
2. The official who exercises control over Regional Financial management as referred to in paragraph 1 shall
not hold another post in the Regional administration
3. The official who exercises control over Regional Financial management as referred to in paragraph 1 reports
the outcome of the control to the Regional Head.
CHAPTER VIII
REGIONAL FINANCIAL AUDIT
Article 43
The audit of the implementation, management and accountability of Regional Finance is carried out in
accordance with the existing regulations.
CHAPTER IX
REGIONAL FINANCIAL LOSSES
Article 44
1. All Regional losses both direct and indirect resulting from actions which violate law or negligence shall be
compensated by the people who commit the violation or carelessness.
2. Any Regional apparatus shall demand compensations for the loss as soon after finding out that in the
Regional Apparatus, losses are inflicted by the actions of whatever parties.
Article 45
1. The Regional Head shall carry out the compensation claim for any loss resulting from the actions which
violate law or negligence of the Official Who Manages the Regional Finance
2. The settlement of the loss as referred to in paragraph 1 is carried out in accordance with the existing
regulations.
Article 46
Further provisions on the compensation claim are stipulated by a Regional Regulation
CHAPTER X
CLOSING PROVISIONS
Article 47
At the time this Government Regulation takes effect :
1. The Government Regulation No. 5/1975 on the Processing, Accountability and Control of Regional Finance
(Statute Book No. 5/1975);
2. The Government Regulation No. 6/1975 on the Method of Preparing the Regional Budget, Administration
of Regional Finance and Preparation of APBD Calculation (Statute Book No. 6/1975);
are declared void
Article 48
At the time this Government Regulation takes effect, all regulations implementing the Government Regulation
No. 5/1975 on the Processing, Accountability and Control of Regional Finance and the Government Regulation
No. 6/1975 on the Method of Preparing the Regional Budget, Administration of Regional Finance and
Preparation of APBD Calculation are still valid as long as they are not against and or have not been replaced
with a new regulation based on this Government Regulation.
Article 49
This Government Regulation shall come into force as from January 1, 2001.
For public cognizance, this Government Regulation shall be announced by publishing it in the Statute Book of
the Republic of Indonesia.
Stipulated in Jakarta
on November 10, 2000
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
sgd.
ABDURRAHMAN WAHID
Promulgated in Jakarta
on November 2000
THE STATE SECRETARY,
sgd.
DJOHAN EFENDI
STATUTE BOOK OF THE REPUBLIC OF INDONESIA NO. 202/2000
ELUCIDATION
ON
GOVERNMENT REGULATION NO. 105/2000
ON REGIONAL FINANCIAL ACCOUNTABILITY AND MANAGEMENT
GENERAL
Based on Law No. 22/1999 on the Regional Administration and Law No. 25/1999 on the Financial
Equilibrium between the Central Government and the Regional Administration, the Central Government and the
Regional Administration constitute an inseparable entity in carrying out the administration and public service.
The major mission of both laws is not only the desire to transfer the authority and financing from the Central
Government to the Regional Administration, but more importantly the desire to improve the efficiency and
effectiveness of Regional financial resources management in order to improve people's welfare and public
service. For that purpose, the spirit of decentralization, democratization, transparency, and accountability
becomes very dominant in the process of carrying out the administration in general, and the process of Regional
financial management in particular.
In the framework of the system of carrying out the administration, the system of financial management
is basically the sub system of the administration itself. As a state financial system as referred to in Article 23
paragraph 5 of the 1945 Constitution, the aspect of Regional financial management is also a sub system which
is stipulated in Law No. 22/1999 on the Regional Administration particularly Article 78 up to Article 86. Article
80 stipulates that the financial equilibrium between the Central Government and the Regional Administration is
stipulated by a law. By that arrangement, it is expected that there will be more transparent and accountable
equilibrium in the distribution of authority, financing and the formulation of a better system of financial
management to realize the implementation of Regional autonomy in an optimal way in accordance with the
dynamics and the demands of a developing society.
In line with those matters, the Regional autonomy cannot certainly be seen only from the amount of
Balance Funds Regions will obtain but also the extent to which the instrument or the system of Regional
Financial management is able to provide financial management which is fairer, more rational, more transparent,
participative and responsible as referred to in both laws.
Specifically Law No. 25/1999 on the Financial Equilibrium between the Central Government and the
Regional Administration has stipulated a clear basis for management and accountability of Regional finance,
among others by providing freedom in stipulating products the following arrangements :
Provisions on principles of Regional Finance are stipulated by a Regional Regulation;
Systems and procedures for management of Regional Finance are stipulated by a Decision of the Regional Head
in accordance with the relevant Regional Regulation
The Regional Head submits accountability reports to the DPRD concerning the management of Regional
Finance and Regional financial performance from the aspects of financial efficiency and effectiveness;
The Regional Financial accountability reports constitute Regional documents, so that the public can be
informed of them.
Therefore, referring to the spirit of both laws, the guidelines on management and accountability of
Regional Finance which are governed in this Government Regulation are general and they put more emphasis
on the principles, norms, and general bases for management of Regional Finance. Meanwhile, the systems and
procedures for detailed management of Regional Finance are stipulated by each Region. The diversity is made
possible to happen as long as it is still in line with or is not against this Government Regulation. That effort is
expected to make Regions more responsible, creative and able to take initiatives in improving and updating the
systems and procedures as well as continuously reviewing the system in the hope of maximizing the efficiency
and effectiveness based on the local conditions, requirements and capacity.
ARTICLE BY ARTICLE
Article 1
Sufficiently clear
Article 2
Paragraph 1
The general power for Regional Financial management includes the function of general
planning, the function of preparing budgets, the function of collecting income, the function of the
Regional general treasury, the function of using budgets, as well as the function of control and
accountability.
Paragraph 2
In the framework of efficiency and effectiveness of Regional Financial management, the
Regional Head delegates his authority partially or wholly to the Regional financial management
apparatus;
The delegated authority minimally constitutes the authority which relates to the duties as the
Regional General Treasurer.
The Regional Secretary or the Regional financial management apparatus are responsible to the
Holder of General Power for Regional Financial Management.
Article 3
Paragraph 1
The stipulation of the Official who Manages Regional Finance is one of the requirements for
implementing the Budget. The Officials who Manages Regional Finance, covers e.g. the
Regional General Treasurer, Budget User and Treasury Holder.
Paragraphs 2 and 3
Sufficiently clear
Article 4
Sufficiently clear
Article 5
This provision means that APBD is the plan for implementing all Regional Income and all Regional
Expenditure in the framework of implementing decentralization in a certain fiscal year. In that way, the
collection of all Regional Revenues in the framework of implementing decentralization is aimed at
meeting the target stipulated in the APBD. All Regional Expenses and commitments which create
burdens on Regions in the framework of implementing the decentralization are carried out in accordance
with the quantity and target stipulated in the APBD, so that APBD becomes the basis for the control,
audit, and the supervision of Regional Finance.
Article 6
Sufficiently clear
Article 7
Paragraph 1
All Regional Revenues and Regional Expenses which are not related to the implementation of
deconcentration or Supporting Duties are the revenues and expenses in the framework of
implementing decentralization.
Paragraph 2
Sufficiently clear
Article 8
The budget with the performance approach is a system of budgeting which priorities the effort to
achieve work results or the output of cost allocation planning or input stipulated.
Article 9
The provision in this Article means that Regions shall not budget expenses without prior certainty about
availability of funding resources and it encourages Regions to improve their expenditure efficiency.
Articles 10 and 11
Sufficiently clear
Article 12
Paragraph 1
The unexpected expenses budget is managed by the Regional General Treasurer.
Paragraph 2
Sufficiently clear
Article 13
Paragraph 1
Sufficiently clear
Paragraph 2
The Reserve Funds are used to finance such needs as rehabilitation of infrastructures, city
beauty, or conservation of the environment, so that the cost of rehabilitation is charged in several
fiscal years.
Article 14
Paragraph 1
Sufficiently clear
Paragraph 2
Other matters as referred to in letter h include :
a. preparation of multi-year budget plans;
b. procedures for shifting budgets;
c. system of administration of Regional Finance and the process of preparing APBD
calculations;
d. procedures for using budgets for unexpected expenses;
e. process for appointing Officials who Manage Regional Finance;
f. schedule and outline of the substance of reports on the implementation of APBD to DPRD;
g. approval of Regional Finance investment;
h. process of APBD amendment; and
i. process of depreciating Regional assets
Paragraphs 3 and 4
Sufficiently clear
Article 15
Paragraph 1
In this paragraph an integral unit means that the APBD document is a summary of all types of
income, types of expenditure and their funding resources.
Paragraphs 2 up to 4
Sufficiently clear
Article 16
Paragraph 1
The groups of income cover the Regional Original Income, Equilibrium Funds and other legal
incomes.
The types of incomes include Regional tax, Regional levies, General Allocation Funds and
Special Allocation Funds.
Paragraph 2
The expenditure by organization is an integral unit of expenditure users, such as DPRD and the
secretariat of DPRD, the Regional Head and Deputy Regional Head, Regional secretariat, as well
as Regional services and other Regional technical institutions.
The functions of expenditures include education, health and other functions.
The type of expenditures include those for of employees, goods, maintenance, official travel and
of capital/development.
Paragraph 3
The funding resources which are Regional Revenues include surplus of budget calculation of last
year, revenues of loans and bonds as well as the revenues of Regional asset sale which is
separated.
The financing sources which are expenses include payment of principal debt.
Article 17
Sufficiently clear
Article 18
Paragraph 1
Excepted from the APBD revenue sources in this paragraph are the Special Allocation Funds,
Emergency Funds and Regional Loans. The expenses which will be set aside for the
establishment of the Reserve Funds are mentioned in the expenditure budget.
Paragraph 2
"Record and managed in the APBD" means being entered in a separate account which shows the
initial balance, each transaction of revenue and expenses and the balance at the end of the fiscal
year.
Paragraph 3
Sufficiently clear
Paragraph 4
This final balance of the Reserve Funds in the year is entered as the initial balance in the
subsequent fiscal year and at the same time added to the Reserve Funds of the subsequent year.
Article 19
Paragraph 1
The Regional loans are mentioned in the Financial budget. The funds originating from the
Regional Loans are used to finance the activities as referred to in the existing regulations which
are valid for Regional Loans.
Paragraph 2
If the Regional Administration in the framework of constructing public facilities does not have
any funds the existing funds are not adequate, Regions can seek alternatives of long term funding
resources through cooperation with other parties, including the public.
The cooperation which has financial effects on APBD is governed by a Regional Regulation.
Paragraph 3
The investment in the form of capital participation means the participation of Regional capital
which is carried out through Regional corporations.
Deposits mean time deposits in a sound bank.
In the framework of the budgeting, the investment is mentioned in the financing budget.
Paragraphs 4 and 5
Sufficiently clear
Article 20
Paragraph 1
The description serves as an indicator and or a performance target of the Regional
Administration, which becomes a reference for the Accountability Report on Regional
performance.
Letter a
Sufficiently clear
Letter b
The service standard can be gradually developed and shall be sustainably conducted.
Letter c
Sufficiently clear
Paragraph 2
The expenditure budget analysis standard means the assessment of reasonability of the workload
and the cost of an activity.
The performance benchmark means the criteria for success which us achieved in each unit of
organization of the Regional apparatus.
The standard of cost means the unit price of cost which is valid for each Region.
Articles 21 and 22
Sufficiently clear
Article 23
Paragraph 1
Letters a and b
Sufficiently clear
Letter c
In this provision the urgent need is meant to overcome damage to the facilities and
infrastructures resulting from natural disasters and social disasters which are not yet or not
adequately provided with the budget of unexpected expenses.
Paragraph 2
A period of 3 (three) months is provided in order that the implementation can be completed at
the end of a certain fiscal year.
Article 24
Paragraph 1
Sufficiently clear
Paragraph 2
All benefits in the form of money are entered as the Regional Income and budgeted in APBD.
Paragraph 3
Sufficiently clear
Article 25
The said actions do not include the issuance of the decree which relates to the personnel affair, the
formation of which has been previously stipulated and the implementation of the budget if the APBD
draft is not or has not yet been approved by DPRD as referred to in Article 22.
Article 26
The Letter of Authorization Decision is a document of APBD which serves as a basis for spending at the
expense of APBD.
Article 27
Paragraph 1
The said evidence includes bills, invoices, letters of receipt of goods agreements on procurement
of goods and services.
Paragraph 2
Sufficiently clear
Article 28
Paragraph 1
Sufficiently clear
Paragraph 2
The order to pay is a document of APBD which serves as a basis for making payments at the
expense of APBD. The Order to pay is stipulated by the Regional General Treasurer or the
official who is stipulated by the Regional General Treasurer.
Paragraph 3
The Regional General Treasurer can stipulate the official which perform the duty of making
payment on the basis of the Order to Pay.
Article 29
Paragraph 1
Sufficiently clear
Paragraph 2
The additional income is provided in the framework of improving the welfare of employees on
the basis if the performance, place of duty and scarcity of professions.
Paragraph 3
Sufficiently clear
Paragraph 4
The Regional Civil Servants in this paragraph are the Regional Civil Servants who were
appointed by the Regional Administration as from January 1, 2001.
Article 30
Sufficiently clear
Article 31
Paragraph 1
The management of Regional goods covers planning, determination of needs, budgeting,
procurement, storage, distribution, maintenance, depreciation and control.
Paragraph 2
The recording based on the accountancy standard of the regional government is gradually carried
out in accordance with the conditions of each Region.
Paragraph 3
Sufficiently clear
Articles 32 up to 34
Sufficiently clear
Article 35
The financial accountancy standard of the regional administration serves as guidelines or principles
which govern the accountancy treatment, guaranteeing consistency in financial reporting.
As long as the financial accountancy standard of the regional administration is not yet prepared, Regions
can use the standard currently used.
The change toward the application of financial accountancy standard is gradually made in accordance
with the conditions of each Regional Administration.
Article 36
Paragraph 1
Sufficiently clear
Paragraph 2
The reasons shall specify whether the differences are caused by controlled or uncontrolled
factors.
Article 37
Paragraph 1
The said reports contain the progress of implementation of APBD per quarter.
Paragraph 2
Sufficiently clear
Article 38
Letter a
Sufficiently clear
Letter b
The APBD calculation notes contain the summaries of on the realization of Regional Income,
Regional Expenditure and Financing as well as Regional financial performance covering among
others :
a. the Regional performance in the framework of implementing the program which is planned
in the APBD of the relevant fiscal year;
b. service performance achieved;
c. part of the APBD expenditure which is used to finance the general administration,
operational activities and maintenance as well as capital/development expenditure for the
Regional apparatus and public service;
d. part of APBD expenditure which is used for the DPRD budget, including the secretariat of
DPRD;
e. position of Reserve Funds.
Letter c
Sufficiently clear
Letter d
The Regional balance sheet is gradually prepared the regional administration financial
accountancy standard in accordance with the conditions of each regional administration.
Article 39
Sufficiently clear
Article 40
In this paragraph the said control is not examination, but the control which is further aimed at
guaranteeing the achievement of targets which have been stipulated in APBD.
Article 41
Paragraph 1
Sufficiently clear
Paragraph 2
The Regional Regulation on Regency/City APBD is submitted to the Governor in his capacity as
the representative of the Central Government.
Article 42
Paragraph 1
The internal control of Regional financial management is aimed at safeguarding efficiency,
effectiveness and economy in the management of Regional Finance on behalf of the Regional
Head.
The internal control of Regional Financial management, in addition to controlling the
cash/money affairs, it takes into account the implementation of programs, activities and
management by the Regional Administration from the aspects of efficiency and effectiveness,
which can affect the capacity and usefulness of the Regional Finance.
Paragraph 2
Sufficiently clear
Paragraph 3
If the Regional Secretary or the head of the Regional Financial management apparatus carries out
promotion and supervision in the planning and implementation of work of the financial internal
control official, the financial internal control official remains obliged to report the outcome of his
control to the Regional Head.
Article 43
Sufficiently clear
Article 44
Paragraph 1
In this paragraph the Regional losses are concrete ones and their quantity is definite. The
Regional losses include payments from Regions to the people or statutory bodies that are not
entitled to them. Therefore, anyone or statutory body receiving such a payment is considered
having committed actions which are against the law.
Paragraph 2
Sufficiently clear
Articles 45 up to 49
Sufficiently clear
SUPPLEMENT TO STATUTE BOOK OF THE REPUBLIC OF INDONESIA No. 4022