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Service Delivery and Financial Management in a New Province 46313 Service Delivery and Financial Management in a New Province Gorontalo Public Expenditure Analysis 2008 GPEA THE WORLD BANK OFFICE JAKARTA Jakarta Stock Exchange Building Tower II/12-13th Fl. Jl. Jend. Sudirman Kav. 52-53 Jakarta 12910 Tel: (6221) 5299-3000 Fax: (6221) 5299-3111 THE WORLD BANK The World Bank 1818 H Street N.W. Washington, D.C. 20433 USA Tel: (202) 458-1876 Fax: (202) 522-1557/1560 Email: [email protected] Website: www.worldbank.org Printed in March 2008 Cover photographs Top left: Copyright © Bambang Supriyanto (University of Gorontalo) Top right, bottom right: Copyright © Province of Gorontalo’s Bapppeda Bottom left, bottom middle: Copyright © Bastian Zaini Inside photographs Copyright © Bambang Supriyanto (University of Gorontalo): Executive Summary and Chapter 5. Copyright © Province of Gorontalo’s Bapppeda: Chapter 1, Chapter 6, and Annexes. Copyright © Bastian Zaini: Inside Cover, Chapter 2, Chapter 3, and Chapter 4. Gorontalo Public Expenditure Analysis: Service Delivery and FinancialManagement in a New Province is a product of staff of the World Bank. The fi ndings, interpretation and conclusion expressed herein do not necessarily refl ect the views of the Board of Executive Directors of the World Bank or the government they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denomination and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement of acceptance of such boundaries. For any questions regarding this report, please contact Bastian Zaini, [email protected]. Service Delivery and Financial Management in a New Province Gorontalo Public Expenditure Analysis Gorontalo Public Expenditure Analysis Acknowledgments This report was prepared by a team from the World Bank led by Bastian Zaini, together with Bambang Sukarnoko, Eleonora Suk Mei Tan, John Theodore Weohau, and Diane Zhang. The core team also comprised Akhmad Bayhaqi, Caroline Tupamahu, Sukmawah Yuningsih, and Yudha Permana. The team from the University of Gorontalo was led by Bambang Supriyanto and included Bachtiar, Duke Arie Widagdo, Elvis Mus Abdul, Fitriary A. Puhi, Hartati Inaku, Ilyas Lamuda, Mohamad Rolli Paramata, Razak H. Umar, Syamsul Qamar Ngabito. The University of Gorontalo team prepared the background of the report and managed the initial data collection and analysis. Wolfgang Fengler supervised the overall process. Richard Manning and Petrarca Karetji provided outreach and facilitation to the provincial government. The report benefi ted from valuable inputs from peer reviewers Claudia Rokx and Daan Pattinasarany from the World Bank. Valuable comments were also received from Ahmad Zaki Fahmi, Ahya Ihsan, Andy Ragatz, Cut Dian Rahmi, Javier Arze Del Granado, Steen Sonne Andersen, and Soekarno Wirokartono. Input from Enrique Blanco Armas and Peter Milne in the latter stages were of particular value. Thanks also go to Peter Milne for editing, Arsianti for assisting with formatting and production, and Sylvia Njotomihardjo for logistical support. The team would like to express its gratitude to all the technical agencies (Dinas) involved in the data collection and analysis. The team is especially grateful to Governor Fadel Muhammad, Ibu Winarni Monoarfa (Head of Gorontalo’s Provincial Bappeda), and Bapak Andha Miraza (Head of Gorontalo’s BKD) for their continuous support and commitment. Appreciation also goes to the Dutch government, which provided substantial fi nancial support. iv Service Delivery and Financial Management in a New Province Gorontalo Public Expenditure Analysis Foreword As one of Indonesia’s recently established provinces, since 2001 Gorontalo has faced numerous challenges, the most daunting being one of the country’s highest levels of poverty. Gorontalo’s sub-national governments shoulder a heavy responsibility in ensuring the rapid development of the region, alleviating poverty and improving the provision of basic public services — especially in education and health — and making sure those services reach the poorest and most vulnerable groups. In performing these crucial tasks, the success of sub-national governments depends to a large degree on three factors: the ability of sub-national governments to defi ne and then translate their visions for development into eff ective development plans; the existing capacity of the government bureaucracy; and the availability of budgetary resources. A clear and well-articulated vision is needed to guide regional development, one that should serve to synergize the eff orts of multiple stakeholders to make full use of the latent potential that exists in Gorontalo. Moreover, for a region with limited resources such as Gorontalo, strong leadership is needed to encourage the people to make the best possible use of those resources in providing a better future to all levels of society. Since becoming a new province, Gorontalo has demonstrated that high levels of poverty need not be an obstacle to implementing good governance, formulating an eff ective development vision or ensuring sound development planning. Successful poverty alleviation depends most on identifying dormant local potential and focusing eff orts to stimulate growth from this potential. Gorontalo has started such eff orts with its Corn Agropolitan Program and the development of Tomini Bay, one of eastern Indonesia’s fi sheries development showcases. The province of Gorontalo is one of the leaders in local government reform, especially in public fi nancial management and government bureaucracy. For instance, in 2003 Gorontalo applied performance-based budgeting principles in preparing its budget, while in 2004 it started to develop minimum service standards for several fi nancial services, together with cost standardization, as a basis for formulating performance-based budgeting. These examples show the provincial government’s determination to reform the bureaucracy, especially those areas related to regional public fi nancial management. This report is a product of close collaboration between the World Bank, the Support Offi ce for Eastern Indonesia (SOfEI), the Research Institute of the University of Gorontalo, the Provincial Bappeda, and the Provincial BKD, as well as the district governments in the province of Gorontalo. We hope that this report can benefi t the provincial and district governments of Gorontalo, as well as other regional governments, in serving as a reference tool for reform eff orts in regional public fi nancial management and regional development planning. Ultimately, our hope is that this report can contribute towards better management of regional public fi nances and government bureaucracy, leading to new standards in eff ective entrepreneurial government. Fadel Muhammad Joachim von Amsberg Governor Country Director, Indonesia The Province of Gorontalo The World Bank Offi ce, Jakarta Service Delivery and Financial Management in a New Province v Gorontalo Public Expenditure Analysis Glossary of Terms APBD Regional Government Budget (Anggaran Pendapatan dan Belanja Daerah) APBN State Budget (Anggaran Pendapatan dan Belanja Negara) Bappeda Regional Development Planning Agency (Badan Perencanaan Pembangunan Daerah) Bapppeda Regional Accelerated Development Planning Agency (Badan Perencanaan Pembangunan Daerah) Bappenas National Development Planning Agency (Badan Perencanaan Pembangunan Nasional) Bawasda Regional Monitoring Agency (Badan Pengawasan Daerah) BKD Regional Finance Agency (Badan Keuangan Daerah) BPHTB Land and building transfer fee (Bea Perolehan Hak atas Tanah dan Bangunan) BPS Central Bureau of Statistics (Badan Pusat Statistik) Bupati District Head DAK Special Allocation Fund (Dana Alokasi Khusus) DAU General Allocation Fund (Dana Alokasi Umum) Desa Village Dinas Local Technical Agency Offi ce DPRD Provincial House of Representatives (regional parliament) (Dewan Perwakilan Rakyat Daerah) FGD Focus Group Discussions GDP Gross Domestic Product GER Gross Enrollment Rate (Angka Partisipasi Kotor) GoI Government of Indonesia GRDP Gross Regional Domestic Product HDI Human Development Index Inpres Presidential Grants (Instruksi Presiden) Kabupaten District (regency) Kecamatan Subdistrict Kelurahan Urban village Kepmen Ministerial Decree (Keputusan Menteri) Keppres Presidential Decision (Keputusan Presiden) Km Kilometer Kota City (urban district) LG Local Government MDG Millennium Development Goal MoF Ministry of Finance MoHA Ministry of Home Aff airs MoNE Ministry of National Education NER Nett Enrollment Rate (Angka Partisipasi Bersih) NGO Non-Governmental Organization O&M Operations and Maintenance PAD Own-Source Revenue (Pendapatan Asli Daerah) PBB Land and Building Tax (Pajak Bumi dan Bangunan) PDAM Local Water Supply Utility (Perusahaan Daerah Air Minum) Perpu Regulation in Lieu of Law (Peraturan Pemerintah Penggati Undang-Undang) Perda Regional Regulation (Peraturan Daerah) PFM Public Financial Management PLN National Electricity Company (Perusahaan Listrik Negara) Podes BPS Village Potential Survey (Potensi Desa) Polindes Village Maternity Center (Pos Persalinan Desa) Puskesmas Community Health Center at Subdistrict Level (Pusat Kesehatan Masyarakat) Posyandu Integrated Health Service Unit (Pusat Pelayanan Terpadu) Pustu Subcommunity Health Center (Puskesmas Pembantu) vi Service Delivery and Financial Management in a New Province Gorontalo Public Expenditure Analysis Regional Budget Consolidated
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