President Jokowi Signs Presidential Regulation on Technical Guidelines on Utilization of Physical Special Allocation Fund

In order to implement the provisions in Article 15 paragraph (2) of Law Number 18 of 2016 on the State Budget (APBN) for Fiscal Year 2017, President Joko “Jokowi” Widodo on 30 December 2016 signed a Presidential Regulation Number 123 of 2016 on Technical Guidelines on the Utilization of Physical Special Allocation Fund.

Physical Special Allocation Fund hereinafter abbreviated as DAK Fisik means funds allocated in the APBN to certain regions aimed at supporting special physical activities that are considered as regional matters and in line with national priority.

According to the Presidential Regulation, in allocating DAK Fisik, Heads of Regions  allocate it in the Regional Budget (APBD) or in Revised APBD, while the section/subsection, and upper limit mentioned in the APBD or Revised APBD as intended will be implemented according to the details in the DAK Fisik’s budget allocation in each areas defined in the Presidential  Regulation on details of the APBN.

“If Presidential Regulation on the details of the APBN is received after Budget Priorities General Provisions on Provisional Budget Ceiling is stipulated, then allocation of DAK Fisik will directly be put under APBD mechanism, and will be implemented in accordance with the provisions of the law,” Article 4 paragraph (3, 4) of the Presidential Regulation says.

In the technical preparation of this DAK Fisik as intended, Local Administration’s Working Unit for Technical Matter (SKPD Teknis) in coordination with Provincial Development Planning Agency (Bappeda) formulates proposals of each DAK Fisik areas.

The proposals should at least contain: a. Detail and location of activities; b. output target of each activities; c. Priority location; d. Detail funds; e. Implementing methods; and f. supporting activities.

Proposals as intended will be discussed by the SKPD and Ministries/Institutions, then it will be stipulated by the SKPD into a proposal which is approved by the Ministries/Institutions no later than December before the current fiscal year apply,” Article 5 paragraph (3,4) of the Presidential Regulation says.

Following the process, SKPD Teknis compiles Budget Implementation Document of SKPD (DPA-SKPD) or such other documents as accordance to the provisions of the law.

According to the Presidential Regulation, SKPD Teknis implement activities of each DAK Fisik areas after the proposals meet these following requirements: a. proposals of DAK Fisik is mentioned in the Regional Regulation on APBD/ Revised APBD and/or Heads of Regions’ Regulation on the Detail Explanation of APBD/ Revised APBD; b. proposals of DAK Fisik is stipulated in DPA-SKPD or other budget implementing documents; and c. If the implementation of DAK Fisik requires availability of land, the validity of the land ownership, and the readiness of land, it should be proved with statement from heads of regions or certificate/evidence that states that the land to be used for the implementation of the DAK Fisik has been provided.

“The Regional Government can use allocation of DAK Fisik, but not exceeding 5 percent, to fund supporting activities directly connected with DAK Fisik’s activities,” Article 7 paragraph (3) of the Presidential Regulation says.

Supporting activities as intended include: a. planning design; b. tender fee; c. facilitator honorarium for DAK Fisik’s activities which was conducted self-management manner; d. appointment of supervisory consultant contractual activities; e. organizing of coordination meeting; f. business trip from/to the implementing location for planning, controlling, and supervising.

If there are remaining funds of DAK Fisik in Regional Treasury Account that relates to remaining funds of previous DAK which has not yet be fully implemented until the end of fiscal year so that the output’s target is not accomplished, the remaining fund will be used to accomplish the output of the same area.

On the other hand, if there are remaining funds of DAK Fisik in Regional Treasury Account that caused by the transfer of authority of government affairs from regency / city to province as regulated in the Laws on Regional Government, the remaining fund will be given priority to use it on the same area or in accordance with the Regional’s needs.

The Presidential Regulation emphasizes that Heads of Regions shall compile report of the implementation of DAK Fisik every three months that will be consisted of: a. implementation report; and b. report on budget absorption, and accomplishments of outputs.

“Heads of Regions will submit report of activities implementation to the Minister of Finance, ministers/heads of institutions, Minister of National Development Planning (PPN)/ Head of National Development Planning Agency, and Minister of Home Affairs,” Article 9 paragraph (3) of the Presidential Regulation says.

According to the Regulation, supervising and evaluation of the management of DAK Fisik in regions will be conducted separately or jointly by the Minister of Finance, ministers/heads of institutions, Minister of National Development Planning (PPN)/ Head of National Development Planning Agency, and Minister of Home Affairs.

Supervising and evaluation of the implementation of each DAK Fisik areas as intended will be conducted by considering: a. accomplishments of outputs towards target that was planned; b. realization of budget absorption; punctuality in completing project; conformity between the location of the implementation and proposed documents; and implementing method of the DAK Fisik.

“This Presidential Regulation shall apply as of the date of its enactment” Article 16 of the Presidential Regulation Number 123 of 2016 which was promulgated by the Ministry of Law and Human Rights Yasonna H. Laoly on 30 December 2016 says. (Pusdatin/ES) (RAS/EP/YM/Naster)