2007年-世界发展银行全球_Indonesia_-_Public_Expenditure_and_Financial_Accountability___Public_Financial_Management_Performance_Report_and_Performance_Indicators_89页_704kb

Public Expenditure and Financial Accountability (PEFA) Assessment Summary for Indonesia

Core Content

The World Bank conducted a Public Financial Management (PFM) Performance Report and PEFA assessment for Indonesia, utilizing the PEFA measurement framework to evaluate the country's PFM performance. The assessment highlights both strengths and weaknesses in Indonesia's PFM system, emphasizing the need for continued reforms and improvements.

Main Points

1. PFM Measurement Framework

• The PEFA framework was developed with input from donors, client countries, and international organizations.
• It provides a standardized, integrated, and indicator-based methodology to assess PFM performance over time.
• The framework includes 31 high-level indicators, with scores ranging from A to D.
• The report does not aim to rank countries but to support PFM reforms through stakeholder dialogue.

2. PFM Performance Overview

• Indicators Scored: 4 A, 4 B, 12 C, and 10 D.

• Unscored Indicator: The extent of unreported government operations due to data unavailability.

• Key Strengths:

  • Transparency and comprehensive budget documentation.
  • A well-defined budget process with both executive and legislative adherence to schedules.
  • Compliance with international classification standards.
  • Strengthened external audit function (BPK).

• Key Weaknesses:

  • Weaknesses in financial reporting and internal controls.
  • Delays in budget implementation due to procedural bottlenecks.
  • Limited progress in performance-based budgeting and MTEF.

3. Budget Preparation and Transparency

• The State Budget combines previous recurrent and development budgets, significantly improving transparency.
• Budget documentation, including the annual budget law, the President’s budget speech, and detailed budget documents, is publicly available.
• The 2008 budget documents included a statement of fiscal risk for the first time.
• There is a need for full integration of the two budget types (recurrent and investment) in the budget process.

4. Policy-Based Budgeting

• Indonesia has a national planning system (Bappenas) and tentative moves towards performance-based budgeting and MTEF.
• Budget dialogue remains focused on inputs rather than outcomes.
• The 2008 budget reflected greater political involvement and reallocation of resources based on government priorities.
• The link between the national plan (RKP) and the budget is weak.
• Reforms are ongoing, with Bappenas establishing a new evaluation directorate.

5. Budget Execution and Control

• Budget authority is granted to line ministries through the DIPA at the beginning of the fiscal year.
• Delays in parliamentary review and staff re-appointment can cause DIPAs to be withheld.
• Budget execution is largely under the control of line ministries.
• Payments are made by the Treasury based on payment orders (SPM) submitted by ministries.
• Expenditure patterns are skewed towards the end of the fiscal year due to procedural delays.
• Internal audit systems exist but are often inefficient and lack capacity.
• The BPK has increased its funding and independence, but there are still challenges in audit effectiveness.

6. Accounting, Recording, and Reporting

• There is no government-wide GFMIS, and financial reports are prepared at different levels.
• Financial reports are timely but lack reliability, leading to a disclaimer audit opinion.
• The transition from cash to accrual accounting is planned for 2008 but faces capacity constraints.
• Consistent application of accounting standards and procedures is needed to improve the reliability of financial statements.

7. External Scrutiny and Audit

• The Parliament has significant oversight powers and can modify the draft budget.
• The review process is lengthy and detailed, involving over 20,000 spending units.
• The ex-post review of public finances is limited, with no systematic reporting by Parliament.
• The BPK has gained independence and increased capacity, but audit access to government revenues is still restricted.

8. Donor Practices

• Donor funds account for about 8% of primary government expenditure in 2006.
• Budget support is predictable, but actual disbursements depend on government performance.
• Over 60% of aid disbursements rely on country fiduciary systems.
• Compliance with Government Regulation 2/2006 on donor reporting is inconsistent.

Key Information

• Currency Unit: Rupiah (IDR), with US$1 = IDR 9100.
• Fiscal Year: January 1 to December 31.
• Legal and Institutional Framework: Governed by Law 17/2003 on State Finances, which delegates responsibilities to the Ministry of Finance and outlines the budget process.
• PFM Reforms: Ongoing reforms include the establishment of a Treasury Single Account (TSA), improvements in tax administration, and the strengthening of the BPK.
• PFM Challenges: Weak internal controls, delayed budget execution, lack of performance-based budgeting, and data reliability issues.
• Recommendations: Strengthen internal audit capacity, improve the implementation of MTEF and performance-based budgeting, and ensure timely and reliable financial reporting.

Conclusion

The PEFA assessment provides a baseline for Indonesia's PFM performance, highlighting the need for continued reforms in budget execution, internal controls, and the integration of performance-based budgeting. While the country has made progress in transparency and audit, further work is required to ensure reliable and comprehensive financial management across all levels of government.