project managers (PjOK), district consultants and kecamatan facilitators. A. BUY
IN TO KDP. The study provides strong evidence of buy in to KDP aims, ...
KDP2 MATCHING GRANT STUDY EXECUTIVE SUMMARY During the first phase of KDP, which ran from 1998 to 2002, the program was kept largely independent of local governments. Although officials played a role in coordination and oversight, fears of capture and corruption meant that their involvement in day-to-day operations and fund transfers was circumscribed, and planning, decision-making and implementation were devolved to communities, aided by independent consultants. As well as offering a viable and cost-effective means of service delivery, this approach was also intended to support and strengthen community capacity, which previous government-run projects had tended to neglect and undermine. In the longer term, however, this relative independence of government was neither sustainable nor desirable, particularly in light of Indonesia’s rapid democratisation and decentralization following the demise of President Suharto and the ‘Big Bang’ decentralization of 2001. To some extent, KDP anticipated this issue, by attempting to showcase the benefits of participatory approaches to local officials. This strategy met with some success. As noted in the final report for this phase, many officials displayed signs of ‘buy-in’ to KDP principles, as evidenced by “the perspective of local officials to view KDP as a model for other development programs.” Yet, such ‘scaling up’ of KDP principles was still hampered by limitations on the role of officials and the lack of a direct financial stake on the part of local governments. The second phase of KDP, which began in 2003, took the first steps to address these issues. Prior to the start of the program, local governments were invited to participate in a ‘matching grant’ scheme, which enabled them to fund sub-districts that would not otherwise receive KDP. All other aspects of the program remained the same: facilitation was still centrally funded and normal KDP rules and procedures still applied. Nearly half of all districts that would receive the first year of KDP2 opted to participate, providing contributions worth on average just over Rp. 1 billion per district. This paper seeks to understand what prompted local governments to contribute to KDP and the process by which they did so. It also attempts to document the impact that this had on oversight and involvement, as well as some of the administrative issues faced by the program as it works to integrate with local government procedures. Much of the study focuses on the executive branch of district governments. Much more than legislators, officials played a key role in deciding whether to contribute to KDP, and, necessarily, a much larger part in the operational details. The study is based on a survey of KDP consultants and local planning and empowerment agency heads in 73 districts, as well as in-depth interviews in 17 districts with over 150 officials, legislators and consultants. Informants included chairmen and members of local legislatures, district heads, their deputies and assistants, heads and members of district agencies, sub-district project managers (PjOK), district consultants and kecamatan facilitators. A. BUY IN TO KDP The study provides strong evidence of buy in to KDP aims, principles and procedures among local government officials, from agency staff involved in the minutiae of the program to more senior planners and district heads. In general, officials strongly identified with the poverty alleviation aim of KDP. Many also endorsed its bottom-up ‘empowerment’ approach as a way to inculcate skills and reduce dependency. This was often seen as a paradigm for development that stood in contrast to previous ‘top down’ programs, which were said to have created dependency and were not sustainable.
KDP performance was also generally seen in a very positive light. In particular, planning, competition and management were valued as a way to bring out aspirations, create ownership, cut costs and increase contributions and sustainability. However, there were some concerns. Officials worried that competition would lead to tension. KDP processes were also said to take too long. Indeed, almost one-third of officials surveyed rated this aspect of the program as poor or very poor. Finally, although most valued transparency and community management of projects in KDP, many noted that contractors and corrupt officials or legislators would oppose it. Buy-in to the program was also evident in the desire of many officials to use it as ‘a model’. This went beyond aspiration. Over four-fifths of officials surveyed for the study reported that their district had taken up aspects of KDP in other district-funded programs. The specific procedures that they were likely to use display a tendency to focus on practical participation, and included allowing community members to make and prioritise proposals, and play a role in implementation. There was less emphasis on community decision-making and control, and districts were unlikely to adopt facilitation, sub-district competition, open-menu proposals or exclude contractors by adopting full-fledged community management of projects. While this reflects some of the concerns outlined above, failure to take up some of these aspects of the program is also likely to be related to desire for more input and control than KDP currently offers. B. RATIONALE FOR FUNDING Buy-in to the KDP concept and performance played a key role in officials’ readiness to provide funds. Some also said funding would facilitate transfer of KDP principles and procedures to other programs. However, evidence did not support this. District funding rarely boosted monitoring or stimulated greater interest from members of district administrations. Officials were also swayed by financial incentives. However, they did not tend to cite the obvious benefit of free technical assistance. Facilitators were not a cost that they would normally have borne and technical assistance was likely not often weighed as a financial benefit. Rather, they hoped that they would be rewarded with more project funding from the central government if they obeyed its request to contribute. To a degree, participation therefore represented a ‘token effort’ to show willing. Research also looked at why other districts did not provide funding, and variations in the size of contributions among those that did. This was puzzling. Failure to contribute was neither systematically related to limited fiscal capacity nor to the ‘buy-in’ of key officials. The latter might be explained by the fact that the scheme did not present decision-makers with a ‘significant’ choice about whether they wanted to participate in KDP or not, since failure to contribute was costless. The former indicates that most districts were not funding the program ‘to capacity’, providing support for the view that participation was to some extent tokenism. But failure to provide funds was also sometimes influenced by ‘positive’ factors, including availability of alternative ‘empowerment’ programs, veto of proposals by other members of the executive or legislature, and problems with communication within and between district governments and the centre. C. BUDGET ALLOCATION PROCESS During the first two years of the matching grant program, there were numerous problems and deviations from initial funding commitments in participating districts, including cuts and reductions in funding. These occurred for two reasons: issues internal to the local budgeting process, and those at the interface of KDP and district procedures. Budgeting was characterised by interagency and legislative competition for funds and can be coloured by corruption at every stage. Although the latter was not a major disincentive to fund KDP, it is likely to become a bigger issue as the amount of district funding for the program increases in future. 2
Despite being a multi-sectoral program, local government allocations to KDP are coordinated through one agency, usually the district empowerment agency (PMD), which is often small and lacks clout. They were subject to contest by other agencies, though members Bappeda did often lend their support to allocations. Competition from other agencies for KDP funds might indicate the limited stake and involvement of other agencies in the program, a phenomenon that was also noted in monitoring and coordination of the program. There was very limited scrutiny of allocations to KDP by legislators, partly a result of problems with the lack of interest or ability of DPRD members in discharging their oversight role, and the fact that their main personal or political interests in budgeting lay elsewhere. However, although DPRD were often uninterested in allocations, as the value of the fund allocation increased, so did their attention. This usually resulted in reductions. However, limited attention was sometimes related to lack of knowledge about KDP, and there is evidence that some legislators are keen to learn more and get more involved in the program. Some of the major problems during budgeting were linked to poor coordination within districts, and between districts and the centre. First, loss of operational knowledge related to staff turnover in the coordination team at district level sometimes had a damaging effect on the ability of officials to negotiate allocations. Second, the provision of clear, timely and reliable information from the centre was a problem in many districts and led to frustration and missed opportunities. Third, the lack of clear rules and sanctions also contributed to problems. Shortfalls in local government funding were not countered by sanctions, such as threats to withdraw technical assistance. D. DISBURSALS AND TAXATION There were many violations of KDP rules and procedures during the first year of the matching grant program. These were mainly caused by conflicts between the program and district rules and procedures, which forced officials to choose between the two. There were also more minor problems with occasionally lengthy (three month or longer) delays due to poor local government administration, and also with taxation, which tax officials in a few districts insisted on applying in the face of central government requests not to. The most pressing problem was a conflict between the district fiscal year and the multi-year, or ‘off-calendar’, implementation of KDP. This led to the majority of breaches of KDP and district procedures, including the use of informal practices, such as disbursals to non-governmental accounts or falsification of financial reports. This conflict also caused a great deal of inconvenience to officials and consultants and may have created a disincentive to fund the program. Strong efforts should be made to align KDP disbursals with the district budget year. Further mismatches with district processes were evident in relation to KDP fund request and disbursal procedures. KDP fund request and authorization procedures were not entirely relevant to district procedures for authorization of disbursals. As a result, KDP safeguards on disbursals could be easily ignored. Disbursal of funds direct to kecamatan accounts was also not in line with district financial procedures, which call for disbursal through agency accounts. There is little reason to insist that officials deviate from well-established and sound practice. These problems were exacerbated by a lack of guidance as to how conflicts could be overcome, for example, by helping consultants and officials to understand which procedures it was essential to follow, and which not. As one consultant complained, “the centre didn’t provide any clear
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direction on this issue.” The lack of guidance meant that there was little forewarning of problems and increased uncertainties and headaches caused by procedural conflicts. E. MONITORING & REPORTING Although use of local government funds might be expected to stimulate increased interest, local government monitoring of funds and implementation was not normally more intensive in matching grant locations. Research identified a number of problems that affected monitoring and reporting of KDP. The accountability system in local government hardly stimulates good monitoring and reporting. Researchers never found evidence of significant debate about KDP during the annual accountability process. Legislators are unlikely to raise significant questions about performance, and district heads are therefore unlikely to see evidence of success or failure unless they take a strong personal interest. Despite introduction of ‘performance-based’ budgeting, there is little stimulus for officials to formulate meaningful performance indicators and monitor systematically. In only one or two cases, in Sumenep and Sijunjung, did the personal interest of senior members of the executive, particularly the district head, appear to prompt efforts by Tim Koordinasi members to develop more systematic monitoring of KDP in general. As also seen in budgeting, involvement in monitoring was largely limited to members of local empowerment agencies, who currently ‘own’ local government budget allocations to KDP, and members of local planning agency, Bappeda, which used to be the ‘leading sector’. Agencies other than PMD and Bappeda are not often very involved in coordination and monitoring of KDP. Lack of a clear role and financial stake are likely to be the main reasons. Control and distribution of operational funding is also a significant issue, though it is unlikely to be easy to resolve. Problems of understanding are likely to have hampered the effectiveness of monitoring by members of Tim Koordinasi in some districts. At least in some cases, this was related to staff turnover, which resulted in limited understanding of KDP processes and procedures among local coordination team members. It might be worth considering targeted socialization activities for those that are interested and would benefit. Similar problems likely proved a barrier to effective monitoring by local legislators. Although lack of will might have been a factor, in three or four districts visited, there was pent up demand for greater involvement and more information about the program, and complaints of exclusion by consultants and officials.
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TABLE OF CONTENTS
INTRODUCTION BACKGROUND…………………………………………………………………………... p.6 AIMS………………………………………………………………………………………. p.7 METHODOLOGY………………………………………………………………………… p.8
SECTION 1: REASONS FOR FUNDING PART I: ATTITUDES TO AND PERCEPTIONS OF KDP……………………………… p.11 PART II: SELECTION OF KECAMATAN………………………………………………. p.21 PART III: REASONS FOR FUNDING………..………………………………………….. p.23
SECTION 2: BUDGET ALLOCATIONS, DISBURSALS AND MONITORING PART I: BUDGET ALLOCATIONS TO KDP…………………………………………… p.31 PART II: DISBURSALS AND TAXATION……………………………………………... p.41 PART III: MONITORING AND REPORTING……………………………………...…… p.49
ANNEXES ANNEX I: RESEARCH SITES AND SURVEY RETURNS……………………………... p.54 ANNEX II: BACKGROUND INFORMATION ON KDP2 DISTRICTS………………… p.56 ANNEX III: SURVEY RESULTS………………………………………………………… p.58
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INTRODUCTION From modest beginnings in 1997, when it ran in only 25 villages in three of Indonesia’s 32 provinces, the Kecamatan Development Program (KDP) has undergone a massive physical scaling up to become one of the largest community driven development programs in the world. By 2002, the program was running in more than 20,000 villages, and at the end of 2003, when the second phase of the program began, it covered 28,000 villages in 29 of Indonesia’s 32 provinces. During this time, Indonesia’s political and administrative structures underwent swift and radical reform. Following the downfall of President Suharto during the economic crisis, the country saw its first free elections in 44 years. Meanwhile, sweeping new local autonomy laws, drafted under Suharto’s successor, Habibie, were implemented in the ‘Big Bang’ decentralization of 2001. This saw a massive shift of authority, resources and personnel from the centre to district governments, which had previously only served a de-concentrated function.1 Despite recent revisions to the laws, political decentralization continues, with direct election of district heads to be implemented following the country’s first direct presidential election in September 2004.2 Despite these transformations, during the first phase of KDP, decision-making and fund transfers were relatively independent of local governments. The Local Level Institutions studies that fed into its design showed that previous government-led initiatives tended to neglect and undermine local capacity. There were also concerns about the risk of local government takeover of the program. So, although district and sub-district officials played a part in oversight and sign-off of funding, the role of local government in day-to-day operations was circumscribed. Technical, social, and managerial functions were outsourced to firms rather than entrusted to civil servants. Disbursals were also made direct to sub-district accounts from regional branches of the central treasury, bypassing provincial and district government coffers.3 These measures enabled KDP to be set up quickly, with less leakage, and to harness and support local capacity. However, they were also problematic for sustainability. First, they hampered what has been described as the ‘conceptual scaling up’ of the program, or the promotion of, “an understanding of and long-term commitment to CDD,” among local governments.4 The limited role for officials reduced opportunities for the transfer of knowledge of KDP principles and practices into the government system, a problem that was exacerbated by local governments’ lack of financial involvement.5 Second, the parallel system of fund transfers would also stand in the way of integration into routine government budgetary and expenditure systems.6
1
‘The Making of the Big Bang and its Aftermath: A Political Economy Perspective’, Hofman and Kaiser, 2002; ‘Decentralizing Indonesia: A Regional Public Expenditure Review’, World Bank East Asia Poverty Reduction and Management Unit, 2003; 2 See ‘Lessons Learned on Donor Support for Decentralization and Local Governance’, OECD, 2004 for a useful typology of different forms of decentralization. 3 This discussion is based heavily on a number of papers, including: ‘Crises and Contradictions: Understanding the Origins of a Community Development Project in Indonesia’; ‘Indonesia’s Kecamatan Development Program: A LargeScale Use of Community Development to Reduce Poverty’; ‘Learning from the Kecamatan Development Program (KDP): The first Shanghai Field Visit’ 4 The notion of ‘conceptual scaling up’ is borrowed from ‘Scaling Up Community Driven Development: Theoretical Underpinnings and Program Design Implications’, World Bank Policy Research Working Paper, Hans P. Binswanger and Swaminathan S.Aiyar, 2003 5 See also draft, ‘Scaling Up Action Research Project: Phase One Lessons from Six Case Studies’, World Bank, Deborah Davis 6 See KDP-2 PAD p.40; MG study TOR; Also draft, ‘Scaling Up Action Research Project: Phase One Lessons from Six Case Studies’, World Bank, Deborah Davis
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In spite of these obstacles, during the first phase of KDP many local officials reportedly showed signs of ‘ownership’ or ‘buy-in’. These included “the perspective of [some] government officials to view KDP as a model for other development programs,”7 based on, among other things, their perception that it offered a more efficient and sustainable delivery mechanism for rural development.8 They also gained skills and played an increasing role in project monitoring, supervision, management and handling complaints. Indeed, the KDP1 Final Report noted a ‘virtuous circle’ between involvement in and attitudes to the program, concluding that, “getting government officials from all levels into the field is the key to changing hearts and minds.”9 Nevertheless, the role of local governments was not optimal. As the Implementation Completion Report noted, “KDP still depends heavily on its consultants. This is a serious issue in view of the sustainability of the project as a model for participatory and transparent poverty alleviation. Therefore steps to improve KDP design … are needed to increase the role of local governments in concrete ways.”10 Yet there were still concerns about managing this shift, in particular that rapid transition to on-budget sustainability would provide too much leeway for the exercise of line agency interests over areas such as procurement and financial management. As a result, the strategy for generating fiscal sustainability and reinforcing ‘conceptual scaling up’ remained a gradualist one, in which responsibility for grant contributions would be shifted to local government, while technical assistance would still be financed from the centre.11 This approach was embodied in a voluntary ‘matching grant’ program, which 79 of the 190 districts participating in the first year of KDP2 opted to join.12 The program formed part of the strategy to reinforce ownership by increasing encounters between district organizations and communities, reinforcing the ‘virtuous circle’ noted during the first phase.13 It also served as a pilot for integration of KDP into local government budgeting and expenditure systems, prior to the introduction of a mandatory counterpart funding mechanism under the third phase of the program. AIMS OF THE STUDY Based on the experience of the first year of the KDP2 matching grant program, this study aims to document some of the key issues related to fiscal sustainability and the ‘conceptual scaling up’ of KDP to district governments. It addresses a cluster of research questions relating to how and why local governments made contributions to KDP, and the impact that this had on the involvement in and attitudes of officials and legislators to the program. These questions include: Why did districts use their limited internal budget resources to join the program? • What do officials know about KDP and what is their level of understanding? • How do Dinas specifically feel about KDP and the matching grant program? • How were the participating kecamatan chosen? • What expectations do the Bupati and local parliament have of the program? • Why did they choose this program, and not another? • What do they anticipate will be the impact or ‘multiplier effect’ of the program?
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KDP1 Final Report See KDP2 PAD, p. 104 9 KDP1 Final Report 10 KDP1 Implementation Completion Report 11 KDP1 Implementation Completion Report 12 See KDP-2 PAD p.40; MG study TOR; The announcement of this program was also timely. It was followed by the issue of Ministry of Finance decree KMK-35/2002, which requires districts to provide counterpart funding to government subsidiary offshore loans – a requirement reflected in the mandatory cost sharing component in KDP3. 13 See KDP-2 PAD pp.13, 15 and 18 8
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What is the process for budget allocation, disbursals and monitoring of the program? • When and by whom are budget allocations approved? • When did disbursals take place? How were they processed? • Was the contribution taxed? If so, why? • How did district governments monitor the use of the funds? • Did officials report on the use of the funds? Who scrutinized reports? METHODOLOGY Research for this study was carried out between January and May 2004. It used both qualitative and quantitative approaches. In-depth interviews were carried out with officials, legislators and consultants in 17 districts in six provinces, selected on the basis of variation in the amount of allocations and previous participation in KDP. These were augmented by a survey of consultants and selected officials. The survey, which was conducted in April and May 2004, was sent to all matching grant districts and to a small, random, selection of non-matching grant locations.14 Key informants During interviews, research focused on a number of key players in the district executive, line agencies, and legislature, as well as KDP consultants. These included: •
Consultants and facilitators. District consultants were invariably the first port of call, and played a key role in arranging access to officials and legislators. Sub-district facilitators were also a key source of information in every district, particularly in relation to operational issues relating to the matching grant program, including disbursals and monitoring of funds.
•
Tim Koordinasi. In all locations, researchers interviewed officials from the cross-sectoral team responsible for district coordination with KDP. These included the head and secretary of the team, the majority of which were from the local empowerment agency, an agency that goes under a variety of aliases, but which for the sake of simplicity is referred to here by its most common, PMD. In most districts, researchers also met members of the team from local planning agency, Bappeda. Only in a handful did they meet with members of other agencies, such as Health, Education, or Public Works.
•
Senior officials. Researchers sought interviews with more senior officials, in particular with District Heads (Bupatis). Only in two cases was this possible. More commonly, interviews were carried out with members of his office, including the Deputy Bupati, District Secretary (Sekda) and Bupati’s Assistants (typically Assistan II, for development). In just under one third of sites, interviews were also carried out with the head of the planning agency, Bappeda.
•
Legislators. In almost every district, interviews were carried out with members of the district legislature. While in three districts, efforts were made to meet with the DPRD Chairman or his Deputies, in many more, researchers met instead with members of relevant commissions, or with other members of the institution identified by consultants or officials.
•
Sub-district officials. Interviews were also carried out with sub-district officials, almost invariably with project managers (PjOK), the officials directly responsible for coordination with KDP at sub-district level. These were the primary official informants at this level, although it was also not uncommon for researchers to meet with sub-district heads (Camats).
14
See Annex 1 for a breakdown of research locations and survey returns
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Survey respondents The survey had three main aims. First, to gather information about implementation of the matching grant program, including the amount of allocations, reductions, disbursals, taxation and monitoring. Second, to measure officials’ involvement in and attitudes to KDP. And third, to measure take-up of KDP principles and procedures. Surveys were tailored for three respondent types: KDP district consultants, local government coordination team (Tim Koordinasi) heads and local planning agency (Bappeda) heads. Final versions of the survey were mailed to consultants in 77 matching grant and 16 non-matching grant districts.15 Consultants were requested to fill in one survey, and to arrange for the others to be delivered to the relevant local officials. They were pre-briefed on how to handle surveys during routine regional coordination meetings. Responses were received from consultants in 63 matching grant districts, or 80 percent of all districts participating in the matching grant program. 56 of these mailed-in responses included surveys from Tim Koordinasi heads and 48 from Bappeda Heads. Ten full sets of surveys were also returned from consultants and officials in KDP2 districts that did not participate in the matching grant program, representing nine percent of this group.
15
Two types of pre-testing were carried out in four locations. In two locations, researchers filled out the survey together with potential respondents, to test the content of the survey. In two further locations, the viability of the method of distribution was tested by asking district consultants to conduct and return the survey with no input from researchers. These latter were excluded from the final list of districts to receive the survey.
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SECTION 1 Reasons for funding
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PART I: ATTITUDES TO AND PERCEPTIONS OF KDP Key findings •
Buy-in to KDP aims. In general, officials strongly identified with the poverty alleviation aim of KDP. Many also endorsed its bottom-up ‘empowerment’ approach as a way to inculcate skills and reduce dependency. However, they did not tend to cite community empowerment as a valuable outcome.
•
Positive views of KDP performance. Almost 100 percent of officials rated all aspects of KDP as at least satisfactory apart from the time efficiency of implementation, which nearly one third rated as poor. In particular, planning, competition and management were valued as a way to bring out aspirations, create ownership, cut costs and increase contributions and sustainability. However, there were some concerns about community planning and management in KDP. Officials worried that competition would lead to tension. KDP planning processes were also said to be too long. Contractors and corrupt officials or legislators were likely to undermine commitment to community management.
•
Take-up of KDP procedures. Over four fifths of officials surveyed reported that they used aspects of KDP in other district-funded projects. The aspects of the program that they were most likely to report using displayed a tendency to focus on practical participation, and included allowing community members to make and prioritise proposals and play a role in implementation. There was less emphasis on community decision-making and facilitation. District governments were quite unlikely to adopt facilitation, sub-district competition, open-menu proposals or exclude contractors by implementing full community management of projects.
KDP has two fundamental aims: alleviating poverty and improving governance. From the beginning, these aims were interdependent. The program grew out of studies which showed that gaps between government and community organizations and the undermining of these . organizations by New Order programs had led to mismatches between investment and community priorities. Bureaucratic and elite capture drowned out the voice of communities in planning and implementation was often plagued by exclusion and corruption. With limited community say, stake or scrutiny, programs were often expensive, of poor quality and not sustainable.16 In response to concerns about capture and corruption, KDP adopted a bottom up approach to program delivery. Project planning and implementation were devolved to communities, who were aided by independent facilitators, and funds were sent direct to projects rather than through local treasuries. The program focused on building governance reforms from the demand side, by empowering villagers to participate in decision-making.17 Yet, at the same time it was intended to serve as a showcase for local governments, “creating ‘facts on the ground’ to show that properly designed community empowerment programs lead to higher returns, greater benefits for the poor, and more sustainable outcomes.”18 Research for this study attempted to determine how far KDP is achieving the latter aim by looking at the judgements of local officials about the program’s performance and the extent to which they identify with and are likely to take up its principles and procedures in district-funded programs. Although the focus was on districts that voluntarily provided funding for KDP,
16
See KDP1 Final Report; see also KDP2 PAD pp.2&3 See KDP2 PAD p.18; Training in procurement and financial management gives villagers, “the skills to become critical consumers rather than passive recipients”; “the project’s strategy for improving links to the higher levels of government again builds from the consumer side rather than by introducing new administrative mechanisms.” 18 See KDP2 Pad p. 3 17
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something that has often been cited as an indicator of ‘buy-in’ to the program,19 research for this study indicates that the picture was no different in districts that did not make contributions. Box: KDP key principles Participation and empowerment. KDP emphasizes participation, especially of marginal groups such as women and poor villagers. Communities take ownership of everything from planning to implementation. Competition for funding. Healthy and open competition is an essential part of the process. Villagers choose from an open menu and compete for funding in hamlet, village, and inter-village meetings. Transparency. KDP emphasizes transparency and information sharing throughout the project cycle. Decision-making and financial management should be open and shared with the entire community. Simplicity. KDP strives to keep the program simple. There should be no complex rules or procedures; only simple strategies should be used. This is key to implementation of all other principles. Sustainability. All program activities should be easily managed and maintained by the entire community, building on community self-reliance. Broad-based participation enhances sustainability.
1. Buy-in to KDP aims Most officials saw poverty alleviation as the single most important aspect of KDP. In the survey, over three-fifths prioritised this aim over any other aspect of the program, including transparency, community contributions and increasing civic or technical skills. The program was also thought to perform relatively well in this respect. 47 percent of respondents rated it as satisfactory and the remaining 53 percent as ‘good’ or ‘very good’. This was also evident from many comments in which officials professed that KDP was, “very beneficial for poverty alleviation,” “economic recovery,” “increasing the wealth of poor families,” “the prosperity of the community,” the “empowerment of businesses,” or, “increasing the people’s economy and their quality of life.”20 Many also expressed support for the aim of empowering villagers. This was valued as a way of reducing dependency on aid. For example, in Sumenep, the Tim Koordinasi Secretary noted, “in the past all that villagers wanted was aid. But really, they should be able to plan their own development,”21 while, in Pasaman, the Sekda noted that, “the concept of KDP is very good because it empowers the people by letting them participate from the planning process through to implementation.”22 Such thoughts were also echoed in a handful of comments returned with the survey, for example, by the Tim Koordinasi Head in Bogor, who wrote that, “KDP is very beneficial for the community, primarily for increasing its capacity and independence.”23 In particular, officials tended to identify increasing the ‘human resources’ of villagers as the key to reducing dependency and stimulating development. As one PMD member in Pesisir put it, “usually, we have very limited quality of human resources in our villages. That’s why our villages are underdeveloped.”24 Most identified the need for “human resource and capacity building,” “increasing the quality of human resources,” “educating villagers” or “having people 19
See KDP1 Final Report p.43; KDP2 PAD p.8; KPD 3 PAD p.32 See i.e. TKPPK, Yapen Waropen, Papua; TKPPK, Pacitan, East Java; TKPPK, Lumajang, East Java; Bappeda, Jember, East Java; TKPPK, Pacitan, East Java; TKPPK, Ponorogo, East Java; Bappeda, Aceh Singkil, NAD; TKPPK, Indragiri Hulu, Riau 21 Idris, Secretaris TKPPK, Sumenep 22 Sekda, Pasaman 23 TKPPK, Bogor, West Java 24 Pimpro, Pesisir 20
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not just as the object but as the subject of a program.”25 They commented that KDP could help by, “strengthening the capacity of the community,” “enabling the community to learn,” through, “activities that give knowledge that can help to develop the potential of the community.”26 Box: Top down vs bottom up KDP was often contrasted favourably with programs in the past, which were sometimes said to have been ‘top down’ and to have led to dependency. In Magelang, for example, the PMD Head contrasted KDP with old ‘top down’ programs, commenting that, “then, the problem was the mentality of the people, and of us who help them. Before, people had poor knowledge and poor mentality. If you gave them chickens, they would just kill and eat them ... There was no facilitation to show people how to make a profit.” The Bupati in this district turned to aquatic metaphor to make this point, commenting that, “it’s like a sick fish floating in a pool. Perhaps you give it an injection of vitamins … but the real problem is that the pool is dirty, and what the fish needed was oxygen. That’s maybe the problem with some of our other programs.”
Taken together, officials’ concern to improve ‘human resources’ and ‘the people’s economy’ appears to reflect a trend to view increasing the capacity of villagers to engage in productive activities as an appropriate strategy for poverty alleviation. As the Deputy Bupati in Kendari noted with approval, “if we give people fish, they’ll just ask for more fish. KDP gives them a fishing rod instead.”27 This might help to explain the priority attached to ‘increasing technical skills’, the second or third most important aspect of KDP for officials surveyed. Such attitudes cashed out in a focus on practical involvement in project implementation and sometimes led to an emphasis on microfinance or ‘economically productive’ activities. For some, civic empowerment was also a valuable outcome. This was sometimes expressed in terms of, “enhancing democracy” or “empowering civil society.”28 According to the Tim Koordinasi Head in Pamekasan, for example, “KDP facilitates the creation of a system of participative development with the involvement of the community in making decisions and utilizing local potential and resources. It institutionalizes the participative process in the local government system and enhances the role of the district to facilitate rural development.”29 Nevertheless, empowerment was not normally seen as a valuable stand-alone aim, and did not tend to rate among the three most important elements of the program for officials surveyed. 2. Buy-in to KDP principles and procedures A. Community participation and ownership Almost without exception, officials expressed support for community participation. Many linked the ‘empowerment approach’, manifested in participation in planning and implementation, to community ownership of projects and hence to contributions and maintenance. While such linkages are easily to be found in project appraisals and reports, it was striking to find them echoed almost verbatim by local government officials. The first step in this chain of reasoning was the recognition that participation in planning means that development is “more in line with the needs and desires of the community,” or that, “KDP is really based on the desires of the community, because the community participates in contributing
25
See i.e. Jaheri, Staff Bappeda, Sijunjung; Staff/ TKPPK Member, Sumenep; PMD Head Magelang; Provincial TKPPK member Sulawesi Tenggara; Wakil Bupati, Kendari 26 See TKPPK, Lebak, Banten; TKPPK, Jombang, East Java; Bappeda, Aceh Singkil, NAD 27 Wakil Bupati, Kendari 28 See TKPPK, Purworejo, Central Java; TKPPK, Sumenep, East Java; TKPPK, Ngada, NTT 29 TKPPK, Pamekasan, East Java
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ideas from the very beginning.”30 Many linked this to ownership of projects. As the Tim Koordinasi Head in Boalemo noted, for example, “KDP is a good program, because the empowerment approach, where the community is directly involved in planning and implementation and benefits from projects, leads to a sense of ownership by the community.”31 Table: Ratings of KDP performance Over nine out of ten officials surveyed rated every aspect of KDP as at least satisfactory, apart from ‘time efficiency of implementation’, which three out of ten rated as ‘poor’ or ‘very poor’. Consistently/ generally above average Aspect of program
Good/ V.Good
Consistently/ generally below average Aspect of program
Good/ V.Good
Transparency/ less corruption
86%
Time efficiency
18%
Capacity of consultants*
84%
Increasing civic skills
36%
Efficiency of project (cost)
80%
Meeting implementation targets
41%
Reports and availability of data
77%
Level of community contributions*
48%
Satisfactoriness of outputs
73%
Satisfaction of community*
65%
Increasing technical skills*
60%
Poverty alleviation*
53%
Participation and ownership were further linked to the ability of KDP to mobilize contributions. As one member of Bappeda in Boyolali commented, “you can see the success of the program in the field. It gets the most contributions from the community, the most participation, good competition, and good results.”32 Similarly, the Tim Koordinasi Head in Lumajang noted that, “the direct involvement of the community in planning, implementation and maintenance leads to an increase in the feeling of responsibility of the community for development, in the shape of contributions such as land, labour, and materials.”33 Box: The importance of contributions Community contributions (swadaya) were important for local empowerment and planning agency heads, and many were impressed with this aspect of KDP. According to the government coordination team head in Lumajang, for example, “KDP is impressive because levels of swadaya in the program are very high.” In Boyolali, one of the Bupati’s assistants agreed, noting that, “if the program provides funding for one kilometre of road, the community is able to provide two.” Others furnished specific examples. In Pasaman for example, the Tim Koordinasi Head cited contributions of Rp. 173 million to a road-building project. Yet there was sometimes a sense that the program could perform better. Although 98 percent of survey respondents felt that contributions were at least ‘satisfactory’, only 48 percent judged them to be ‘good’ or ‘very good’. Similarly, in discussion about the subject, about half of officials noted difficulties with the ability or will of communities to generate contributions. Swadaya appears to be a key area in which officials notice the benefits of KDP and improvements would not go unnoticed.
The linkage of participation and ownership also extended to maintenance and sustainability. As the Head of Bappeda from Aceh Singkil wrote, “KDP is the most effective program because it is in accordance with peoples’ desires… projects are well maintained and there is a better sense of 30
TKPPK, Lumajang, East Java; Bappeda, Brebes, Central Java; Winarno, PMD Head, Ponorogo; Pontjo, Grob_FGD_1903; TKPPK, Sumenep, East Java; Bappeda, Batang Hari, Jambi 31 TKPPK, Boalemo, Gorontalo 32 Trie Murnlise, Bappeda Staff, TKPPK Member, Boyolali 33 TKPPK, Lumajang, East Java
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ownership from the community.”34 Similarly, according to one member of Bappeda in Lumajang, “we support … community driven development, since it helps to encourage the community to maintain projects. The people feel that they truly own the program.”35 His superior gave one of the most glowing of many such reports. “In the field, I saw high community contribution and gotong royong. There was a lot of enthusiasm about KDP, and the output was very positive. I’m pretty sure every village wants to receive funding. And the main reason is because villagers put commitment into the process, which builds trust and makes development sustainable.” B. Competition Enthusiasm for empowerment and participation was sometimes accompanied by wariness of giving communities too much control. Concerns appeared to focus on the competition for resources in KDP. Some officials worried about capture by community members or lower-level bureaucrats. However, there was more concern that community members would be ‘startled by’ or were ‘not yet ready for’ competition, and that it could lead to problems such as disappointment, jealousy and conflict. Box: Ambiguous attitudes to competition Officials were ambiguous in their attitudes to competition. Although concerned about capture, jealousy and tension, some also saw it as a valuable way to discover community aspirations. The question was how to negotiate potential problems. In nearly one third of districts visited, officials advocated careful socialization, monitoring and readiness to intervene. In Sumenep, for example, officials argued that KDP could only run in ‘conducive’ locations and screened sub-districts based on their ability to monitor. Tellingly, two informants suggested that competition run only to village level. In Sumenep, the Tim Koordinasi Head wrote that, “it would be enough to have a competition at village level (if each village were allocated funds from KDP) using ideas or proposals from different hamlets.” Similarly, in Lampung Timur, officials noted that, “the competition in KDP has the potential for creating conflict, so we plan to develop a program that adopts the proposal mechanism from KDP, but which will go directly to villages.”
In just under one third of districts, officials expressed concern about elite or bureaucratic capture. Some worried that certain community members might try to dominate or abuse KDP process. In Magelang, for example, one member of the Tim Koordinasi remarked that, “the community has to be monitored carefully. … We put effort into facilitation for marginal groups. But for smarter groups we also put in extra monitoring so there will be no misuse or problems.” Concern also focused on lower level bureaucrats. In four districts, Tim Koordinasi members cited problems with interventions by village heads or Camats.36 In Boyolali, for example, an assistant to the Bupati reported that, “in the past, the village apparatus tended to dominate the process,” a phenomenon also noted by one of his colleagues from the planning agency, who felt that village heads had pushed their preference for infrastructure over microfinance projects. The potential of competition to create ‘winners and losers’, ‘disappointment,’ and ‘jealousy’ was of greater concern. As one Bappeda Head wrote, “people are not yet capable of grasping the system of competition. Communities that make efforts to contribute but lose in the competition will be disappointed and feel antipathy towards government programs.”37 Most focused on intracommunity tensions. In Magelang, a PMD official noted that, “KDP is a program with a lot of local dynamics. The government needs to be prepared to intervene to prevent fights.” This point 34
Bappeda, Aceh Singkil, NAD Paiman, Bappeda Staff, Lumajang 36 Districts included Kendari, Sumenep, Magelang and Boyolali. See for example, interviews with consultant in Magelang; Idris, PMD Staf/TKPPK member, Sumenep; Aksioma, TKPPK Propinsi Sulawesi Tenggara, Kendari. Sudaryo, Bupati Assistan II, Boyolali 37 Bappeda, Purbalingga, Central Java; see also Idris, TKPPK, Sumenep, Ridwan, Sijunjung 35
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was also raised by the Tim Koordinasi Head in Sumba Barat who wrote that, “KDP can give rise to complex community dynamics that need to be handled by the government,”38 Others were concerned about open conflict, as in Sumenep, where the Tim Koordinasi Head noted, “KDP has the potential to cause local conflict, especially among communities where the culture and abilities of the people are not ready for the language of competition.”39 Nevertheless, officials were not unambiguously against the notion of competition. In the majority of cases cited above, for example, officials noted that competition had its benefits. According to one member of the Tim Koordinasi in Sumenep, “the process of competition is certainly a good way for the community to learn democracy, and to consider the needs of others. They can also see what they really need, plan for those needs, and implement [the project] themselves.”40 Similarly, in Lumajang, the same planner who was concerned about ‘social tensions’ also voiced support for competition as a way to make people “consider their own real needs, and those of others.”41 C. Transparency and community management Transparency was one of the one of the top two or three most important aspects of KDP for Bappeda and Tim Koordinasi Heads. It was also one of the best performing; 86 percent of officials rated this aspect of KDP as either ‘good’ or ‘very good’. The premium placed on transparency was reflected in numerous comments in which officials praised the ‘system of transparency’ and commented on the importance of ‘transparency and participation’. Box: The influence of contractors and suppliers In Lampung Timur members of the Public Works agency were on record in a local newspaper saying that KDP infrastructure was substantially cheaper than that built by contractors. In interviews, they reported that this enabled them to bargain with contractors to reduce prices. However, as in one third of districts visited, the interests of contractors and suppliers apparently influenced decision-making. Here, contractors reportedly staged a protest to officials about the negative impact of KDP on their profits. As a result, officials explained that they were keen to ensure a balance between community-managed projects and those handled by contractors. “It is necessary to create a win-win situation,” as one remarked.
In the context of corruption, the KDP 2 PAD notes that, “some of KDP's strongest support has come from district and sub-district administrators who are pleasantly surprised to find out how much cheaper KDP infrastructure can cost than infrastructure provided through traditional agencies and contractors.”42 Research for this study provides strong backing for this claim. 80 percent of officials surveyed rated the cost efficiency of KDP as ‘good’ or ‘very good’. These judgements were reflected in comments from officials in over half of districts visited that projects built through KDP could cost a fraction of those built by government agencies and contractors. Although such judgements were linked to other benefits of community management such as higher levels of contributions, transparency clearly played a part. According to the District Secretary in Karawang, for example, transparency was, “very important for the maximal use of funds,” a belief that was echoed by the Tim Koordinasi Head in Cianjur who wrote that, “KDP mechanisms should be applied in other direct community aid programs in order to prevent leakage.”43
38
Bappeda, Sumba Barat, NTT; see also Paiman, Bappekab, Lumajang TKPPK, Sumenep, East Java; see also Toni, Bappeda, Lampung Timur 40 Idris, TKPPK, Sumenep 41 Source! 42 From KDP2 PAD p.104 43 TKPPK, Cianjur, West Java; see also Bappeda, Lebak, Banten 39
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Although some were keen to see more transparency in district programs, in over one third of districts enthusiasm for transparency and community management was tempered by doubts about whether it would be realistic to replicate KDP procedures in other programs. Most of these related to scepticism that it would be possible to replicate a program that threatened the profits of contractors. In Serang, for example, one member of Bappeda commented that, “KDP is good, participative, and planning comes from the aspirations of the community. But the problem is that the district doesn’t want to kill off the contractors that already exist in the area.”44 Meanwhile, in Pasaman, the Sekda noted that it was, “bad for the profits of contractors and suppliers,”45 and in nearby Rokan Hulu, the Deputy Bupati noted that, “the swakelola aspect of KDP cannot be fully implemented because contractors would not be able to eat. That’s why there’s no chance that the model of KDP can be adopted in other programs.”46 The influence of contractors on policymaking was sometimes related to corruption on the part of legislators or bureaucrats. In Sumenep, for example, officials related that attempts to replicate KDP procedures had been rejected by DPRD members, apparently because some owned contracting firms. Legislators in Ponorogo made similar accusations about the Bupati. The PMD Head in Rokan Hulu also pointed to another avenue for corruption, noting that, “there are agencies that don’t support KDP because the Dinas Head and the Sekda will not get any fee.”47 D. Simplicity: length and complexity of KDP process The most common complaints about KDP related to the length and complexity of planning and implementation. Many felt that the length of the planning process ‘bores’ community members. As one Bappeda Head put it, “KDP is very good at educating the community in planning, implementing and monitoring. It’s just that the process prior to implementation feels quite long, and this makes them bored and uncertain.”48 Four or five further complained that KDP distracted community members from their work. As the Tim Koordinasi Head in Buton put it, “implementation takes too long and gives rise to boredom. … The administrative processes are also too lengthy. They bore the community and make them neglect their work.”49 Such criticisms of the length of KDP planning processes might help to explain why officials rated time efficiency in KDP so poorly. This was by far the worst performing aspect of KDP for officials. Just under one third of survey respondents rated the performance of the program as ‘poor’ or ‘very poor’ in this respect. Criticisms extended to KDP rules and administration, which were said to be time-consuming, complicated and confusing. As one planner put it, “villagers are too often confronted with things that bore them, and which scare them away.”50 Similarly, according to a Tim Koordinasi member in Sumenep, “the program is really quite difficult, right from the start of the process up to implementation.”51 The Deputy Bupati in this district fulminated against the complexity of KDP guidelines: “it’s like the holy book. Everything is regulated. It works against empowerment.” 52 E. Sustainability Unsurprisingly, officials were often keen to stress that KDP ‘needs to be continued’ or that ‘three years is not enough’. According to one of the Bupati’s assistants in Boyolali, “it takes time to 44
Yani, Bappeda Staff/ TKPPK member, Serang Sekda, Pasaman 46 Auni, Wakil Bupati, Rokan Hulu 47 PMD Head, Rokan Hulu 48 Bappeda, Kuantan Singingi, Riau 49 TKPPK, Buton, Sulawesi Tenggara; similar comments were heard in Pesisir, Sijunjung and Lampung Timur. 50 Bappeda, Yapen Waropen, Papua 51 Rasyid, FGD, Sumenep 52 Deputy Bupati, Sumenep; see also Budi, Bappeda Staff/ TKPPK Member, Grobogan 45
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make a difference. The program needs to run for more than three years. You cannot change the mindset of the people in just three years.” The Bupati in Magelang was keen to note that the program should be continued, commenting, “please don’t think that a program will solve many problems in just one year,” while the Tim Koordinasi Secretary in Sumenep also felt that, “three years is not enough for an empowerment program.” In the shorter term, officials were generally optimistic about the maintenance and sustainability of infrastructure projects built through KDP, commonly linking this to community participation and ‘ownership’, as described above. However, in well over half of districts, officials expressed concerns about the performance of microfinance projects and the sustainability of the project in phase-out locations. A number of officials expressed desire to do something about these problems, and some expressed readiness to commit district funds to do so. Box: Interest in intervention In nearly half of locations visited, officials noted problems with repayment of loans. While some commented on the need for more intensive facilitation and effective sanctions, they tended to focus on the need to strengthen sub-district Financial Management Units (UPK). They were often keen to help. Officials in six or seven districts called for authority to safeguard procedures and institutions such as the UPK, enabling them to develop laws to protect funds or “formalise the process and mechanisms of the PTO in a district regulation.” Phase-out locations were also cause for concern. A number of respondents suggested that special measures were required to ensure sustainability, including follow-up programs and training or for facilitators to remain in situ for up to three years. Two or three proposed that they would be willing to shoulder at least some of the financial burden for such activities. According to the Head of Bappeda in Kotabaru, for example, “KDP phase out needs plans for a new program to increase the community’s ability to manage development. This would preferably be integrated with the district budget so that, over time, the district could apply the founding concepts of KDP in every aspect of village development.”
However, there was uncertainty about what one official called ‘the rules of the game’, particularly in phase-out locations. Concerns included whether or not program funds in these locations were a ‘district asset or an asset of the centre’ and whether local governments had authority over their administration. This led to calls for clarification. As the Head of Bappeda in Pamekasan put it, “after implementation there needs to be a clear decision about authority to handle the program, accompanied by a formal handover letter.”53 His counterpart in Sikka also called for guidance, commenting that, “decentralization qualifies the district to handle and develop [the program].”54 3. Take up of KDP principles and procedures Many officials suggested that KDP might be a model for other programs. According to the Bappeda Head in Blitar, for example, “the implementation of KDP is very satisfactory, because it is shaped from three aspects: poverty reduction, transparency and community contributions. It will be used as the basis for future development programs.”55 Similarly, the Tim Koordinasi Head in another location noted that, “I hope that the district will adopt the model developed in KDP. With this model, all aspects of community life can be developed, including village community institutions and human resources.”56 This phenomenon was widespread. Indeed, 83 percent of officials surveyed reported that their district had used aspects of KDP in other programs. 53
Bappeda, Pamekasan, East Java; see also Bappeda, Ponorogo, East Java Bappeda, Sikka, NTT 55 Bappeda, Blitar, East Java 56 TKPPK, Nunakan, East Kalimantan 54
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A. Participation Officials were most likely to report allowing communities to make and prioritise proposals, and play a role in managing implementation. They were also quite likely to report that efforts were made to target marginal groups in district programs, such as women and poor villagers. Over two thirds of respondents who said that their district had adopted aspects of KDP reported that they had implemented these principles. The relatively high take-up of these ‘participatory’ aspects of KDP in district programs would appear fairly simple to explain. Community involvement in making and prioritising proposals, and managing implementation, were thought to be of strategic value, increasing the skills and capacity of communities to engage in productive activities and thereby fostering independence. They were also seen as key to generating ownership, providing instrumental benefits of contributions and maintenance. Table: Likelihood of take-up of aspects of KDP in district-funded programs Likely to be taken up (over 50%) Aspect of program
Unlikely to be taken up (under 50%) % takeup
Aspect of program
% takeup
Community develop proposals themselves
88%
No limitation on activities (“open menu”)
28%
Community prioritize proposals
76%
Community members decide fund allocations
36%
Project targets marginal groups
68%
Independent facilitators (private firm/ NGO)
36%
Community manage impl. incl. funds
67%
Funds disbursed direct to community
66%
Community select impl. team (no contractor)
54%
B. Competition Districts are unlikely to adopt the system of competition as it stands in KDP, due to concerns about jealousy, disappointment, tension or conflict. Nevertheless, competition was sometimes said to be beneficial as a way to bring out community aspirations. As seen above, in two districts, officials noted the desirability of running a competition for proposals, but at village rather than sub-district level. This might well be a favoured strategy. It would likely be thought to reduce potential for jealousy by ensuring equal distributions between villages and increasing the ‘manageability’ of any problems that did arise. It would also help to cut down the length of the planning process, something about which the majority of officials complained. C. Decision-making and control Of all aspects of KDP, officials were least likely to report use of an open menu in their own programs; only 28 percent of officials who reported that their district had taken up aspects of KDP selected this option. Communities were also unlikely to be permitted to decide on fund allocations. Only 36 percent of respondents selected this option. Lack of buy-in to these aspects of KDP was reflected in calls from officials for reconsideration of open menu decision-making and more control over allocations. For example, one Tim Koordinasi Head came out in favour of “open menu proposals, but with priority for those that speed up poverty alleviation in line with conditions in each district.”57 Many proposed KDP focus more, or exclusively, on microfinance rather than infrastructure.58 57
TKPPK, Magetan, East Java Bappeda, Ponorogo, East Java; Bappeda, NTT, East Java; Bappeda, Lumajang, East Java; Bappeda, Magetan, East Java; The Head of Bappeda from Magetan provided the clearest exposition: “There should be restrictions on the open menu, since around 80% of proposals from the community are for infrastructure. This is not effective for the 58
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These calls might be understood in terms of a general desire for more ‘policy-related’ input and control, which was also seen in other contexts. For example, three officials volunteered that it would be desirable for district governments to have authority to adapt KDP, “in accordance with local conditions.” According to the Tim Koordinasi Head in Ngada, for example, “the district should be able to adapt the program in line with the conditions and characteristics of the area.” 59 Such calls were also made specifically in relation to microfinance policies and phase out locations. Four or five officials argued that factors such as the level of poverty and time taken to generate returns from loans varied from district to district. They suggested that it would be preferable for local governments to have some say over interest rates and the timeframe for repayments. A similar number of officials called for greater input and control in phase out locations, in order that government could help to ensure sustainability.60 Box: District funding and calls for control Officials in three or four districts drew a direct connection between contributions and their desire for greater say. In Pasaman, the Tim Koordinasi Head felt that “the matching grant process shouldn’t be 100 percent the same as in full grant locations. The local government should have a say over a 25 percent portion.” Meanwhile, his counterpart in Boyolali reasoned that “the matching grant comes from the APBD, so the district should be able to determine the portion of funds used for SPP, UEP and infrastructure.” Finally, according the head of Bappeda in Merauke opined that, “all rules that are applied in the matching grant program should be in accordance with the conditions in the district.”
D. Transparency and community management Although officials were relatively likely to report the existence of programs that would allow communities to manage aspects of implementation, only 54 percent of respondents reported that their district had a program that would permit community members to select implementation teams, rather than using contractors. This is likely related to two, interconnected, reasons. First, in four locations, officials expressed concern that community management of projects would ‘threaten the profits of contractors’. Second, in three districts, officials expressed doubt about whether the will existed to adopt the ‘system of transparency’ in KDP, since the program had the potential to ‘threaten the profits’ of members of the executive or legislature. In two of these cases, officials drew a direct link between official corruption and deals with contractors. E. Consultants and facilitation Consultants and facilitation were highly rated by officials; 84 percent of Tim Koordinasi and Bappeda Heads rated the capacity of consultants as ‘good’ or ‘very good’. However, they did not view this aspect of the program as one of the most important, nor, as discussed later, did they tend to see centrally-funded facilitation as a reason for contributing funds to KDP. It is therefore not surprising that only 36 percent of respondents reported that their district funded a program that used independent consultants. It is likely that most officials did not wish to pay for consultants out of district funds. This might have been linked to desire for more control or simply to belief that officials had the capacity to manage programs themselves.
empowerment of poor families. We propose the application of the open menu, but with limitations like in Gerdu Taskin [an East Java KDP spin-off] with the following division of activities: Capacity building, 10%; Business empowerment, 60%; Empowerment of the economic environment (infrastructure projects that support the economy), maximum 30%” 59 TKPPK, Ngada, NTT; also (TKPPK, Merauke, Papua 60 I.e. Bappeda, Sikka, NTT; Bappeda, Pamekasan, East Java
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PART II: SELECTION OF KECAMATAN Following sign-up to the matching grant program in late 2001, officials were required to nominate sub-districts that would receive local government funds. This task was normally delegated to members of local Tim Koordinasi, in particular those from Bappeda, then the agency responsible for leading coordination with KDP.61 Two considerations dominated the choice of locations. First, in the majority of districts, officials made genuine, albeit less than rigorous, attempts to target needy areas. Second, also in the majority of districts, officials considered it desirable to ‘equalize’ funding across sub-districts. This was prompted by concerns that subdistrict heads or local inhabitants would be jealous and protest if their area was neglected. 1. Poverty and targeting The selection of sub-districts to receive matching grants was constrained by their inclusion in a so-called ‘long list’ of sub-districts eligible to receive KDP. This list, compiled centrally using central statistics agency (BPS) data, ranked sub-districts based on poverty levels. In principle, therefore, the selection of kecamatan was necessarily related to the level of poverty in these areas. In over half of districts, officials reported that they based their choice of locations on the ‘ranking’ or ‘level’ of the sub-districts in this list. In most districts, officials offered further reasons for targeting specific areas, typically referring to factors such as inhabitants’ occupations or geographical conditions. According to some, for example, selected sub-districts were home to, “farmers who suffered from drought and flooding” or “people who live on the coast and fishermen” who needed microfinance and clean water facilities.62 Others selected areas that suffered from economic problems related to “difficult geography” or “access problems.”63 Only in Magelang did officials report that they referred to hard data. In this case, officials referred to other statistics, including from the WHO, to compile a list of sub-districts that they could cross-reference with the ‘long-list’ from the centre.64 2. Equalizing funding In about half of districts, officials also said that the decision to nominate certain kecamatan was because they had not already received KDP or did not currently receive any other poverty alleviation or empowerment program.65 This was based on a perceived need to ensure that funding for such programs should be shared out equally between different sub-districts, a need that stemmed either from a desire to placate sub-district heads or ensure that community members did not become jealous about perceived inequalities. Some officials referred to the desire of sub-district heads (Camat) to receive ‘a program’. According to the head of Bappeda in Pasaman, for example, “there was reaction from some subdistrict [officials] who questioned the process of selection,” while in Magelang, officials commented that Camats were always keen to ‘receive a program’. However, only in Gorontalo was this a decisive factor. In this case, one Camat reported that he ‘lobbied’ the Bupati to receive KDP and received word that he would receive matching grant funding shortly after.66 61
In fewer than one quarter of districts were more senior officials, legislators or consultants said to be involved. Budi, Grobogan, Sekretary TKPPK, Serang 63 Umar, Pasaman; Johansyah, Ketua Tim Koordinasi, Karawang; PMD Head, Magelang 64 In two districts (Lumajang and Magelang) officials felt that BPD data was not up to date. In two others (Biltar and Ponorogo) consultants noted the same. 65 Informants included Boyolali, Bupati Assistan II; Gultom, Lampung Timur; Bappeda, Karawang; consultant and officials, Ponorogo; consultant and officials, Pasaman 66 Camat, Limboto, Gorontalo 62
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The desire to avoid arousing jealousy from communities was a stronger motivation. It reportedly influenced the choice of locations in at least one third of districts visited. As one member of Bappeda in Karawang put it, “we needed to level the development funds that were allocated in the district, so that all of the funds did not just go to one area and make people in other areas jealous.”67 Similarly, the head of Bappeda in Alor noted that, “we really agree with the concept of the matching grant, because it can prevent jealousy among the community if one kecamatan receives KDP and another does not. This creates uniformity and harmony.”
67
Saradin Sinarbang, Bappeda staff, Karawang; see also Kepala Kantor DPM, Lumajang; A.Rasyid, Bappeda, Sumenep]
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PART III: REASONS FOR FUNDING Key findings •
Buy-in to KDP principles and performance. This played a key role in the readiness of officials to provide district funds. In particular, officials valued strategic and instrumental benefits of community participation. Some also said funding would facilitate transfer of KDP principles and procedures to other programs. However evidence does not support this. The program rarely boosted monitoring and reporting or stimulated greater interest from senior members of district administrations.
•
Financial incentives for take up. Officials did not tend to cite the obvious benefit of free technical assistance. Rather, they commonly hoped they would be rewarded with more funding for KDP or other projects, even though this was not part of the formal arrangement. To a certain degree, participation in the matching grant program represented a ‘token effort’ to show willing.
•
Failure to contribute. This was neither systematically related to limited fiscal capacity nor to the ‘buy-in’ of key officials. The latter might be explained by the fact that the matching grant program did not present decision-makers with a ‘significant’ choice about whether they wanted to participate in KDP or not, since failure to contribute was costless. The former indicates that most districts were not funding the program ‘to capacity’, providing support for the idea that participation was to some extent tokenism. However, failure to provide funds was also sometimes influenced by ‘positive’ factors, including availability of other, ‘competing’ programs, blocking of funding proposals by other members of the executive or legislature, and problems with communication within and between district governments and the centre.
Of the 190 districts participating in the first year of KDP2, 79 opted to provide funding for one or more sub-districts. Local government contributions ranged from Rp. 500 million to Rp. 4 billion, averaging between 0.6 and 4.7 percent of 2002 development spending. However, only a handful of districts made contributions at the upper end of the scale. On average, allocations to KDP amounted to just over Rp. 1 billion, or just 1.2 percent of development spending. This study attempted to determine the reasons why local decision-makers contributed funds. It focused on factors such as ‘buy in’ to the program’s principles and performance, the importance of free technical assistance and even desire to follow central government guidance. It also looked at why other districts did not contribute. This was harder to fathom. Support for KDP aims and judgements about its performance were no less positive in districts that did not provide funding than in those that did. Furthermore, while some claimed that budget limitations were decisive, fiscal capacity had little explanatory value in relation to funding decisions. A number of factors might help to explain this puzzle. First, the fact that the matching grant program was ‘costless’, since it did not have any impact on full grant funding, meant that sign-up to the program was probably not a very significant test of ‘buy-in’. Second, the fact that many officials cited desire to ‘please’ the central government as a key reason for contributing funds suggests that a certain amount of tokenism was involved. This would help to explain why most districts only put up a relatively small amount of funds, a fact that further serves to explain why fiscal capacity did not influence allocations. Investigation of the budgeting process also suggested some ‘positive’ factors that might have prevented allocations. These included the availability of alternative programs, veto of proposals by senior members of the executive or legislators and simple failures of communication within district governments, and between local governments and the centre.
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1. Rationale for contributing funds A. ‘Buy-in’ to KDP A1. Support for participation Contributions to KDP were undoubtedly linked to buy-in to its principles and procedures. In the survey, over 70 percent of officials cited support for community participation as one of the top two reasons for joining the program, far more than selected any other reason. As detailed earlier, participation was valued for two principal reasons. First, it was seen as a ‘strategic’ way to carry out development by inculcating skills, empowering villagers and thereby reducing dependency. Second, it boosted outputs, increasing contributions and sustainability. The head of Bappeda in Pasaman neatly summed up these dual reasons for favouring KDP, when he noted that “KDP is a project with a strong empowerment aspect and we need that kind of program. It also encourages community participation in planning and monitoring and this guarantees the final result.”68 Box: The need for an empowerment program During interviews, desire to support or need for ‘an empowerment program’ was almost invariably cited as a reason for funding KDP. Such programs were commonly understood in opposition to previous ‘topdown’ programs, which were said to have perpetuated dependency. In contrast to these, ‘bottom-up’ or ‘empowerment’ programs were thought to reduce dependency by inculcating skills and enabling villagers to ‘help themselves’. Such attitudes often cashed out in an emphasis on capacity building and microfinance projects. It was therefore interesting that, in at least four districts, officials said that an empowerment program such as KDP ‘fitted’ with the priorities of the district, enshrined in strategic plans (Renstra). In Kendari, for example, the Deputy Bupati noted that one of the main elements in the district’s Renstra was “the people’s economy and infrastructure. We also wanted to put more focus on empowerment programs.” The common elements in these plans were a focus on development of ‘human resources’ and the ‘people’s economy’. Support for such aims was widespread among officials interviewed for this study, and they are likely embodied in many such plans, both central and local. This rhetoric of ‘empowerment’ was also practiced and propagated in a number of government-run projects. Most strikingly these included other cost sharing programs, such as the provincially managed Gerdu Taskin or Kampung Tua programs in East Java and Lampung. They also included local projects hatched under the aegis of local cross-sectoral Poverty Alleviation Committees (KPK), which many districts have already set up under mandate from the centre government. In around one third of districts, these were already active in creating ‘stimulant’ programs.
A2. KDP as a model In nearly one third of districts, officials indicated that their decision to fund the matching grant program was related to desire to use KDP would as a ‘model’ or ‘benchmark’ for other programs. In Pasaman, for example, the Sekda noted that, “the matching grant is very important as a comparison for similar projects funded by the APBD.”69 Similarly, the Tim Koordinasi Head in Alor wrote that, “the district government is still learning the concept of KDP from the matching grant program and hopes that it will be adopted as the basis for development in the district.”70 While KDP was certainly seen as a model, there is reason to question whether the matching grant program helped. If it were really intended to act as a model one would surely expect more intensive monitoring and reporting and greater interest in the results. Yet this did not normally 68
Evi, Kepala Bappeda, Pasaman Sekda, Pasaman; see also Kepala Dinas Sosial, Karawang; Bappeda, Serang 70 TKPPK, Alor, NTT 69
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happen. In the survey, around 90 percent of Dinas and Bappeda Heads reported that there was no difference in monitoring of full and matching grant locations. Interviews also established that Tim Koordinasi did not usually institute new reporting requirements, and senior decision-makers did not usually ask to see the results. This issue is discussed further in the final section of the report. Figure: Reasons for funding KDP The survey presented Bappeda and Tim Koordinasi Heads with a selection of six reasons that might explain why their district funded the matching grant program and asked to rate these in order of priority. Reasons that were given top priority were allocated three points, those ranked second received two points, and so on. This chart illustrates the weight attached to different reasons for funding.
B. Cost sharing incentives Many officials opined that the matching grant program offered a way for districts to ‘share’ the burden of development with the central government. However, although the obvious incentive for joining the program was free technical assistance, this was not the main draw. Rather, in almost every district, officials saw contributions as a way to attract more project funding. As one member of Bappeda in Lumajang commented, “KDP doesn’t come here automatically. This is a form of participation from the district to maintain the program.”71 B1. Technical assistance/ free facilitation Officials rated the abilities of facilitators highly. 84 percent of those surveyed rated them as ‘good’ or ‘very good’. Some also cited free technical assistance for facilitators as a reason for joining the matching grant program. In Pasaman, the head of Bappeda noted that, “through the matching grant we can get technical assistance that is needed to guide us in proper management of the project.”72 Nevertheless, facilitation was neither one of the most important aspects of the program for officials, nor was it one that they were likely to take up in their own programs. It is therefore not surprising that the survey showed free technical assistance and facilitation was not a strong reason for joining the matching grant program. No respondent rated it as the primary reason for doing so. While technical assistance and operational expenses amounted to up to 20 percent of the value of grants, it is unlikely that officials normally factored this into a cost-benefit calculus, since facilitation was not a cost that they normally carried in their own programs.73
71
Paiman, Bappeda Staff, Lumajang Evi, Kepala Bappeda, Pasaman; see also Magelang, Miharsih, PMD Staff/ TKPPK Secretary 73 It is worth noting that some officials did see technical assistance as a financial benefit. According to the Sekda in Pasaman, for example, “It [the matching grant program] was a stimulant for the local government to carry out development with our limited fund resources.” Meanwhile, in Sumenep, one member of the PMD commented that, “funds in the district are limited, so we need funds from the centre,” a view that was also apparently shared by members of the local empowerment agency in Poso. Similarly, in the survey, a few officials noted the importance of ‘backup from the central government’ for consultants and DOK. As one wrote, “because of limitations on local budget and capacity, the government still needs to provide operational expenses and technical assistance.” 72
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B2. ‘Following instructions’ In most districts, officials volunteered that a request from the central government to contribute funds to KDP played a key role in their decision to do so. In Serang, for example, members of the Tim Koordinasi related that they put up funding because they had been instructed to do so, while the Deputy Bupati in Rokan Hulu saw instructions as a powerful incentive, noting that, “if the central government gives instructions, the Bupati and Dinas will obey.”74 In the survey, this was the second most important reason for funding KDP, well ahead of free technical assistance. A number of officials signalled that willingness to follow central guidance was related to limited capacity to design and run programs. As one PMD official in Kendari noted, “the district is still confused by Otonomi Daerah, since we are used to following policies developed by the centre. The district government still has trouble developing its own programs and policies, since capacity is quite low.”75 Nevertheless, as the survey showed, this was not a strong reason for funding KDP; out of all possible reasons, limited capacity was least likely to be chosen. Box: Expectations of payback In almost every district, officials indicated that the decision to fund KDP was influenced by belief that they would be more likely to receive funding for KDP or another project. The corollary to these views was a feeling that those who provided funding should benefit or that those who did not should be sanctioned. In Rokan Hulu, for example, one official commented that, “we have obeyed the instruction from the central government, so now we should get paid back.” Similarly, in Pasaman, the Sekda demanded, “if I give you matching grant, give me more full grant funds.” The Deputy Bupati in Sumenep offered a clear idea of what he expected to receive, noting that, “the appreciation that the district would like to be shown is an increase in full grant, or in our DAU [general grant transfer] allocation.” Others felt that, “districts that don’t join the program shouldn’t be given funding.” There was evidence that this had the potential to lead to problems if expectations were not fulfilled. Officials in at least four districts said that, if more funding did not materialize, they would refuse to allocate any more district funds. This was a particularly vexed issue in districts where many kecamatan were being phased out of KDP. In Sumenep, one member of the Tim Koordinasi noted that, “for 2005, the district government will agree to increase the number of matching grant locations, so long as more kecamatan are allocated full grant funding.” Here, officials commented that unless they received more funding, they might as well divert funds to a program that was designed and run by the district. Meanwhile, in Solok, members of the Tim Koordinasi related that they had raised this issue with the KDP secretariat during a trip to Jakarta, threatening that, unless the district received more full grant funding, they would not allocate any more district funds to KDP.
Rather than blind obedience or limited capacity, willingness to follow the centre was usually motivated by financial considerations. Officials often felt that contributions to KDP would help to attract more funding. Sometimes they hoped that, “if we provide funds for the matching grant, it might attract more full grant from the centre,” a sentiment expressed by the Sekda in Karawang and Pasaman and by members of PMD and Bappeda in Rokan Hulu, Grobogan and Blitar. Others thought the reward would be in the form of other projects. As one PMD member in Lampung Timur commented, “it seems there is a misperception that local governments will be awarded more projects if they are willing to provide funds for certain projects from the centre. I can understand why, because the Minister of Home Affairs once promised that he would award more projects if local governments were willing to increase allocations to projects from the centre.”76
74
Auni, Wakil Bupati, Rokan Hulu Ahmad Nazaruddin, Staff DPPMD, Kendari 76 Gultom, Lampung Timur; A few program consultants also noted this phenomenon. According to one KMKab in Kendari, “the only motivation for the district government to join the program was as a way to fish for more full grant 75
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Some pointed to their financial dependency and expressed concern that they would be penalized if they failed to provide funding. As one member of Bappeda noted, “in Otonomi Daerah, it’s impossible to develop the district because money is still in the centre. So unless we follow the centre, the district won’t get any funds.”77 Similarly, in Sumenep, the Tim Koordinasi secretary opined that, “KDP is very complicated. Actually we didn’t really want to use the program, but we chose two kecamatan because we wanted to follow the rules from the centre. The government was worried that we wouldn’t get another project from the centre if we refused.”78 2. Failure to provide funding Budget constraints were often cited as a reason for not providing matching grant funds. In the words of one PMD Head in South Sumatra, “the matching grant program is really good. It’s just that our budget is here limited so we can’t implement it yet.” Others voiced scepticism about such claims. “They’re richer than us,” said one PMD member of the next-door district, “so actually they should be able to provide funds.” Analysis suggests that such scepticism was warranted. Neither take-up of the matching grant program nor the amount contributed to it was systematically linked to local government capacity to pay. Figure: Fiscal capacity and funding decisions Some officials claimed that limited budget could be a decisive factor in whether or not a district chose to contribute funds to KDP. The following chart, based on budget data for 173 districts that participated in the first year of KDP2, shows that there was little significant trend for matching grant districts to have more resources than non-matching grant districts. Only slight differences at the lower end of the scale suggest that budget limitations may have been a more decisive issue for a handful of (relatively poor) districts.
Buy-in to the KDP concept and judgements about its performance also had little explanatory value in relation to take-up. The survey showed no significant difference between matching grant and non-matching grant districts in terms of the priorities of officials or the likelihood of take up funding.” Meanwhile, a consultant in Blitar stated bluntly that, “it would be better if the matching grant program was not just seen as a way to get more aid from the central government.” 77 Briefing with researchers in Malang; Apparently related to this was the notion, voiced in at least three districts, that funding for community development should come from district own revenues [PAD]. This was seen in Ponorogo [Sutrisno], Karawang [Johansa] and Sijunjung [Staff Bappeda, Sijunjung] 78 Idris, PMD Staff/; Sekretaris TKPPK, Sumenep;
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of KDP procedures in other programs. Officials’ judgements about KDP performance were not generally more positive in districts that decided to fund it than in those that did not. That these did not tend to determine funding decisions is confirmed by the fact that districts that had already participated in KDP1 were only marginally more likely to contribute than those that had not.79 Figure: Ratings of KDP performance Local officials generally judged KDP performance to be very positive and cited this as a reason for funding the funding it. However, judgements about KDP were no less positive in districts that did not contribute. This can be seen in the following chart, based on survey results from Tim Koordinasi and Bappeda Heads.
Investigation of the budgeting process, discussed in the second part of this paper, suggested a number of ‘positive’ factors that might help to explain why some districts failed to provide funding, even if buy-in from key officials and the amount of budget available was the same as in matching grant districts. These included the availability of alternative programs, veto of proposals by senior members of the executive or legislators and simple failures of communication within district governments, and between local governments and the centre. First, some districts might have chosen to provide funds to other ‘empowerment’ programs instead. In Pesisir, one of the three non-matching grant districts visited, officials reported that they chose to contribute to an alternative cost-sharing program.80 Districts might also have funded their own programs, some of them ‘spin-offs’ of KDP. For example, Kotabaru, a district that did not contribute to KDP, reportedly allocated just under Rp. 8 billion for its Gerakan Pembangunan Desa spin-off program in 2003.81 In some cases, officials might have preferred to throw their support behind home-grown programs that jettisoned aspects of KDP that they found problematic, such as transparency, competition, and lack of control.82
79
See Annex 2 This district reportedly provided funding to the KDP sister program, UPP, instead. 81 Another might have been Bogor, which allocated just under Rp. 17 billion for its Pembangunan Sarana Prasarana Desa melalui pola Imbal Swadaya program in the same year. 82 Indeed, in four districts, the decision to provide funding to KDP was said to have come down to a lack of choice. According to one member of the PMD in Lampung Timur, for example, the primary reason for funding the program was because it was “the only program that has a strong empowerment aspect and transparency.” Officials in Sumenep, Sijunjung, and Rokan Hulu echoed such sentiments. While lack of capacity was not a reason for choosing to contribute to KDP, decisions to provide funding were taken in the wake of a radical decentralization. Development of effective ‘empowerment’ programs might take a little more time. As most officials opined, ‘empowerment’ was a relatively new concept, and one for which many were keen to have a ‘model’ or ‘benchmark’. 80
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Second, more senior officials and legislators might sometimes have blocked allocations to KDP. In Lampung Tengah, for example, the Bupati was said to have vetoed a proposed allocation to the program, on the basis that, in the newly split district, the priority was to fund development of the district capital. Resistance might also have come from other agencies, keen to secure funding for other projects. Legislators also sometimes vetoed proposed allocations; this occurred in one out of ten non-matching grant districts surveyed. As also discussed later, their reasons might have included concern for their ‘own’ projects or the ‘lack of profitability’ of KDP. Indeed, the latter might have affected decision-making at any stage, by members of the executive or DPRD. Third, it is also possible, that some districts simply failed to allocate funding due to relatively simple problems of coordination within local executives or between local executives and the centre. Such problems, documented later, were sometimes related to staff turnover and sometimes to inadequacy of information. They were found to have led to reductions and failures to make routine allocations in a significant number of districts. It is not unlikely that they were also a reason for the failure of some districts to sign up to the program in the first instance.
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SECTION 2 Budget allocations, disbursals, and monitoring
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PART I: LOCAL GOVERNMENT BUDGET ALLOCATIONS Key findings Budget allocations for KDP encountered a number of difficulties, including contest from other local government agencies and legislators. Corruption also sometimes acted as a disincentive to put funds into the program, and is likely to become a bigger issue as the amount of funding increases in future. •
Sectoral interests. Allocations were coordinated through one agency, PMD, which often lacks clout. They were subject to contest by other agencies, though members Bappeda did provide support. Building a wider base of support, by expanding the role and stake of other agencies in KDP is likely to impact positively on funding decisions.
•
Involving legislators. Although DPRD were often uninterested in allocations, as the amount increased, so did their attention. This usually resulted in reductions. However, limited attention was sometimes due to lack of knowledge. Exploring ways to engage more with legislators is desirable.
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Information. Provision of clear, timely and reliable information is essential to avoid confusion and enable officials to arrange allocations. Failure to do so will lead to frustration and lost opportunities.
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Socialization. Loss of operational knowledge related to staff turnover can have a damaging effect on the ability of officials to negotiate allocations. It is also a more general issue for the program
•
Rules and sanctions. Shortfalls in district government funding were not countered by clear rules and sanctions, such as reduction of technical assistance. It is desirable to formulate and socialize these.
During the first two years of the matching grant program, there were numerous problems and deviations from initial funding commitments in participating districts, including cuts and reductions in funding. These occurred for two reasons: issues internal to the local budgeting process, and those at the interface of KDP and district procedures. This section explores some of the factors that shaped outcomes during budgeting; who was involved, the role they played and the major dynamics of the process. It also highlights issues with the interaction of the program with local actors, including the flow of information and understanding of the program. Box: Problems with district funding for KDP Shortfalls in funding for sub-districts. In 2003, 26 percent of matching grant districts failed to allocate sufficient funds to participating sub-districts. This affected 18 percent of sub-districts that received district grants, which suffered average shortfalls of Rp. 300 million each. Similar reductions occurred in 2004. Cuts in funding by legislatures. In 2003, only one out of ten legislatures entirely vetoed funding. But hey were more likely to reduce it. In 20 percent of matching grant districts, legislators cut the number of sub-districts by an average of two kecamatan per district. The same pattern held in 2004. Failure to propose allocations. In nine out of ten non-matching grant districts surveyed, the executive never put forward a proposal to fund the matching grant program. Although they might have decided not to do so, information from interviews suggests this might also have been due to problems of coordination and knowledge about the program. Failure to make new allocations. District executives had the opportunity to propose allocations for new kecamatan in 2004. Problems of information and coordination within districts and between district and the centre prevented more from making new allocations and led to confusion even in those that did.
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Box: District planning and budgeting Budgeting commences in the wake of the annual planning exercise, an elaborate process that is intended to reconcile bottom-up proposals from villages with district priorities. Based on the results, agencies submit spending proposals through local planning agency, Bappeda, to the budget committee (Tim Anggaran). This team, led by the District Secretary, is charged with compiling the draft budget (RAPBD). As noted in a recent World Bank study, planning is, “largely void of considerations of affordability.” The process therefore involves radical cuts, placing Bappeda and the Tim Anggaran in a powerful position. Following compilation of the draft budget, around September or October, the draft is presented to the DPRD budget committee, which conducts a weeklong review. The RAPBD is then revised and presented to the DPRD in the first of three plenary meetings, following which legislators conduct field visits to verify the need for projects. The various DPRD commissions then hold meetings with related Dinas to discuss proposals. Following further revisions, the DPRD votes on the budget during a final plenary meeting. Results of District Coordination Meeting (Rakorbang)
All Spending Units (Dinas, Badan & Kantor)
Submission of proposals, coordinated by Bappeda
Executive Budget Committee (Tim Anggaran) run by District Secretary (Sekda) Revision & compilation of draft budget (RAPBD) Bupati
Submission of draft budget (RAPBD) to DPRD
DPRD Budget Committee (Panitia Anggaran) Preliminary Review Tim Anggaran revise and resubmit RAPBD
• • •
DPRD Plenary Meetings Explanation from Bupati General review from DPRD Bupati’s reply
DPRD Commissions (Komisi) meetings (Rapat Kerja) with Dinas representatives
DPRD verification teams conduct site visits
Further revision of RAPBD by executive
DPRD Plenary Meeting DPRD approves the budget, which then becomes a district regulation (Perda)
Budgeting should finish in December, prior to the start of the fiscal year. However, this rarely happens. Out of 51 districts surveyed, only 14 percent had agreed the 2003 budget before January of the same year. In two-thirds of cases the budget was not agreed before March, and in 28 percent not until May or later. However, there does seem to be some progress in rolling back the date for agreement of the budget. In less than half of districts surveyed had the 2004 budget not been agreed before March, and only 8 percent had not approved the APBD before May.
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1. The budget allocation process A. Proposals in the executive Local empowerment agency heads were a key player in the process of budgeting contributions to KDP. After local governments signed up to the matching grant program in 2001, responsibility for coordination of KDP passed from district planning agency, Bappeda, to local empowerment agencies (PMD). Although representatives from Bappeda still formed part of district coordination teams, alongside others from Health, Education and Public Works departments, the task of managing the team and handling budget allocations to the program passed to members of PMD. The interests of members of this agency were therefore the first hurdle in the fund allocation process. In some cases, members of PMD are likely to have resisted allocations to KDP on the basis that it would crowd out other programs. According to one Dinas head, “the existence of the matching grant will reduce my Dinas budget allocation because the amount is fixed and that means I cannot allocate it for another project.”83 As discussed in previous sections, officials might have had a number of reasons for preferring other projects, including desire for more control, dislike for the length and complexity of KDP processes, and easier opportunities for corruption. Table: Summary of Expenditures Kantor Pemberdayaan Masyarakat Pasaman 2004 In the context of district expenditures, contributions to the matching grant program were not a significant item, commonly amounting to just over one percent of total development spending. For the agency proposing the allocation, however, it was quite a different matter. In Pasaman district, for example, a Rp. 1 billion allocation to the matching grant program accounted for over 38 percent of departmental budget and total spending on KDP accounted for nearly 57 percent of budgeted expenditures. This illustrates the relatively small size of the agency and shows why crowding out of budget for other programs could have been a significant issue. Departmental Expenditures
Amount (Rp)
KDP Matching Grant KDP Operational Budget (PAP) KDP Comparison Study: KDP Training and Assistance: KDP Socialization and Awareness Raising: Subtotal:
1,000,000,000 277,800,000 96,400,000 57,000,000 55,000,000 1,486.200,000
Training and Evaluation of Nagari: Poverty Alleviation Committee: Empowerment of Community Institutions: Programs for Training and Empowerment of Youth and Jobless: Programs for Nurseries, Mothers, Widows and Housewives: Subtotal:
173,000,000 30,000,000 48,000,000 240,800,000 290,470,000 782,270,000
PMD Operational Expenses: Subtotal:
344,500,000 344,500,000
Total budgeted expenditures 2004:
2,612,970,000
Fund allocations were also subject to competition from other agencies. This occurred in over one third of districts visited. In Lampung Timur, for example, one PMD member commented that, “the interests of other Dinas,” placed limitations on the amount of funds available, while in nextdoor Lampung Tengah, competition for funds was cited as a reason why this district failed to make any contribution.84 This problem was exacerbated by the limited clout of empowerment agencies, which were commonly of limited size and status, particularly compared to Bappeda, the previous ‘owner’ of allocations to KDP. As the Head of the PMD in Solok noted, “Bappeda has a 83 84
Susilo, Head of PM Rokan Hulu See Gultom, PMD Staff/ TKPPK Member, Lampung Timur; Immamudin, KMKab, Lampung Tengah
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higher rank and runs all program planning. For us, it’s hard to get a program without having this authority.”85 KDP Regional Management Unit (RMU) members in North Sulawesi and Central Java also noted this phenomenon. In the words of one, “it was much easier [to get funding] when Bappeda would both plan and implement KDP.”86 As a result of its limited power, PMD members often depended on support to ensure that proposals were kept on the table during the compilation of the budget – a process that necessarily involves swathing cuts. Although this occasionally came from the Bupati or Sekda, in well over half of districts visited, members of Bappeda played a key role in helping to ensure that proposals for the matching grant program were included in the budget. As the agency responsible for channelling proposals to the Tim Anggaran, and usually a key player on the committee, it was likely to have been effective in doing so. As the Head of the PMD in Rokan Hulu commented, “here, Bappeda has total authority to determine the amount of allocations for each Dinas.” Box: The importance of the Bupati’s committment It is hard to overstate the importance of initial commitment to funding KDP on the part of district heads. This provided PMD officials with the leverage that they needed to ensure that proposals were kept on the table even in the face of competition from larger and more powerful agencies. As one member of Bappeda in Boyolali commented, “it’s not up to us to decide the budget allocation. The Bupati already committed to funding the program in front of the President, so there is no choice but to proceed.” According to another, this helped to ensure that other officials could not “play around.” However, Bupatis were peripheral to the process of budgeting for the program. As the Deputy Bupati in Sumenep reported, “the Bupati and DPRD are only involved in the political arena. The Dinas are responsible for all operational issues.” Similarly, in Pasaman the Sekda noted that, “someone must remind the Bupati. … The commitment belongs to the government of Pasaman. But only certain people know exactly about the matching grant and most of them are in the Tim Koordinasi.” Since the Bupatis did not play a hands-on role in budgeting, formalization of their commitment in letters of understanding co-signed by DPRD Head played an important proxy role. The importance of this letter was noted by officials in more than half of districts visited, where it was typical to hear comments such as that of one official in Rokan Hulu that, “the basis for submitting the proposal … was the commitment between the Bupati and the DPRD.” Such ‘formal’ buy-in from district heads was therefore necessary, although not sufficient, to ensure that funding proposals would be successful. This really depended on the goodwill of second-line officials responsible for arranging allocations.
B. Budget allocations in local legislatures Consultants and officials commonly reported that members of the legislature had no significant comments or questions relating to district contributions to KDP. Based on their comments, as well as those of legislators themselves, it appears that this was largely due to a lack of interest, due to the ‘limited capacity’ of DPRD members, their pursuit of other interests and the relatively small size of allocations to the program. It is not uncommon to hear negative references to the ‘human resources’ (Sumber Daya Manusia) of legislators in Indonesia, and it is perhaps not surprising that a number of officials repeated this charge to explain legislators’ lack of understanding and scrutiny of proposals.87 According to the 85
Azril, Kepala Kantor KPM, Solok; Some couched this status issue in terms of the distinction between Kantor and Dinas, which held in at least 20 percent of districts surveyed. As one PMD member in Pasaman noted, “we couldn’t submit the Rp. 1.5 billion allocation, because we are just a Kantor and other Dinas would be jealous.” Chaidir, Staff KPM, Pasaman; see also Aprizal. Staff KPN, Sijunjung 86 Subagyo, RMU Training Specialist, Central Java 87 As noted, for example, in “A Preliminary Study of Local Elites in Indonesia: Sociological profiles of DPRD members”; Takashi Shiraishi
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Sekda in Pasaman, for example, “the lack of quality of the human resources of DPRD members prevents them from paying attention to the detail of proposals submitted by the executive.”88 Similarly, according to his counterpart in in Karawang, “the executive has to be tolerant of the perceptions of the DPRD about the matching grant program, because of their limited human resources.”89 Box: Management of budgeting in the legislature Many officials indicated that negotiation of budget allocations depended less on the content of proposals than on informal management of the process. According to one member of the Tim Koordinasi in Pasaman, for example, “the approval of members of the DPRD was not because they know about the program but because there were certain lobbies from Head of Dinas instead. This is a common practice for other project proposals in the district.” Such lobbies also occurred in Karawang, where the Sekda, who spoke disparagingly of the ‘human resources’ of legislators, commented that, “what is important here is how we approach the DPRD in a number of ways to get their approval for funds.” Similarly, in Serang, a consultant noted that, “here, the executive is very clever at lobbying the DPRD to submit proposals in the APBD. So there was never any trouble.” As one member of Bappeda noted, “this informal lobby is more effective than formal meetings.”
Yet, whatever the supposed mental limitations of legislators, it would be naïve to think that they do not take an interest in the apportionment of district funds. More convincingly, in most districts it seems that DPRD members were simply more concerned with other things. In Pasaman, for example, the Head of Bappeda commented that legislators were often too busy with their own business to question the actions of the executive, noting that, “within the last two years, DPRD members were too busy trying to mobilize support from the public and neglected their main function.”90 Similarly, in Rokan Hulu, the head of the community empowerment agency noted that, “members of DPRD did not really care about the detail of the matching grant. It seems that they don’t know much about the program. They are too busy with their own business.”91 Among the other business that might have occupied DPRD members was pursuit of their own interests, personal or political. As one PMD staff member in Lampung Timur put it, “as long as we do not intervene in DPRD members’ proposals, proposals from the executive will be smoothly agreed.92 This was echoed by the Sekda in Pasaman, who commented that, “members of the DPRD only care about their own proposals,”93 and perhaps also by one DPRD member in Sumenep, who noted that, “members of the DPRD never cause any problems for the matching grant proposal from the executive. For my friends in the legislature, the most important thing is that there is no cut to our payroll.”94 The relatively small size of contributions to the matching grant program was also likely to have been a major factor in their failure to attract attention. Indeed, contributions to KDP only accounted for 1.2 percent of total development expenditures, an amount that might simply have been ‘below the radar’ of legislators. Certainly, there was evidence that the more a district proposed to contribute, the more likely the allocation was to be contested and cut. In three out of 88
Syahiran, Sekda, Pasaman; see also Evi, Kepala Bappeda, Pasaman Saifudin D. Jufri, Sekda, Karawang 90 Evi, Kepala Bappeda, Pasaman 91 Susilo, Kepala Dinas SPPM, Rokan Hulu; Such comments chime with the observation in a recent Smeru report that, “some of them [DPRD members] are still not serious about performing their duties and ignore discipline, for instance, they come late to meetings or rarely attend them at all.” (see “Governance and Poverty Reduction: Evidence from a Newly Decentralized Indonesia”; Sumarto, Suryahadi & Arifianti, SMERU, 2004) 92 Gultom, Secretary of TKPPK, Lampung Timur 93 Syahiran, Sekda, Pasaman 94 Darwis, Ketua Komisi A, DPRD, Sumenep 89
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the four districts visited where allocations were cut by legislators, the executive had proposed Rp. 2.5 to 3 billion, significantly more than the average Rp.1.2 billion contribution.95 There is therefore reason to think that if district funding increases in future, it will lead to a significant increase in the attention that legislators pay to allocations. On current form, this is not likely to be positive. Box: Guidelines from above: the importance of a ‘dasar hukum’ ‘Instructions’ or ‘requests’ from the central government were a crucial factor in encouraging districts to sign up to fund KDP. They also played an important role in budgeting. Time and again, officials referred to routine letters from the centre as a ‘dasar hukum’ that would help to persuade Bappeda, the Tim Anggaran or DPRD to accept proposals. As one PMD member in Pasaman put it, “our basis for proposing the program was very clear, that is, the letter from the central government. … If we didn’t have a letter I reckon there wouldn’t be any matching grant.” Many referred to this issue in the context of regional autonomy, under which it might be expected that districts would have a certain amount of discretion in the allocation of local government funds. However, officials did not necessarily see things this way. In the words of one bureaucrat in Lampung Timur, “although there is already regional autonomy, we still need a legal foundation from the higher up structural arm, in other words, from the centre, in order to implement development programs in the district. So if the centre doesn’t provide a legal foundation about the matching grant, perhaps we wouldn’t be able to allocate funds.” Similarly, in Sumenep, one of his counterparts noted that, “although there is already regional autonomy, in the regions, we still wait for policy from the centre, which will become a basis for carrying out development in the district.” This also played a significant role in negotiations with legislators. According to one member of the Tim Koordinasi in Lampung Timur, “although there is currently regional autonomy, we still need written legal documents from the central government to support our argument during negotiation with DPRD.” Meanwhile, in Grobogan, another official reported that, “the Tim Koordinasi actually had an idea to make our own program for locations that did not yet get any KDP funds ... but this encountered obstacles when we went to the DPRD because there was no legal foundation; the legality was not clear.” As the consultant in this location, who was familiar with these concerns, noted, “all that remains is for the central government to send a letter of appeal to make PPK Mandiri, and the local government is ready to do it.”
C. KDP and ‘profit’ Local government officials generally rated KDP very highly in terms of transparency and reducing corruption; nearly 90 percent of those surveyed rated its performance ‘good’ or ‘very good’ in this respect. They also valued this; transparency clearly rated as the second most important aspect of KDP for these officials, above the ability of the program to generate community contributions or to increase technical skills.96 However, in over one third of locations
95
Where researchers were able to elicit reasons for cuts by DPRD members, the main reason cited was ‘budget limitations’. According to one DPRD member in Sumenep, for example, “we must look at the capacity of the district to implement the matching grant, because for Sumenep, Rp. 1.5 billion is a great deal. So, we could only approve two kecamatan from the four kecamatan submitted by the executive.” His account was backed up by one official who reported that the DPRD, “only agreed two out of the four kecamatan proposed by the Tim Koordinasi because of budget limitations.” Similarly, in Grobogan, a member of the PMD reported that the DPRD Budget committee cut their proposal for four kecamatan because of budget limitations. There is some reason to doubt that budget limitations alone were the determining factor here. In particular, it is puzzling that DPRD members should become arbiters of how much budget was available. Rather, it is likely that funds were reallocated to other programs preferred by legislators. Current World Bank research on DPRD accountability would seem to bear this out (see draft papers on Magelang, Lebak) 96 In light of the fact that two surveys conducted in 1999 and 2000 found that the majority of public officials surveyed saw corruption as a serious problem, the importance attached to transparency is perhaps not entirely surprising. [Surveys carried out by Institute for Policy and Community Development Studies (IPCOS), information from Warta CIMU, April 2004]
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visited, informants also suggested that it would not suit the interest of other members of the local government to emulate the success of KDP in reducing corruption. This was also a disincentive to find the matching grant program. According to the PMD Head in Rokan Hulu, “if I were only concerned about the profitability of a project, then I certainly wouldn’t propose the matching grant program for my Dinas, since I won’t make any profit from it.”97 He made it clear that this could also be a disincentive for others. “Of course the allocation was challenged. I am sick and tired of the people here. All that they think about is profit. In 2003, when I proposed Rp 1.25 billion [for KDP], Bappeda asked me to cut down the amount to Rp. 1 billion and give them the rest for their personal purse.” Box: ‘Profit-oriented’ budgeting Many officials and legislators candidly admitted that the submission of budget proposals by the executive, and the revision and agreement of these proposals by members of the legislature (DPRD) were coloured by a preference for what have been termed ‘profit-orientated’ projects. According to one particularly outspoken agency head, for example, “for me many Dinas Heads and members of the DPRD are greedy rats and dogs that always think about profit for any project. What’s in their mind is just money and money.” Meanwhile, the Deputy Bupati in the same location reported that, “all DPRD members think about is how to get personal interest from every program submitted by the executive.” Although the exact mechanisms by which members of the executive or legislature would profit were not often elaborated, one theme that emerged in a number of interviews was the role of contractors owned by or linked to these figures. It appears that, during budgeting, projects can be ‘earmarked’ for these firms. As one interviewee noted, “Usually contractors are awarded a project as a result of a deal they made with the local government, Dinas or even directly with the Bupati. An envelope (money) is the manifestation of their deal with the bureaucrat for receiving the project.” In one district, a number of informants, including the Head of Bappeda, complained that the budget committee, composed of the Sekda and three of the Bupati’s ‘right hand men’, jettisoned many proposals, including that for the matching grant program, replacing them with those that would benefit “some of the contractors who became his ‘golden children’.” In another, the project consultant noted his belief that budget allocations were skewed by the fact that many members of the DPRD owned contracting firms. A recent report from research institute Smeru notes that, “the use of legislative powers is currently only being used to promote the legislature’s interests, not to empower the people they represent.” This is hard to dispute. At the current time, stories about abuse of district budgets by legislators are rife. As reported recently, “state prosecutors found evidence linking thousands of councillors to graft cases in almost every province, regency and city across the country.” In more than one case, this included every single member of the legislature. What is also clear, both from discussion with district officials and from ongoing investigations in a number of districts, is that local officials are also implicated in such activities.
Officials and legislators in one or two districts also claimed that the Bupati himself did not support KDP for this reason. In one the Bupati has twice been in the news since March of this year in relation to problems with contractors, most recently when he announced that he was ‘ready to be investigated’ for problems with contractors working on the Dutch governmentfunded School Improvement Grant Program (SIGP).98 According to one legislator, who pointed to the close connections of the Bupati with a number of contractors, “the allocation for the matching grant program was not added to the APBD because the Bupati could not get an envelope [money] from it”99 Senior officials from the PMD and Bappeda bore out this story, of the Bupati’s
97
Susilo, Head of PM Rokanhulu See Jawa Pos, August 3, 2004, “Markum Siap Tanggung Jawab” 99 Komisi D member, DPRD Ponorogo 98
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resistance, finally prevailing upon legislators to intercede with the District Head to make him live up to their commitment to provide funds. As one legislator subsequently explained: “Bappeda members didn’t want to discuss the issue directly with the Bupati, because they were afraid that he would demote them. They asked for help from the DPRD. So I and other members of the Development Commission met the Bupati and asked why the matching grant program hadn’t been included in the RAPBD. I asked was it because the Bupati couldn’t get an envelope [money] from it. The Bupati was angry, and said that it would be entered into the revised budget. But [we] weren’t satisfied with an oral commitment. We insisted that the allocation would definitely be entered into the RAPBD before we would approve it.”100 As noted earlier, DPRD members did not normally play a significant role in questioning or contesting allocations to KDP, in large part because the amount involved was generally relatively small. This might help to explain why, although legislators in at least one location were reported to have rejected plans by the executive to adopt KDP procedures in other programs because they could not profit, there was no information to suggest that such calculations had formed part of their thinking about allocations the matching grant program. However, it seems reasonable to speculate that, as allocations to the program increase, ‘profit-orientation’ might come to play a more significant role in the calculations of members of district executives and legislatures. 2. Operational issues: information, rules and knowledge A. Clear and timely information A number of consultants voiced concern about delays in information and policy for district-level Tim Koordinasi. As one wrote, “information received by Tim Koordinasi in the district is often late and unclear, so their participation is often delayed.”101 Some complained that they regularly received information through the consultant network long before the official versions arrived through ‘protocolairre’ channels.102 Although these issues were not confined to the matching grant program, they became particularly pressing when they involved local government funding. The lessons are simple: failure to provide clear, timely and reliable information will lead to missed opportunities and generate frustration, and will likely erode goodwill for the program. Case 1: Postponement of KDP2 Many officials complained about the postponement of KDP in 2002. As one member of Bappeda in Boyolali commented, “we were disappointed. … It was a very bitter experience.” This delay interfered with planning and led to questions from legislators about failure to use funds set aside for the program. As a result, some demanded firm guarantees before they would commit district funds. This occurred in Ponorogo, where one legislator explained, “if they allocated the funds but the program was not implemented, it would be difficult for the Bupati. The DPRD would question why the program was not realized. So the executive just waited for confirmation.” The Head of Bappeda in Sumenep was vocal about this issue, declaring that, “the central government doesn’t need to hope that the district will allocate funds for the matching grant program if it can’t even confirm consultant staff for the same year.”
100
Komisi D member, DPRD Ponorogo KMKab, Purworejo, Central Java 102 KMKab, Ponorogo, East Java; KMKab, Lampung Timur, Lampung 101
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Case 2: Missed opportunities in 2004 In four districts, local governments were keen to provide additional funding to KDP in 2004. However, their interest soon turned to confusion about whether this was possible. As one official reported, “we made calls to the PMD in Jakarta to confirm the information on the matching grant program, and we also sent a fax. But we didn’t get any answer until finally a letter came.” This letter was sent at the end of December, when budgeting should already have been concluded. For some, it came too late. According to one informant in Lampung Timur, officials had to abandon plans to fund five additional kecamatan. Others grumbled about the experience. According to one informant in Grobogan, “it was too close to the approval of the budget … we didn’t want to do it because of the limited time.” Case 3: A vacuum of information on KDP3 Frustrated by the speed with which information arrived from the centre, in Grobogan and Lampung Timur, consultants took matters into their own hands, disseminating cost sharing plans in KDP3 with local officials. As one official in Lampung Timur reported, “the district prepared for the mixed grant in September 2003. … We got the information as a rumour, and afterwards, we conducted a hearing with the DPRD. However, the letter from the centre never came…” Officials and consultants in both locations complained bitterly about the lack of solid information. In Grobogan, for example, one consultant commented, to the assent of officials, “the real question is not the commitment of the district to the matching grant program, but the commitment of the central government. The centre often flip-flops. Just imagine: information about implementation in 2004 is not at all clear. So when will it start? In 2002, the matching grant was delayed and now KDP sharing is also delayed. If it can’t be implemented, it would be better if the centre didn’t raise the issues.”
B. Rules and sanctions During the first year of the matching grant program, many districts failed to live up to their commitments. As noted previously, for example, 18 percent of sub-districts that received grant funding from local governments suffered from shortfalls worth an average of Rp. 300-350 million each.103 These problems were not countered by systematic use of sanctions. Despite the fact that technical assistance for facilitation in matching grant locations was provided from the centre, for example, reductions in district funding were not countered by withdrawal of assistance. It is likely that clear sanctions, and socialization of them, would go some way to ensuring that members of the executive lived up to the commitments of their district. C. Operational knowledge of the program C1. Staff turnover on the Tim Koordinasi A number of consultants and officials commented on high staff turnover on the district Tim Koordinasi. According to informants in Blitar and Gorontalo, for example, within six months, the composition of the team could change utterly. This had a negative impact on the ability of officials to engage in the program. As one member of the Tim Koordinasi in Blitar reported, “all of the Tim Koordinasi members are new to the program. They don’t understand KDP procedure, and they don’t yet have knowledge of the program.”104 Although this phenomenon raises wider concerns about long-term buy-in and funding for KDP, it also impacted on existing commitments.
103 104
Based on results from matching grant survey Sekretaris TKPPK, Blitar
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Box: Staff turnover and loss of operational knowledge In the two years that passed since Ponorogo district agreed to contribute funds to KDP, there was a complete turnover of staff on the district coordination team. As a result, officials failed to enter funds for the program in the draft budget. As the Tim Koordinasi Head reported, “I never knew about the commitment between the Bupati and the DPRD, so it was hard to submit the proposal,” an account backed up by one of his juniors, who admitted that he had been unable to locate key documents relating to the program. Lobbying by the consultant and the arrival of an official letter from the central government, helped to jolt officials into action shortly before the budget was finalized. Nevertheless, as a former member of the team noted, “staff turnover really became an obstacle to implementation of the program.” Meanwhile, in Kendari, confusion and uncertainty caused by staff turnover played a role in the failure to allocate budget to the matching grant program in 2003. This was exacerbated by problems caused by the handover of authority from Bappeda to PMD, which occurred in the middle of 2003. Although he did not understand why Bappeda had not submitted a budget proposal, one PMD staff member noted that most of the Bappeda staff involved in sign up to the program had already moved to other Dinas. In his view, “the turnover of staff made coordination of the budget allocation difficult.”
C2. Legislators’ understanding of and involvement in KDP Key members of district legislatures, such as its chairman, or the head of the development commission generally had little grasp of what KDP was about. It was common, as a prelude to interviews, for them to require explanations of the program, or even personal introductions to the consultant. Indeed, in Pasaman, which allocated Rp. 1.5 billion to KDP, one official laughingly related that, “the DPRD don’t know what the matching grant is. They think it is something like a marching band.”105 In some cases this might well have been due to lack of interest. In Magelang, for example, one official reported that, “it can be difficult to talk to DPRD people [about KDP]. They always send different people to attend meetings, so there are difficulties for them to truly understand the program.”106 Meanwhile, according to one DPRD Chairman, members of the institution were ‘too lazy’ or ‘too busy with their own business’ to even turn up to meetings.107 In at least one district, this appeared to relate to a narrow conception of legislators about their role. According to one Deputy Chairman of the DPRD in Sijunjung, “our duties are only related to budget allocations. ... If you want to know about implementation of the program, you should talk to Dinas members.”108 Nevertheless, in two or three other districts, DPRD members exhibited a great deal of interest, but expressed frustration at lack of information about the program. In Lampung Timur, for example, the head of the DPRD Development Commission complained that, “the executive never communicates with us about KDP. They never invite us to discuss about the project. … Relying on the budgeting process to communicate about KDP is not enough.”109 A local journalist who had often written about KDP reinforced these complaints. In her experience, “in general, members of DPRD lack information on KDP and feel ignored and left out.”110
105
Anggota TKPPK, Pasa_FGD_1504 Miharsih, PMD Staff, Magelang 107 DPRD Chairman, Boyolali. 108 Deputy Chairman DPRD, Sijunjung. See also “Governance and Poverty Reduction: Evidence from a Newly Decentralized Indonesia”; Sumarto, Suryahadi & Arifianti, SMERU, 2004: “DPRD members perception of their own authority tends to be narrow-minded and static. They feel that their functions are only to ‘legitimize’ policies.” 109 Head of Development Commission (Komisi D), DPRD, Lampung Timur 110 Sri, Journalist, Radar Lampung. See section on monitoring and reporting of budget Part II: III. 106
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PART II: DISBURSAL AND TAXATION OF FUNDS Key findings In general there was a great deal of willingness to accommodate KDP procedures. However, these conflicted with district procedures, leading to violations of district and program rules. These conflicts can and should be rectified. Better guidance for consultants and officials would also reduce confusion. •
KDP fund request procedures. These are not entirely relevant to district processes of fund authorization, making violations ‘costless’ for officials.
•
Delays in disbursal. Administrative problems during fund authorization were the biggest cause of delays, followed by problems with empty district treasuries. These will continue to occur.
•
Direct disbursal. Direct transfers from treasury to projects contravene normal district procedures on disbursals through spending unit accounts. There is little reason to insist on this condition.
•
Conflict with the budget year. This was the main cause of violations to KDP and district procedures and created great difficulties for officials. It should be avoided by aligning KDP with the budget year.
•
Taxation. This can generally be negotiated. However, variations in local regulations and interpretations of central regulations will result in a minority of districts that insist on applying it.
•
Disbursement of funds was a vexed issue during the first year of the matching grant program. Over 60 percent of consultants and officials surveyed volunteered concerns about this aspect of the scheme. Officials invariably complained of difficulties budgeting for a program that ran over two fiscal years, while district funds had to be disbursed within a single budget year. The flow of funds to sub-districts also caused concern, due to conflict between direct disbursal procedures in KDP and normal district procedures for disbursals. Finally, in some districts, officials wished to deduct tax from local government allocations. Box: Violations of KDP and district procedures Procedural conflicts often led to violations of KDP procedures. There were documented in the survey: Over one-third of districts ignored fund request procedures. In 49% of districts, officials asked that funds be disbursed before the fiscal year-end. This led to violations of fund authorization procedures. 29% of districts failed to follow a three-stage rule for disbursals, while in others reports were sometimes faked. In nearly one-third of districts there were delays in disbursals. Consultants in 29% of districts reported delays in disbursals as a result of district procedures. The main reasons were bureaucracy (39%), empty district treasuries (kas kosong, in 33%), and the closing of the district budget (22%). Only half of districts disbursed funds directly. Only 52% of districts sent funds direct from treasury to kecamatan accounts. Others were loath to depart from the standard use of intermediary agency accounts. In eight percent of districts, matching grant funds were taxed. This was typically a 10-11.5% tax on procurement. In many districts, officials were able to negotiate with colleagues to waive tax. Conflicts also led to violations of district procedures, particularly as officials tried to use workarounds to the fiscal year mismatch. The most serious of these were disbursal of funds to non-governmental accounts, which occurred in 15 percent of districts surveyed, and use of other informal practices such as borrowing funds from the treasury and submission of false implementation reports.
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Interestingly, officials in districts that did not contribute to KDP were sometimes well aware of problems faced by their counterparts. According to the Head of Bappeda in Kuantan Singingi, for example, “the problem is that there is no synchronization of disbursals with implementation,” an opinion shared by the Tim Koordinasi Head in Kotabaru, who provided lengthy suggestions for how remedy this.111 Indeed, anecdote suggests that officials here saw this as a disincentive to allocate funds to KDP, despite the fact that they rated the program highly. This lends weight to the comment of one consultant that if such problems recur, “it will complicate the situation in the field and make the district think again before allocating budget to the matching grant program.”112 1. Fund authorization and disbursal procedures The direct transfer system is an integral part of the management of fund transfers to KDP. Grants from the central government are disbursed direct from the national treasury to a collective account (rekening kollektif) in participating kecamatan. There are no intermediaries. This grant is disbursed in three tranches of 40%, 40% and 20%. The first tranche is disbursed upon submission of a fund request to the district branch of KPKN (the national treasury). Transfer of the second and third tranches depends on the accounted-for use of at least 90% of the previous tranche. KDP fund requests follow a standard format. Disbursal requests (Surat Perintah Pencairan Langsung, or SPP-LS) for KPKN are co-signed by the head of the Financial Management Unit (UPK) and kecamatan-based project manager (PjOK). For the first disbursal, this is accompanied by a summary of village proposals and the amount allocated to each (Surat Perjanjian Pemberian Dana, or SP2D). The sub-district head is an additional signatory to this. Requests for disbursal of second and third tranches are accompanied by a summary of village expenditures and status report from the bank, which provide evidence of the level of realization of the previous tranche.
Box: Local government financial management In June 2002, a Ministry of Home Affairs Regulation (Kepmendagri 29/2002) introduced a new financial management system for local governments, which included substantial changes in budgeting. Along with the introduction of a framework for performance-based budgeting, responsibility for drawing up, disbursing and reporting on budget was placed squarely on spending unit (e.g. Dinas) heads. This entailed a switch from the previous project-based (DIP) system to one based on departmental administration. In this system, spending unit heads are responsible for the submission of budget documents, which list proposed expenditures for the upcoming year. Following agreement of the budget, these documents (which become known as Dokumen Anggaran Satuan Kerja or DASK) form the basis for financial administration. The head of a spending unit is responsible for submitting fund requests and all funds flow through accounts administered by departmental treasurers. At the end of every month, unit heads must report on revenues and spending, and the progress and performance of programs. Their reports form the basis for three-monthly reports for the district legislature. One feature of local budgeting that remained unchanged was the cut-off of budget at the end of the fiscal year. Prior to this (at the end of December), the general district treasurer must call a halt to disbursals. All transactions should be closed, reports finalized and remaining funds returned to the district treasury. Use of this budget will be reported to the legislature during the annual accountability speech of the Bupati in the following months. Unrealized funds should be re-budgeted in the APBD for the following year.
111 112
Bappeda, Kuantan Singingi, Riau TKPPK, Kotabaru, South Kalimantan KMKab, Batang, Central Java
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Having agreed to abide by KDP rules and manuals, in principle, officials were bound to observe the mechanism of staged disbursals based on the submission of funding requests and reports from participating kecamatan. This was outlined in sample Surat Edaran sent by the central government, which only required the signature of Bupatis to become official district procedure. A. Fund authorization Districts tended to adopt KDP formats wholesale. In only one out of six districts (Boyolali) did researchers find that these had been intentionally modified, and then only by modification of the formal summary of village proposals (SP2D) to include the signature of the local empowerment agency head. The rationale for this was that, as head of the agency responsible for fund allocations to the program, the Chairman of the Tim Koordinasi should take responsibility for verifying competition results, rather than delegating this task to kecamatan officials. Processing of fund requests was a different story. In no district were kecamatan officials deemed competent to request the release of funds direct from the district treasury, as they did from KPKN. The limited authority of the PjOK was noted by the Tim Koordinasi Head in Trenggalek, who wrote that, “it’s impossible for the kecamatan apparatus to arrange disbursal of APBD funds. The PjOK doesn’t have a significant role in disbursals.”113 It is reasonably clear why this should be the case. Spending unit (i.e. Dinas) heads are responsible disbursals to programs listed in the annual budget documents for their department.114 While agency heads might theoretically be able to depute PjOK to sign and submit these requests, this was never found to have occurred. Figure: KDP Fund Request and Authorization Procedures Community proposals Winning proposals from MAD UPK UPK Chair & PjOK cosign fund request (SPP-LS) and attachments MATCHING GRANT
FULL GRANT
TKPPK Receive SPP-LS. Dinas Head prepares and signs new SPP Kas Daerah (District treasury) Receive SPP, submit to Bupati Bupati Sign Surat Keterangan Otorisisi (SKO) Kas Daerah Prepare Surat Perintah Membayer Uang (SP-MU) for bank
KPKN (Treasury branch)
Fund requests from matching grant kecamatan still played a role in the disbursal of funds, as stipulated in Surat Edaran issued by Bupatis. However, in almost every case it appears that it was necessary for the head of the district agency responsible for coordinating the program to prepare a further fund request (Surat Perintah Pembayeran or SPP) for the district treasury (Kas Daerah). 113 114
Komentar & Saran, MG Survey, TKPPK Trenggalek, Jawa Timur See Ministry of Home Affairs Regulation 29/ 2002, Section 38, section 1 & 2
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From here, fund requests were normally forwarded to the Bupati’s office, where the District Head would put his signature to a Letter of Authorisation (Surat Keterangan Otorisasi or SKO) for the release of funds. This would be returned to the Kas Daerah, which would then prepare a letter (Surat Perintah Membayer Uang, or SP-MU) requesting disbursal from the government account. It is not clear whether, with the receipt of fund requests from agency heads, treasury officials found it further necessary to refer to KDP formats. However, given the number of districts that made disbursals in violation of KDP fund authorization (request and reporting) procedures (it would be reasonable to estimate that violations occurred in over half of districts),115 it seems fair to say that standard KDP fund request formats and procedures did not play a significant role in the bureaucratic process. It seems likely that they were followed, or ignored, more or less at will. Box: Administrative delays Problems with bureaucracy were the main cause of delays in disbursals to kecamatan participating in the matching grant program. These were almost invariably the result of simple administrative failures, commonly related to the absence of district staff who played a role in fund authorization procedures. In Kendari, the Bupati’s attendance of a leadership course (Lemhanas) in Jakarta led to a three-month delay in disbursals. According to the deputy head of the district, “even as deputy Bupati I was not authorized to disburse money for the matching grant.” Meanwhile, in Buton, the merger of PMD with another Dinas held up disbursals for three months until a new Dinas Head was appointed. There were also lesser delays in Sijunjung, where the treasurer of the District Secretariat was on honeymoon, and in Boyolali and Lumajang, where facilitators complained of the lack of availability of treasury officials. Although facilitators in one or two of these locations were able to shepherd allocations part of the way through the bureaucracy, in others, such as Buton, Kendari and Sijunjung, little could be done to speed the process. It is likely that such problems will continue to recur, although less so, with current plans for district disbursals to take place in one or two tranches, rather than three. Perhaps it is also to be hoped that administrative practices might gradually become more refined to anticipate such problems, for example, with implementation of practices such as use of deputies to sign official documents.
B. Direct disbursals There was a slight conflict between standard district disbursal procedures, in which funds should normally flow through agency accounts, and that used in KDP, in which funds normally flow direct from the treasury (KPKN) to kecamatan. In the sample circular letter sent to districts, it was specified that this latter method should be used. This led officials to understand that transfers to KDP should circumvent normal district procedures. Sometimes this caused confusion. In three or four cases, officials complained that they could not disburse funds in contravention of rules requiring that they flow through Dinas accounts. Meanwhile, one district consultant, concerned to defend KDP rules, disputed officials’ plans to disburse funds by way of official accounts.116 This should probably not have been much of an issue, and in most cases it wasn’t. From the perspective of safeguarding KDP funds, there should be little problem with these funds flowing through Dinas accounts, which are governed by strict reporting requirements. Meanwhile, in those districts where officials arranged direct disbursals, it appears the district treasury was
115
This estimation is based on the survey finding that 29% of districts did not disburse funds in three tranches of 40% 40% and 20%. Interviews found that even among those that did, in over half, standard procedures were ignored in favour of rapid disbursal prior to the fiscal year end. Meanwhile, in the survey, just under half (49%) of consultants were asked by officials to ensure that this occurred. 116 Agus, Consultant, Lumajang
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apparently relatively happy to accede to the direct transfer system laid out in the Bupati’s Surat Edaran. Nevertheless, the fact that conflict existed did give rise to concern. 2. Timing of disbursals: KDP and the district fiscal year The main cause of problems was a conflict between annual district budgeting and the KDP project cycle, which normally runs over two fiscal years. This created a dilemma for consultants and officials. With funds from the district budget at stake, many were keen to ensure that all disbursals could be made prior to the close of the district fiscal year. Yet, they were also committed to following KDP procedures, which made disbursals conditional on implementation. At the same time, both were keen to avoid delays in disbursals to KDP that might have resulted from attempting to carry over funds from one year to the next. Complicating the issue was the fact that these concerns could sometimes be reconciled by circumventing district rules on the close of budget, for example, by disbursing to non-governmental accounts or faking reports. A. Conflicting concerns A1. Fear of censure In almost every district, officials worried that they would face censure if projects failed to meet the deadline for disbursals by the fiscal year-end. Their concerns invariably revolved around the Bupati’s annual accountability report (LPJ). This budget report, normally delivered between January and April, is the main event in the accountability of the executive to the legislature. During this process, legislators often focus on failure to disburse funds as an indicator of poor performance. As the PMD Head in Ponorogo complained, “if we do not disburse funds before the end of the year, the DPRD will say that the executive is not capable of doing its job.” Fears that unrealized budget would result in censure extended to the highest levels of the executive. In Karawang, for example, the Sekda pointedly remarked that, “the matching grant should involve a match between KDP and the district on many issues, but especially on the annual reporting of the development budget to the DPRD.” Similarly, the Head of the Provincial Tim Koordinasi in South-East Sulawesi noted that unrealized budget for KDP, “would really lower the credibility of the Bupati in the eyes of the DPRD.”117 Public airing of the failings of lower level officials during this process would likely reflect badly on the Bupati, whose wrath they might then incur. According to the Secretary of the Tim Koordinasi in Donggala, for example, “that would be very embarrassing for me. The DPRD would question the Bupati about why the funds had not been used, and he might impose a sanction on me. Maybe I would even get sacked.” This did occur in Sumenep, where unrealized budget allocated to the program in 2002 became an issue in the annual accountability hearing for the Bupati. As one member of the Tim Koordinasi related, “the ones who bore the brunt of the Bupati’s anger were us … the ones who were directly connected with the program.”118 A2. Concern about delays Consultants and members of KDP Tim Koordinasi were also motivated by a desire to ensure that disbursals ran smoothly. Quite apart from concerns about censure, they expressed concern that, if 117
Aksioma, Head of TKPPK Propinsi, Sulawesi Tenggara Salaf, PMD Staff/ Anggota TKPPK, Sumenep. It is worth noting that while concern to avoid such situations from occurring were invariably cited by officials, where problems did arise, the same informants would often report that it was quite easy for them to manage criticism. And of course, they would have had the reasonable alibi that disbursals to KDP were really out of their hands. Perhaps one explanation for this is that problems arising out of the accountability process might be as much political as performance-related, and legislators might not necessarily be looking for reasons. In many districts, government servants might be wary of providing legislators with ammunition that could be used for political purposes. 118
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funds for the program remained in the treasury beyond the close of the fiscal year, disbursals would encounter delays while they were re-budgeted for the following year. Although this should occur by December of the previous fiscal year, in most locations, the APBD for 2004 would not have not approved until February or March, and in a significant minority of cases, not until after.119 A number of informants also noted that unrealized funds might be used for other purposes. In Pasaman, for example, the Head of Bappeda noted that, “once funds are returned to the Kas Daerah, they can become open to competition from every Dinas.” Meanwhile, in Ponorogo, the Chairman of the Tim Koordinasi expressed concern that funds would not be safe from ‘money politics’ during this process, “especially during an election year, when members of the DPRD might need retirement funds.” A3. Conflict with the PTO While many officials admitted that, with other projects, fear of delays and censure could result in a year-end rush to disburse, this would have conflicted with KDP rules, which make disbursals conditional on the use of previous tranches of funding. As noted above, in most districts, officials were theoretically committed to following these rules by a circular letter signed by the Bupati. This should have governed these disbursals. As the Secretary of the Tim Koordinasi in Donggala complained, “we have to carry out everything according to the PTO [operational guidelines].” Similarly, although consultants were also concerned to avoid problems that might have resulted from rollover of project funding, they were naturally reluctant to see funds disbursed in a manner that would breach KDP rules. For some, this was a determining factor. According to a consultant in Lumajang, who had intervened to stop officials disbursing funds early, “here we do everything according to the rules.” Just how strictly consultants chose to interpret these rules varied from district to district. There was little by way of central intervention or guidance on these matters. B. Possible workarounds: circumventing district rules There were a number of potential workarounds to the problem of the cut off of funding at the close of the year. The first, which was seen in two districts visited, and mooted in others, was use of a ‘discretionary fund’ that came directly within the purview of the Bupati. Other approaches were informal, and violated district procedures. They included borrowing funds from the district treasury to cover KDP implementation during the crossover from one fiscal year to the next, faking reports to the treasury in order that funds did not need to be returned, and disbursal of funds to non-governmental ‘holding’ accounts. B1. Discretionary accounts In most districts, matching grant allocations were listed in departmental budget documents and administered by agency members. However, in Serang, following the postponement of KDP in 2002, funds were entered into a so-called Pos Pembiyayaan under the direct control of the Sekda, a solution that enabled them to be carried over to the following year. Similarly, in Sijunjung, officials reported that funds for the matching grant program in 2003 were to be drawn from the so-called Pos Bantuan under the Sekda, in order to avoid problems with the close of the budget. While the rules governing use of these funds were not clear, it appears that the Sekda had a great deal of discretion over their use, and could avoid constraints imposed by the fiscal year. However, as one consultant in Serang pointed out, the ‘flexibility’ of these funds might be cause for concern, since they could easily be diverted to other purposes.
119
Based on responses from Ketua TKPPK in 51 districts surveyed as part of the matching grant survey.
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B2. Borrowing funds Among the informal practices used to avoid problems with delays in disbursals following the close of the budget, the practice of borrowing money from the treasury was reported by Dinas Heads or members in many districts, among them Lumajang and Boalemo. According to the Head of the PMD in Boalemo, for example, although the district had no formal mechanism for rolling over unspent funds, he could arrange for the disbursal of unspent funds from the treasury prior to the agreement of the budget for the following year (a process he called ‘dititipkan’).
B3. Falsifying reports Agency heads could also avoid rules on the close of budget by making false reports. According to a consultant in Lampung Timur, “the Tim Koordinasi had a strategy to avoid the closing date of the budget. They took 100 percent of the funds from the treasury to the Pimpro account. The important thing was that, before the budget closing date, the funds were out of the Kas Daerah. So the Tim Koordinasi made a responsibility report [to the treasury] first, even though the money was not yet transferred to the UPK.”120 Meanwhile, in Pasaman, the Head of Bappeda admitted that she would certainly consider making up financial reports in order to retain the ability to disburse funds to programs following the closing of district budget.121 Figure: District Disbursals to KDP Kas Daerah (district branch of provincebased government bank)
Rekening Khusus Dinas Special (non-governmental) acccount under Dinas member – 10% of districts
Rekening Khusus UPK Special (non-governmental) account under UPK – 5% of districts
Funds direct to UPK - 52% of districts
Official Dinas Account (Rekening Bendahara/ Rekening Pimpro) – at least 25% of districts
Rekening Kolektif UPK Villagers’ collective accounts in UPK
Based on 63 survey returns from KMKab, cross-referenced with returns from 56 TKPPK members Dotted line shows possibility funds flowed through official accounts. Anomalous cases excluded here.
B4. Disbursal to non-governmental accounts In many districts, consultants reported that they had requested for matching grant funds to be disbursed to a special (non-governmental) would have enabled the Tim Koordinasi Figure account. based on a This sample of 63 matching grant districts surveyed to ensure that funds were disbursed from the treasury before December, but still follow KDP rules on disbursals in three stages, on the back of fund requests. Two possibilities were considered. The first was disbursal of funds to a private account controlled by a Tim Koordinasi member. This was often referred to as a Rekening Khusus Dinas. The second was disbursal to a special account
120
Consultant, Lampung Timur Evi, Kepala Bappeda, Pasaman; It is worth noting that consultants and facilitators sometimes colluded in faking their own reports. See transcripts for Lampung Timur: “We understand that, since APBD funds are being used, they need to be reported by the Bupati’s LPJ ... So what we do to deal with that situation is that during the work we also prepare [implementation] reports, and sometimes if necessary we finish the report even the work has not been finished.” Kecamatan Facilitator, Lampung Timur. This was not a totally isolated case. 121
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mirroring the official UPK Rekening Kolektif and controlled by KDP actors at sub-district level.122 As noted by some officials, however, such practices do not conform to Department of Home Affairs (Mendagri) regulations.123 Many officials reported that the Finance Department had rejected their request to use such an account, due to concerns that funds would be misused.124 While these solutions appealed, they were only used in 15 percent of districts surveyed. 3. Taxation In only eight percent of districts surveyed was tax levied on matching grant funds. In locations where respondents provided further information, the common element was a procurement tax worth between 10 and 11.5 percent of the value of materials. However, reasons for levying tax varied. While one Tim Koordinasi Head reported that the application of tax was based on a twenty-year old law, the other two pointed to local regulations (Perda). In one, the Perda predated decentralization, while in the other, it was only established in 2003.125 Table: Taxation of matching grant funds District
Amount of tax
Reason
Kendal
No information provided
No information provided
Magetan
11 percent
Way Kanan
10% for materials
Undang Undang 6/1983 on Ketentuan Umum & Tata Cara Perpajakan Perda 1/2003 on Pokok Pengelolaan Keuangan
Ngada
11,5% for non-local materials and 20% from district standar harga for local materials No information provided
Kendari
Perda 7/1998 on Tarrifs (Retribusi) No information provided
Taxation was generally waived, often because districts were requested to do so. It was common to hear that, “there was no tax, because the petunjuk [guidelines] said there should not be.”126 In the majority of cases this was rationalized on the basis that funds for KDP were Community Managed Funds (swakelola) for Direct Community Aid (Bantuan Langsung Masyarakat) and therefore not subject to tax. According to the head of the Finance Department in Pasaman, for example, “there is no tax for the matching grant, since it is classified as swakelola, which means that the funds go direct to the community and are used by the community.”127 This sometimes involved negotiation. In four locations, consultants or Tim Koordinasi members reported that they intervened to dissuade the Tax Agency (Dinas Pajak) from levying tax on procurements. In all but one, tax officials heeded the central government request not to do so. In Magelang, however, officials were unmoved by any of the consultant’s efforts. As a result, in 2003, a 10 percent procurement tax was levied on building materials, and a further 1 percent income tax was imposed on honoraria for teachers. The latter was particularly galling for the consultant, who opined that the tax agency was exceeding its legal mandate. However, as she admitted, there was little she could do. In the one district-funded kecamatan, tax levied on building materials and teachers fees came to just under Rp. 47 million, around 6.2% of the total grant allocated to this sub-district. 122
Although it was clear that this was essentially an analogue of the normal UPK account, there was a little variation in terms of who was responsible. 123 Trie Murnlise, Bappeda, Boyolali 124 This was seen in Donggala, Buolemo, Gorontalo, and Ponorogo, among others. 125 Based on 63 valid responses to the KMKab survey, crossreferenced against the TKPPK survey 126 Gambuh, Bappeda staff/ TKPPK Member, Blitar; see also Gultom, PMD Staff/ TKPPK member, Lampung Timur 127 Information from Karawang, Boyolali, Lampung Timur, and Rokan Hulu was more or less the same.
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PART III: MONITORING AND REPORTING Key findings Although use of local government funds might be expected to stimulate increased interest, local government monitoring of funds and implementation was not normally more intensive in matching grant locations. Research identified a number of problems that affected monitoring and reporting of KDP: •
Systemic weaknesses. The accountability system in local government hardly stimulates good monitoring and reporting. Researchers never found evidence of significant debate about KDP during the annual accountability process. Legislators are unlikely to raise significant questions about performance, and district heads are therefore unlikely to see evidence of success or failure unless they take a strong personal interest. Despite introduction of ‘performance-based’ budgeting, there is little stimulus for officials to formulate meaningful performance indicators and monitor systematically.
•
Sectoral thinking. As also seen in budgeting, agencies other than PMD and Bappeda are not often very involved in monitoring and reporting on the program. Lack of a clear role and financial stake are likely to be the main reasons. In connection with the latter, control of operational funding is a significant issue, though it will not easily be resolved.
•
Lack of understanding of KDP. This is likely to have affected the effectiveness of monitoring by members of Tim Koordinasi and legislators. o
In Tim Koordinasi, this was sometimes related to staff turnover, and resultant limited understanding of KDP processes and procedures. It might be worth considering targeted socialization activities for those that are interested and would benefit.
o
Although many legislators are likely to be genuinely unmotivated to engage constructively, in three or four districts there was pent up demand for involvement and information, and complaints of exclusion. More room for involvement (for those from relevant commissions and KDP locations) would be greeted enthusiastically by some. This problem was also noted during the budget process, during which support from legislators might be of help in preventing reductions.
Local officials were involved in monitoring and reporting on KDP prior to the implementation of the matching grant program. Kecamatan project managers were required to report monthly to local coordination teams. Members of the team would also carry out monitoring trips to subdistricts and villages, and local audit agency, Bawasda, also conducted audits on central funds for the program. Use of these funds should also have been reported to local legislators during the Bupati’s accountability speech to the legislature. This was not the only occasion on which DPRD members were involved. In many districts, legislators said that, as part of their routine monitoring activities, they looked at the implementation of KDP. Since matching grant funds came from the district budget, it might be expected that this would have had an impact on scrutiny. This was not often the case. In the survey, 92 percent of Tim Koordinasi and Bappeda Heads reported that monitoring of implementation in matching grant locations was the same as or less intensive than monitoring in full grant locations and 84 percent reported that scrutiny of funds was the same as or less intense than in full grant locations. This section therefore focuses on the general issue of monitoring and reporting, including who and what was involved, and why it was often no different for full- and matching-grant funds.
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1. Monitoring and reporting in the executive A. Reporting requirements As the official directly responsible for government coordination of the program at kecamatan level, PjOK are generally required to provide monthly progress reports to district Tim Koordinasi. These reports are generally less detailed than those of KDP facilitators, whose monthly reports were sometimes said to form the basis for documents produced by PjOK.128 They were neither more frequent nor more detailed in locations that received district funds.129 Perhaps failure to impose additional reporting requirements was related to satisfaction with current arrangements. Three-quarters of officials surveyed rated reporting and information in KDP as ‘good’ or ‘very good’. Conceivably, they did not see the need to do more. However, it is also worth noting that senior officials, such as Bupatis, rarely asked to see reports. While officials in two or three districts, such as Sijunjung and Sumenep, were required to provide regular reports, it appears that most were not. There was therefore little incentive to gather more information. B. Who carried out monitoring, and how often? Members of the Tim Koordinasi from local empowerment agencies were most heavily involved in monitoring and coordination. According to consultants surveyed, in over half of locations, PMD officials carried out monitoring with consultants more than ten times in a year, and in 100 percent more than twice a year. Members of the Tim Koordinasi from Bappeda were next most likely to be involved. However, they were less active. Only in 15 percent of locations did members of Bappeda join consultants on field trips more than ten times in one year, and in only 66 percent of districts did they do so more than twice. Interviews found that members of other agencies were not normally involved in routine monitoring. Indeed, in at least one third of locations, PMD and Bappeda officials indicated that there was poor coordination with members of other agencies on the Tim Koordinasi. Box: Operational funding and jealousy Local government operational funding for KDP was a major sticking point. These funds, which normally account for around five percent of grant funding, are intended to cover expenses of district and sub-district bureaucrats. However, although some districts formulated rules governing distribution, in others, the lion’s share remained in PMD. In around half of locations visited, the unwillingness of PMD to share these funds was cited as a reason for lack of involvement of members of other agencies. However, this was not a clear-cut issue. PMD members in some locations claimed that members of other agencies were more interested in getting their ‘cut’ than in using funds for their intended purpose. A sense of the vexed nature of this issue can be seen from Rokan Hulu, where the head of the empowerment agency noted that, “usually the only active members of the Tim Koordinasi in monitoring are from Dinas SPPM [the empowerment agency], while other Dinas never join. You know why? Because other Dinas consider the amount of money for monitoring is too small. So they are not interested. That is a fact.” However, willingness in the agency to share was also questionable. One member voiced the opinion that operational funds for members of other Dinas should come from their departmental budget, while according to a member of Bappeda, “all of the implementation was handled by PMD alone, without any involvement from Bappeda. The PMD never invited us to carry out monitoring.”
128
In locations where researchers viewed PjOK reports, such as Lumajang and Sumenep, they were somewhat less detailed than those of facilitators, listing only dates and the location of activities, with little or no detail on the process. In Grobogan, Sumenep, Rokan Hulu, researchers found that these had been compiled from facilitators’ reports. 129 In only one district was there found to be any difference in demand for the frequency of reports. This was in Ponorogo, where PjOK and FK complained that the deadline for these reports was stricter than for full grant locations.. In Sumenep, one PjOK said that the Tim Koordinasi required his report go into more detail on infrastructure and loan activities than those from full grant kecamatan, and provide attachments such as charts and photographs.
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The fact that members of local empowerment agencies were most heavily involved in KDP is not surprising. Since their agency was in charge of the team responsible for handling coordination of the program, monitoring and reporting was clearly within their ambit. Bappeda was also relatively active. Having previously led local government coordination, in many districts Bappeda staff were quite knowledgeable about and involved in KDP. Indeed, in three or four districts visited, such as Serang and Blitar, the agency still assumed primary responsibility for coordination, either formally, or in a de facto manner. C. What did monitoring involve? Monitoring by officials was not normally systematic or structured. Officials usually appeared to conceive monitoring simply in terms of attendance at meetings and field visits as a way to resolve problems that they knew to exist. Although some Tim Koordinaisi attempted to formulate monitoring schedules, others conducted monitoring on an ad hoc basis only. Monitoring of implementation was also often ad hoc and prompted by foreknowledge of problems. As a former member of the Tim Koordinasi in Gorontalo reported, “if there were problems, we would visit the location to see them for ourselves.”130 Similarly in Buton, kecamatan facilitators reported that “the Tim Koordinasi only conduct monitoring to locations where there are problems.”131 Box: Scattered requests for more socialization and training In over one third of districts visited, the understanding of officials on the Tim Koordinasi about KDP was apparently quite limited, commonly as a result of staff turnover. It is likely that this affected the ability of officials to engage effectively in monitoring. Four or five survey respondents raised this issue, which one Tim Koordinasi Head requesting, “please repeat the socialization of the matching grant program, since many officials and policy makers that were involved in the program have now moved on.” These respondents emphasised the importance of fully understanding the KDP concept and rules in order that they could engage effectively with the program, points that were sometimes made in relation to the KDP operational manual (PTO). Two or three called for, “an explanation of the PTO, in order that the district can deal with the program.” Others identified a need for training. One consultant advised, “don’t just train PjOK, but also members of the Tim Koordinasi. That would help to ensure that the bureaucracy had a shared understanding.” This call was also echoed by a Tim Koordinasi Head in another province, who wrote that, “the Tim Koordinasi should be invited to attend the training of KDP actors.”
There were generally no clear performance indicators and there was little sense of what findings could help to achieve. It was rare that members of the Tim Koordinasi had specific aims or outputs in mind beyond perhaps a diffuse desire to identify and alleviate problems. When asked to what indicators would be used to judge the program, they would usually reply only in the most general terms, mentioning participation, community ownership, repayments, quality of infrastructure, or just the fact that budget had been realized. Only in one district (Sumenep) had officials formulated specific performance indicators and operationalised these in questionnaires that were used during field visits. These questionnaires, for villagers, covered topics such as facilitation, socialization and problems with implementation. There were also formats that Tim Koordinasi members filled out, in which they included recommendations for implementation of the program in the future. It is not likely to be coincidence that the head of this district was said to take a special interest in KDP and required regular reports on its progress.
130 131
Muktar, ex-Secretary TKPPK, Gorontalo FK, Buton
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2. Monitoring by legislators A. Routine monitoring by legislators Where they did monitor KDP, legislators tended to pursue their own agenda rather than collaborate with consultants or officials. The survey showed that legislators in 70 percent of districts never conducted field visits with consultants. Where they did, it was not often; in only two percent of districts did members of the DPRD accompany consultants on field visits than twice in one year.132 While DPRD members in two locations reported that they worked together with the executive on monitoring and coordination, this was quite unusual. Monitoring by legislators consisted of ‘formal’ monitoring, as part of routine activities, or ‘informal’ monitoring, in areas where they lived. In perhaps half of locations, legislators reported that they would monitor as part of routine commission activities (particularly Komisi D, the development commission). As one DPRD member in Rokan Hulu reported, “the DPRD has its own system for monitoring projects, and sometimes we also visit KDP locations as part of this.”133 Legislators also carried out ‘informal’ monitoring. In such cases, they were said to be aware of KDP by virtue of their place of abode. It was not uncommon to hear, as in Solok, that, “the DPRD understand a lot about the program, because we have members that come from kecamatan which received the matching grant, so they also understand the process.”134 Box: Involvement and exclusion of legislators Where DPRD members were actively involved and knowledgeable about KDP, they were said to have good relationships with officials and consultants. According to one DPRD member in Lumajang, “the legislative and executive works together regularly for program monitoring. We have a mutual understanding with the executive, and openness and give and take with each other.” Meanwhile, in Boyolali, one Bappeda member noted that officials had involved legislators in planning and consulted with them on the choice of locations. The DPRD Chairman also emphasised the importance of joint monitoring and the need for legislators to, “understand the objective of such programs for our community.” The consultant here also promoted legislators’ involvement and was keen to encourage legislators to visit KDP sub-district meetings. By contrast, legislators in two or three districts expressed interest in getting more involved in KDP, but complained that they were excluded. According to the chairman and members of the development commission in Lampung Timur, for example, officials had rejected their request to conduct joint monitoring because there was, “no rule” about this in KDP guidelines. They also had little contact with consultants and poor access to information about the program. As one noted, “I live right beside the UPK but I have no idea what it does.” Similarly, one legislator in Rokan Hulu complained of the ‘arrogance’ of officials, who he felt had deliberately excluded the DPRD. As he complained, “I, as a member of DPRD, have never been invited into any KDP forum at village or kecamatan level, even though I think it is very important for us to go.”
The effectiveness of these activities was open to question, since legislators generally had limited understanding of KDP. As noted elsewhere, this was typically put down to their lack of interest in getting involved. As one PMD Head put it, “lack of information among members of the DPRD … is not only caused by socialization. The goodwill of members of the DPRD is another aspect of it.”135 However, this did not always hold true. In at least one third of locations visited, members of the legislature expressed their interest in learning more or in getting more involved in monitoring
132
. Di lokasi matching grant 72,9% anggota DPRD belum pernah melakukan monitoring, 25,4% melakukan kunjungan 1-2 kali dalam 1 tahun, dan 1,7% melakukan kunjungan 3-10 kali dalam 1 tahun. Di lokasi non-matching grant 70% anggota DPRD belum pernah melakukan monitoring dan 30% melakukan 1-2 kali monitoring dalam 1 tahun. 133 (DPRD Member, Rokan Hulu); also Solok 134 Anggota DPRD, Solok; also in Ponorogo 135 (Kepala PMD, Rokan Hulu)
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and coordination.136 Whether they did so appeared to be within the gift of consultants and members of the executive, who were in a position to provide information and explanations about the program, but who did not always appear enthusiastic to encourage legislators’ involvement. B. The accountability report Local legislators’ involvement in monitoring funds and implementation was most intensive in connection with the the Bupati’s accountability report. This annual event is the main formal occasion on which legislators scrutinize the use of the previous years’ budget. It involves on-theground monitoring. Almost without exception, DPRD members would report that their next step, following the delivery of the report would be to “go to the field” to see programs for themselves. Box: Lack of performance measures: expectations and accountability Under the new ‘performance based’ system, introduced in 2002, members of the executing agency (PMD) must draw up criteria by which the success of the program would be judged. However, the performance measures that were used by the PMD in formal budget documents (DASK) related to the program were quite unspecific. Despite the fact that this document specifies input, outcome, output, benefit and impact, documents viewed by researchers did not specify measurable targets that could be used during or after implementation of the program. The lack of measurable targets by which officials and legislators would view the matching grant program could be seen in the DASK from Pasaman, Magelang, Rokan Hulu, Kota Bengkulu, the most detailed of which is included below. Indicator Input: Output: Result: Benefit: Impact:
Performance measures Funds Implementation of KDP Supporting Secretariat for KDP Creating community prosperity Higher level of community involvement in development
Performance target Rp. 1,520,000,000 7,749 households 90%
Researchers were usually unable to find any more detailed or developed documents related to the way that officials would judge the success of the program. There was not normally much attempt to move beyond these, and there was apparently little incentive to do so, unless legislators were to have demanded this of the executive, which they were never found to do. Only in very few districts, such as Sumenep and Sijunjung, did more senior members of the executive made such demands of the Tim Koordinasi of their own accord, based on their interest in the program.
There is no evidence that this process resulted in meaningful debate or examination of KDP. The only issue that ever arose was the simple one of whether funds had been disbursed and works completed.137 Indeed, in over one third of districts, DPRD members had (unfairly) criticised officials for failure to disburse KDP funds. In others, it was just not discussed; on the same day that they voted to accept the Bupati’s speech, members of the development commission in Lampung Timur professed almost total ignorance of KDP and the matching grant program. As discussed above, it is likely that limited understanding of KDP on the part of legislators would make it difficult for them to come to an objective evaluation of its results. But, it is anyway unlikely that the accountability process is conducive to objective evaluations of performance. While members of the executive appear to take their role in preparing for this process quite seriously, the only sanction open to the legislature is removal of the district head. In cases where happens, it is likely that this was a political, rather than a purely performance related issue. 136
These included Lampung Timur, Magelang, Boyolali, Rokan Hulu, and Lumajang Compare ongoing WB research in Lebak; “during budget review especially when reviewing Bupati annual report, questions raised by DPRD members were around whether the intended target and activities specified in RASK and DASK had been achieved. There were no questions on impact or benefit that occurred because of target achievement.” 137
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ANNEX I: RESEARCH SITES AND SURVEY RETURNS 1. Field research locations The following table shows the 17 main sites for field research, together with information used in the selection of sites. This included the amount allocated to the matching grant program and the number of years that the district had participated in KDP. Province
West Sumatra
Sumatra Riau
Lampung
Central Java
Java East Java
Sulawesi
Sulawesi Tenggara
District
No. MG Kec.
1st yr MG allocation (Rp)
KDP1 (no. years)
Pasaman
2
1,500,000,000
3
Sijunjung
1
500,000,000
0
Solok
2
1,450,000,000
3
Pesisir Selatan
0
0
3
Rokan Hulu
2
1,000,000,000
3
Kampar
0
0
3
Lampung Timur
2
800,000,000
3
Lampung Tengah
0
0
3
Boyolali
3
2,750,000,000
3
Grobogan
2
1,500,000,000
3
Magelang
1
750,000,000
0
Blitar
2
1,000,000,000
1
Lumajang
2
1,000,000,000
3
Ponorogo
1
500,000,000
3
Sumenep
2
1,500,000,000
3
Buton
4
2,000,000,000
2
Kendari
3
1,500,000,000
0
2. Survey returns Surveys were sent to almost all of the 79 matching grant locations (barring locations used for testing) and to 16 of the non-matching grant locations participating in the first year of KDP2. The following table shows survey returns broken down by respondent and district type. Matching grant districts
Non-Matching grant districts
No. of surveys
Percentage of MG districts
No. of surveys
Percentage of NonMG districts
KMKab
63
80%
10
9%
Ketua Tim Koordinasi
56
71%
10
9%
Kepala Bappeda
48
61%
10
9%
Respondent type
The following is a run-down of the salient features of each respondent group: •
District consultant survey. In deciding which of the two district consultants should complete the survey, consultants were advised to select the one who most often coordinated with officials, or who had been in the district longest (the two are not necessarily unrelated). Returns were split roughly half-half between those from ‘Empowerment’ and ‘Technical’ 54
consultants. This tend to confirm the suspicion that job titles often have little to do with which consultant takes the lead in coordinating with officials. •
Tim Koordinasi survey. Of respondents to the survey for Tim Koordinasi heads, 77 percent were heads of local empowerment agencies, and the remainder tended to be PMD staff.138 It is worth noting that in at least eleven percent of cases, respondents were only members, rather than head, of the Tim Koordinasi. However, this is not thought to have had a serious impact on the validity of analysis, since respondents were still members of the Tim Koordinasi and of the agency charged with leading coordination of the project.
•
Bappeda survey. Although 73 percent of surveys intended for Bappeda heads were filled out by this figure, staff members from the agency comprised 27 percent of respondents. Again, although analysis should be read with this in mind, this is not anticipated to have a particularly detrimental impact on the validity of the analysis, which should still provide a guide to attitudes to KDP and the matching grant program from within the institution.
138
In two or three cases, members of Bappeda filled out this survey. This was because, occasionally, Bappeda had not yet relinquished the chairmanship of the Tim Koordinasi to PMD.
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ANNEX II: BACKGROUND INFORMATION ON KDP2 DISTRICTS 1. Previous participation in KDP Among the districts that participated in first year of KDP2 in 2003, 119 had already participated in the first phase of the program, the vast majority of these for three years. The remaining 79 were participating in the program for the first time. Take up of the matching grant program was slightly greater among the former group of districts, but not by a great deal. While 36 percent of districts that had never participated in KDP1 provided matching grant funds, only 45 percent of those that had received the program before did so. KDP1 Districts
Non-KDP1 Districts
Non-MG
66
45
MG
53
26
45%
36%
%age fund MG program
On average, allocations to KDP amounted to just over Rp. 1 billion for each district participating in the matching grant program. The size of contributions to the program was similar between districts that did and did not participate in KDP1. Districts that had already participated in KDP contributed an average of Rp. 1.1 billion each, while those that had not made contributions worth an average of Rp. 1 billion per district. 2. Local government budget information In the face of claims that limited budget could be a decisive factor in determining sign-up and size of contributions to the matching grant program, it was thought desirable to look at the link between district fiscal capacity and allocations to KDP. Analysis focused on whether take-up of or amounts allocated to the matching grant program was linked to the relative wealth of a district. Using data on 2002 development expenditures as a crude measure of local government capacity to allocate funds to KDP for the following year, a comparison of KDP2 matching grant and nonmatching grant districts shows up no significant difference between these two groups.139 This can be seen in the enclosed chart, which plots realized development expenditures against the number of districts that fell into any expenditure category. It is clear from this that there was no significant trend for matching grant districts to have more funds to spend on development than
139
Analysis is based on 2002 realized development expenditures for 173 of the 190 districts that participated in KDP2 in 2003. This is based on the assumption that, since participation in the program would have been largely determined in advance of knowledge of 2003 revenues, 2002 budget information is likely to provide a more reliable guide to district budget constraints as they would have looked at the time. The focus is on development expenditures; local government expenditures are divided into two broad categories: routine and development spending. Routine expenditures, on staffing and operational costs, accounted for an average of 66% of district expenditures in 2002. Development expenditures account for the rest of district government spending, and include spending on areas such as Trade and Transport, Regional Development, State Apparatus, Education, Agriculture and Health. Since routine expenditures appear to represent a relatively fixed cost for local governments in the early years of decentralization, this analysis uses only realized development expenditures, calculated as realized 2002 expenditures minus routine expenditures for that year. (These staffing and operational costs rocketed in 2001 following the ‘decentralization’ of 2.1 million civil servants to the regions. The transfer, which was accompanied by an increase in the DAU allocation is said to have been accompanied by an implicit agreement not to retrench. (Hofman, Decentralizing Indonesia, 2002, pp iv & 98))
56
non-matching grant districts.140 This can also be seen from the very small difference between the median figures for development expenditures in districts that provided matching grant funds (Rp. 70 billion) compared to those that did not (Rp. 69 billion). Indeed, the only very significant difference between the two groups can be seen in districts with development expenditures of less than 40 billion, the majority of which did not join the matching grant program. This suggests that, while the amount that a district spent on development generally bore little relation to whether or not it contributed funds, budget limitations may have been a more decisive issue for the handful of (relatively poor) districts at the bottom end of the scale. 141
The amount allocated to the program among those that did contribute also seemed to bear little relation to ability to pay. This can be seen in the chart below, which sets contributions to the matching grant program against the amount that the district spent on development in the previous year. As is fairly clear from the (black) trend line included, there was little trend for the amount contributed to the program to increase in line with the amount that a district had to spend.
140
Here, there is no attempt to adjust for population size, or other characteristics that might affect ‘fiscal capacity’. However, it is worth noting that, of these, compensating for population size also showed up no significant difference between matching grant districts and those that did not fund the program. 141 The analysis also looked at 2002 revenues. This did show that matching grant districts were a little more likely to be better off. While 50% of matching grant districts had potential development expenditures (calculated as untied income, including carryovers, minus routine expenditures) of over Rp. 100 billion in 2002, this was true of only 38% of nonmatching grant districts. Conversely, 50% of districts that did not contribute funds to KDP had potential development expenditures of less than Rp. 90 billion, compared to only 36% of matching grant districts.
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ANNEX III: SURVEY RESULTS 1A. Ratings of KDP performance As part of the survey of Bappeda and Tim Koordinasi Heads in matching grant and non-matching grant districts, officials were asked to rate the performance of KDP according to twelve criteria. These comprised: 1. Poverty alleviation 2. Increasing civic skills of community 3. Increasing technical skills of community 4. Capacity of KDP consultants 5. Transparency/ reducing corruption 6. Efficiency of project (cost economy) 7. Efficiency of time in implementation 8. Meeting implementation targets 9. Satisfactoriness of project output 10. Level of community contributions 11. Satisfaction of community with project 12. Reports and availability of data
Ratings were recorded on five-point scale, on which 1=very poor, 3=satisfactory, and 5=very good. Over 90 percent of Bappeda and Tim Koordinasi Heads rated KDP performance ‘satisfactory’, ‘good’ or ‘very good’ for each factor, except for ‘time efficiency’. There were no very significant or systematic differences between the average ratings accorded to these aspects of the program from officials in matching grant and non-matching grant districts.142
142
The chart illustrates the average rating for each factor, aggregated from responses by Tim Koordinasi and Bappeda heads. Comparison of responses from these two respondent types did not show up significant differences between the two.
58
Over 90 percent of Tim Koordinasi and Bappeda heads surveyed rated every aspect of KDP performance as ‘satisfactory’, ‘good’ or ‘very good’. The only exception was ‘time efficiency during implementation’. Typically 10-20 percent of these respondents rated this aspect of the program as ‘poor’ or ‘very poor’. However, there was a great deal of variation in which aspects of the program were judged to be ‘good’ or ‘very good’. The table below displays results aggregated from Tim Koordinasi and Bappeda Heads in matching grant and non-matching grant districts.143 Consistently/ generally above average
Consistently/ generally below average
Aspect of program
Aspect of program
Good/ V.Good
Good/ V.Good
Transparency/ less corruption
86%
Efficiency of time
18%
Capacity of consultants*
84%
Increasing civic skills
36%
Efficiency of project (cost)
80%
Meeting implementation targets
41%
Reports and availability of data
77%
Level of community contributions*
48%
Satisfactoriness of outputs
73%
Satisfaction of community*
65%
Increasing technical skills*
60%
Poverty alleviation*
53%
1B. Priorities of local officials From the twelve aspects of the program listed above, survey respondents were also asked to list in order of priority, the three aspects of the program that they deemed to be the most important. Analysis was conducted using a scoring system, in which aspects of the program ranked first priority were allocated three points, those ranked second received two points, and so on. The following table, aggregated from the scores by Tim Koordinasi and Bappeda Heads shows that the priority accorded to different aspects of KDP followed more or less the same pattern in matching grant and non-matching grant districts.
143
Analysis also looked at the average score received by each factor in relation to the group average. Average scores for seven were found to fall consistently above or below the overall average for responses from Bappeda and Tim Koordinasi Heads in matching grant and non-matching grant districts. Average scores for the other five were generally above/ below the group average for three out of the four possible respondent types. These are marked with [*]. By this measure, the attitudes of decision-makers were found to be quite consistent between respondent and district type.
59
Poverty alleviation ranked as by far the most important of KDP, followed by increasing the technical skills of communities and transparency in second and third place. Fourth and fifth place went to community contributions and increasing civic skills, although the latter tended to rate more highly for Tim Koordinasi heads and the former for Bappeda Heads. The following table illustrates the rank order of priorities.144 1. Poverty alleviation 2. Transparency/ reducing corruption 3. Increasing tech. skills of community 4. Level of community contributions 5. Increasing civic skills of community 6. Satisfactoriness of project outputs 7. Satisfaction of community with project 8. Efficiency of project (cost economy) 9. Capacity of KDP consultants 10. Reports and availability of data 11. Meeting implementation targets 12. Efficiency of time in implementation
1C. Summary: importance and performance The following table illustrates the top five most important aspects of the program for Bappeda and Tim Koordinasi Heads, together with the ratings accorded to them. Percentage of respondents Top five most important aspects Ave/Good/V.Good
Good/V.Good
Very Good
1. Poverty alleviation
100%
53%
24%
2. Transparency/ reducing corruption
99%
86%
40%
3. Increasing technical skills of community
99%
60%
26%
4. Level of community contributions
98%
48%
16%
5. Increasing civic skills of community
100%
36%
14%
144
Where there were slight differences in the rank order, as described, the table reflects results from matching grant districts. The larger respondent group on which these results are based makes this the more reliable data set. This was also reflected in greater consistency between responses from Tim Koordinasi and Bappeda Heads from matching grant districts, another sign of the reliability of this data.
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2. Take-up of KDP principles and procedures As part of the survey, Tim Koordinasi and Bappeda Heads in both matching grant and nonmatching grant districts were asked whether any aspect of KDP had already been used in programs that were funded by the district, and, if so, which aspects. The aspects of the program listed in the survey comprised: 1. Project targets marginal groups (women and poor) 2. Independent facilitators are recruited (from private firm/ NGO) 3. Community members are asked to develop project proposals themselves 4. No limitation on the type of activities that can receive funding (“open menu”) 5. Community members determine the level of priority of proposals 6. Community members decide on fund allocations 7. Community selects the implementation team (no contractors) 8. Community members manage implementation themselves, including fund 9. Funds are disbursed direct to community accounts
Over 70 percent of Tim Koordinasi and Bappeda Heads from both matching grant and nonmatching grant districts answered the first part of this question in the affirmative. The table below summarizes the percentage of Tim Koordinasi and Bappeda Heads who reported that their district had taken up aspects of KDP in matching grant and non-matching grant districts. MG Districts
Non-MG Districts
Bappeda Heads
80%
100%
Tim Koordinasi Heads
70%
80%
As can be seen from this table, a higher proportion of respondents from non-matching grant districts reported the take-up of aspects of KDP in district-funded programs than did those from matching grant locations. One simple reason for this might be the larger margin for error among the relatively small sample of respondents from the non-matching grant group. Whatever the explanation, however, at a minimum, what is clear from these figures is that the survey provides no more evidence for spill-over effects in matching grant than in non-matching grant locations.145 Of those respondents who reported that their district had used elements of KDP in their own programs, there was a striking similarity between responses for which aspects of the program
145
It was also striking that a significantly higher proportion of Bappeda than Tim Koordinasi Heads in matching grant and non-matching grant locations reported that their district had already taken up aspects of KDP in a district-funded program. Indeed, analysis of whether Tim Koordinasi and Bappeda Heads in any given district tended to return the same answer showed that this occurred only about 70 percent of the time. There are two or three possible explanations. It is possible that Bappeda Heads knew more about district programs than the PMD Heads and staff who usually answered the Ketua TKPPK survey, and were therefore more likely to answer in the affirmative. There might also have been some room for subjectivity to influence responses; there might, for example, be room for interpretation in deciding whether district-funded programs really met the listed criteria. It is also possible that some respondents took a normative reading of the question as being about whether they would be prepared to, or would support, the adoption of certain aspects of KDP. This gives rise to methodological concerns about how answers to this question can be interpreted. However, even if they only tell us as much about the attitudes of respondents as they might do about the reality of development programming in their respective districts, these responses are still thought to provide a useful guide to the likely-hood of take-up of the elements of the program listed. The issue should, however, be kept in mind before making any strong claims based on this data.
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they would use. For the sake of simplicity, therefore, the following chart is based on aggregated responses from all both respondent types in matching grant and non-matching grant districts.
The following table summarises responses: Likely to be taken up (over 50%) Aspect of program
Unlikely to be taken up (under 50%) % take up
Aspect of program
% take up
Community develop proposals themselves
88%
No limitation on activities (“open menu”)
28%
Community prioritize proposals
76%
Community members decide fund allocations
36%
Project targets marginal groups
68%
Independent facilitators (private firm/ NGO)
36%
Community manage impl. incl. funds
67%
Funds disbursed direct to community
66%
Community select impl. team (no contractor)
54%
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