Aid in Action

Budget Transparency: Local governments hold public consultations

USAID supports budget transparency initiatives that local partners spearhead. These initiatives involve public participation at all stages.

 | Wednesday, January 02, 2008

Each of the 465 districts and cities in Indonesia is required to prepare an annual local budget (APBD) to manage the funds allocated annually from the central government.  This estimation of the coming year’s revenue and expenditures is drafted by the district head or mayor and then approved by a local council.  USAID’s Local Governance Support Program (LGSP) has ensured that locally-elected officials in 37 districts can put together a well-formulated budget that can withstand public scrutiny.  

“This initiative is extraordinary and deserves appreciation, because with this transparent process the public now knows the government’s plans for the development of our town,” said Firdause Marwadi, an activist from Saruan Public Forum in Padang Panjang.

Ongoing national reforms have decentralized government funds. Previously, the public never knew what was in the annual district budget or how that budget had been put together.  They could not access information about what kinds of development programs the government was planning, nor how much money had been allocated for roads, schools, business development or other public services.

USAID-LGSP has been promoting budget transparency initiatives with local partners in over 60 districts across Indonesia. LGSP introduces local council members to a process for drafting a well-formulated budget transparently and with public participation.  For the first time, local governments gather community input through public consultations. Civil society organizations, already trained by LGSP to understand their role in budget review and oversight, submit their input on which programs need to be prioritized. At the same time, LGSP guides local governments on publicizing the final approved budget so an informed public can monitor implementation.

Local councils and elected mayors and district heads have taken advantage of the opportunity to give their governing efforts a new and democratic face.  For the first time, local councils in three districts in Aceh province -- Aceh Berat, Aceh Jaya, and Nagan Raya -- publicized the schedule for upcoming budget planning in local newspapers . In the district of Probolinggo in East Java, the district head took the initiative to publish the details of the budget negotiations with the local council. Elsewhere, in the city of Banda Aceh and the smaller city of Padang Panjang in West Sumatra, after publishing the approved APBD in the local press, the government also distributed a thousand posters of the full APBD, which were displayed throughout the district. Local residents are now easily informed about the details of local development activities, the allocated budget and the names and contact information for the officials responsible. “This is a breakthrough for our city, and I will keep on doing this in the future,” said Padang Panjang Mayor Syuir Syam.

Some local governments that work with USAID’s LGSP have taken transparency a step further. The local council in Boyolali enacted legislation establishing standard practices for accountability and transparency.  “Based on this regulation, the local government is now required to publicize all development activities funded by the local budget. The public has the right to question these plans and public agencies must respond to all complaints within 15 days,” said representative Jamal Yazid, head of the council commission that drew up the bill.