DSF Quarterly Report September 2009

September 2009

DSF Quarterly Report

i

DSF QUARTERLY REPORT SEPTEMBER 2009

September 2009


i

Table of Contents

Table of Contents

Introduction ..................................................................................................................................... 1

Governance and Development Context .......................................................................................... 1

Parliamentary elections. .............................................................................................................. 1

Economic development. .............................................................................................................. 1

Work Programming and Reporting ................................................................................................. 2

Activity concept notes................................................................................................................. 2

Development of additional activities. ......................................................................................... 4

Log-frame. .................................................................................................................................. 4

Geographical Distribution of DSF Activities ................................................................................. 4

DSF Engagement with Local Government ..................................................................................... 6

Existing and Forthcoming Activities .............................................................................................. 6

DSF Executive ................................................................................................................................ 7

Engagement with government. ................................................................................................... 7

Engagement with donors............................................................................................................. 7

Staffing – professional staff appointments. ................................................................................ 8

Staffing – professional staff recruitment..................................................................................... 8

Staffing – support staff................................................................................................................ 8

SOFEI disengagement. ............................................................................................................... 8

Risks ................................................................................................................................................ 8

Annex A: Activity Progress against DSF Log-Frame .................................................................... 9

Annex B: Financial Report ........................................................................................................... 27

Annex C: List of Acronyms .......................................................................................................... 34


1

September 2009

Decentralization Support Facility

Quarterly Report (For the quarter ending 30 September 2009)

Introduction

1. In accordance with the DSF Operations Manual, this report is submitted within 30

days following the end of the third quarter of 2009.

2. Based on the log-frame developed for the DSF Annual Report 2009, the report

discusses the progress of existing DSF-financed activities to 30 September 2009 and

outlines progress made with the design and execution of activities under the approved DSF

Work Plan 2009-2011 (see Annex A and Table 1). It also up-dates the governance and

development context and aspects of the management and functioning of the DSF Executive;

describes the geographical distribution of DSF activities; and notes possible developments

concerning local government engagement.

3. A financial report is set out in Annex B.

Governance and Development Context

4. Important and far-reaching political and economic events have taken place during the

last quarter. Indonesia has conducted open and fair parliamentary and presidential elections;

the global economic outlook has improved; and Indonesia‟s economy and financial

institutions have continued to exhibit remarkable resilience and stability during a period of

global economic turmoil.

5. Parliamentary elections.1 Notable aspects of these elections include:

a. For the first time, an incumbent party has won a post-Suharto election.

b. Parties with neo-authoritarian platforms did not do well.

c. The elected parliament is probably Indonesia‟s youngest and most gender-

balanced ever.

d. The party system has undergone a healthy process of consolidation.

e. While satisfactory, the quality of electoral management is generally regarded

not to have been as strong as in previous post-Suharto elections. Mietzner

(2009) suggests that „the elections were a test case for Indonesia‟s ability to hold

high-quality elections as a routine procedure rather than as a climax of historic

political change‟.

f. Voter turnout was lower (down from 84% to 71%) than in previous post-

Suharto elections, but by most standards still high.

6. Economic development.2 The latest data suggest that Indonesia‟s economic

recovery is robust and has gathered momentum since the beginning of the calendar year

2009. Important indicators include:

1 Source: Mietzner, M. ‘Inside Indonesia: July-September, 2009’. 2 Source: ‘Indonesia Economic Quarterly: Clearing Skies’. World Bank, Jakarta, September 2009.


2

September 2009

a. Quarterly growth has accelerated from the beginning of 2009, reaching 4% in

the second quarter. The trend of gradual recovery is projected to continue into

2011.

b. Domestic consumption has remained strong and consumer confidence is at an

all time high, and rising.

c. Investors remain cautious, although building construction is buoyant.

d. The banking sector is healthy – non-performing loans and interest rates are

stable.

e. Financial markets continue to strengthen.

f. The overall balance of payments shows a small surplus.

g. Inflation has fallen at a faster rate than is the case for most of Indonesia‟s

trading partners, but - at 3.8% - the „poverty basket‟ inflation rate is still

relatively high.

h. Employment has grown at a faster rate than the working age population.

However, most new jobs are in the informal sector.

i. In 2009, public finances have been more stimulatory than in recent years. To

July 2009, the government budget was in deficit. Normally, during such periods

there are significant surpluses. Revenues were down; more was spent on core

programmes, but significantly less on energy subsidies. Disbursement of the

government‟s stimulus package began to accelerate in July.

j. In 2010, deficits may be smaller than projected, creating space for greater

government spending.

Work Programming and Reporting

7. Activity concept notes (ACN). Following the approval of the DSF Work Plan 2009-

2011, work has proceeded satisfactorily on more detailed design of approved activities.

This work has also entailed determining modes of execution for each activity and the

preparation of procurement and implementation schedules.

8. To 30 September 2009, ten concept notes had been through a thorough process of

development and review and are now in various stages of preparation for execution and

implementation. A further two concept notes were sent out for review on 30 September,

and it is expected that the final two of the first batch will be sent out by around the middle

of October 2009 or as soon thereafter as possible. A summary of progress is provided in

Table 1 below.

Table 1: ACN Status Report

ACN # Name Closing

Date for

Review

Budget

Estimate

(USD)

Trust Fund

Status

Procurement or

ACN Status

1/2009 Capacity Strengthening

Program for DPRD (Local

Government Legislatures)

June 26 500,000 Grant

Funding

Request

(GFR) made

Eligible

expenditures for

Grant Agreement

(GA) finalized;

procurement and

financial

management


3

September 2009

ACN # Name Closing

Date for

Review

Budget

Estimate

(USD)

Trust Fund

Status

Procurement or

ACN Status

assessment of

OTDA/MOHA

completed; Draft

Grant Agreement

(GA) under review

2/2009 Capacity Building for

Regional Development

Policy Formulation

June 26 142,500 Active Procurement

underway

3/2009 Socialization and Pilot

Implementation of Joint

Circular Letter (SEB) on

Monitoring of Technical

Implementation and

Evaluation of Use of Special

Allocation Funds (DAK)

June 26 550,000 GFR made Minor revisions to

the ACN are being

made

4/2009 Management Strengthening

and Institution Building for

Local Public Service

Providers (MSIB-LPSP)

June 26 500,000 GFR made Minor revisions to

the ACN are being

made (budget)

5/2009 Institution Building for the

Integration of National-

Regional Development and

Spatial Planning

July 17 483,400 Active Procurement

underway

6/2009 Building Capacity for the

Development of Sub-

National Government

Capital Markets for

Municipal Bonds

August

18

900,000 GFR made Minor revisions to

the ACN are being

made (budget).

Procurement ToR

are being drafted

7/2009 Government Training and

Education Centre

Development: Introducing

Competency Based

Standards for Improved

Public Service Delivery

August

18

797,0003 GFR made Eligible

expenditures

finalized for GA;

procurement and

financial

management

assessment of

Diklat/MOHA

completed; draft

GA under review

8/2009 Institution Building for the

Accelerated Development of

Border Areas

August

21

500,000 Active Procurement

underway

9/2009 Capacity Building through

Decentralization Education

and Training (DET) for

Public Service

Delivery

October

2

796,760 Pending

decision on

mode of

execution

Mode of execution

under discussion

with MoHA

3 In order to finance fully the competency based training work planned under ACN 7/2009, the Foreign Cooperation

Bureau of MoHA (AKLN) has approved from funds earmarked for governance reform in the DSF Work Plan 2009-2011

an additional allocation for Diklat, up to a ceiling of $800,000. AKLN is in the process of sending this recommendation to

the MC co-chair for documentation purposes. The DSF Executive has reviewed the revised budget, currently at $797,000,

and found that it meets the requirements for eligible expenditures.


4

September 2009

ACN # Name Closing

Date for

Review

Budget

Estimate

(USD)

Trust Fund

Status

Procurement or

ACN Status

10/2009 Strengthening Local

Government Natural

Resource Management

Capability

October

14

749,500 Active Procurement about

to commence

11/2009 Formulation of Norms,

Standards, Procedures and

Criteria (NSPK) for Local

Government

Service Delivery

October

14

1,000,000 Pending

decision on

mode of

execution

Mode of execution

under discussion

with MoHA

12/2009 Strengthening Data

Provision to the Regional

Financial Information

System by Sub-National

Governments with Stand-

Alone Electronic Data Bases

October

2

250,000 GFR made Procurement ToR

are being drafted

13/2009 Grand Design of Fiscal

Decentralization

900,000 Pending

completion

of ACN

review

ACN close to

completion

14/2009 Costing and Pilot

Implementation of

Minimum Service Standards

1,200,000 Pending

completion

of ACN

review

ACN under

development

9. Development of additional activities. This work is continuing and will result from

time-to-time in the submission to the Management Committee (MC) of additional activity

proposals that fall within one of the DSF‟s designated four priority areas.

10. An outline of the next batch of activities and brief rationale will be presented to the

MC at its meeting in late October 2009. These activities will then be developed into activity

concept notes and reviewed according to the established pattern.

11. Log-frame. Reporting of DSF-supported activity progress against an expanded log-

frame commenced in the June 2009 Annual Report. This quarterly report and all future

reports will report against that log-frame.

Geographical Distribution of DSF Activities

12. The geographical distribution of DSF activities is set out in Table 2 below. In order

to optimise any benefits for development impact that could accrue from the geographical

concentration of activities, geographical distribution may be employed as one of a number

of criteria in the design of certain DSF activities.


5

September 2009

Table 2: Geographical Distribution of DSF Activities

High Density Provinces (provinces with 4 or more DSF activities)

No. High Density

Provinces DSF Activity Identified Kab./Kota

1 Kepulauan Riau (6) MSS Kab. Bintan

Strengthened capacity of DPRD

Border area development planning Kota Batam, Kab. Natuna,

Kab. Bintan, Kab. Kep.

Anambas

NSPK Kota Batam

DET

Local government borrowing

2 West Kalimantan (5) MSS Kab. Sanggau, Kab./Kota

Pontianak


Border area development planning Kab. Sambas, Kab.

Bengkayang, Kab. Sanggau,

Kab. Sintang, Kab. Kapas Hulu

DET

NSPK Kota Pontianak

3 East Kalimantan (4) DAK

Diklat competency based training

DET

Border area development planning Kab. Kutai Barat, Kab.

Nunukan, Kab. Malinau

4 Maluku (4) Strengthened capacity of DPRD

Border area development planning Kab. Maluku Barat Daya, Kab.

Maluku Tenggara Barat, Kab.

Kep. Aru,

DET

NSPK Kab. Maluku Tengah

5 East Nusa Tenggara

(4)


Border area development planning Kab. Kupang, Kab. Timor

Tengah Utara, Kab. Belu, Kab.

Alor, Kab. Rote Ndao

DET

NSPK Kota Soe

Medium Density Provinces (provinces with 2 DSF activities)

No. Medium Density


1 North Sumatra

(2)

MSS

Border area development planning Kab. Serdang Bedagai

2 Banten (2) MSS Kab./Kota Tanggerang

MSIB-LGSP (AMSD II) Kota Serang, Kab. Lebak, Kota

Cilegon

3 West Java (2) MSIB-LGSP (AMSD II)

Local government borrowing Kota Bandung


6

September 2009

No. Medium Density


4 Yogyakarta (2) MSS Kab. Bantul, Kab. Sleman, Kab.

Gunung Kidul, Kab. Kulon Progo,

Kota Yogyakarta

DAK

5 Bali (2) Strengthened capacity of DPRD

NSPK Kabupaten Badung

6 West Nusa

Tenggara (2)

DAK

Diklat competency based standards

7 Papua (2) Border area development planning Kab. Peg. Bintang, Kota Jayapura,

Kab. Supiori, Kab. Keerom, Kab.

Merauke, Kab. Boven Digoel,

Natural resource management

Low Density Provinces (provinces with only 1 DSF activity)

No. Provinces DSF Activity Identified Kab./Kota

1 NAD (1) Border area development planning Kota Sabang

2 West Sumatra (1) DAK

3 South Sumatra (1) Strengthened capacity of DPRD

4 Riau (1) Border area development planning Kota Dumai, Kab. Bengkalis, Kab.

Rokan Hilir, Kab. Indragiri Hilir,

Kab. Kep. Meranti

5 DKI Jakarta (1) Local government borrowing

6 East Java (1) Diklat competency based standards

7 North Sulawesi (1) Border area development planning Kab. Kep. Talaud, Kab. Kep Sangihe

8 South Sulawesi (1) Natural resource management

9 Southeast

Sulawesi (1)

DAK

10 North Maluku (1) Border area development planning Kab. Kep. Morotai

11 West Papua (1) Border area development planning Kab. Raja Ampat

DSF Engagement with Local Government

13. In late October 2009, a paper outlining a number of possibilities for DSF engagement

with local government will be put to the MC for its consideration. Formal authority for

determining the nature of such engagement rests with the DSF Steering Committee (SC). It

is envisaged that the MC will make a recommendation to the SC about this important

matter.

Existing and Forthcoming Activities

14. Annex A provides a summary of progress made to date in relation to existing

activities and activities that are at various stages of development and execution. Activities

are organised according to: (1) Public service delivery; (2) Fiscal decentralisation; (3)

Accountability; (4) Planning and performance measurement; and (5) Development


7

September 2009

effectiveness in Eastern Indonesia. The latter is retained because the period of DSF

funding4 for SOfEI programme activities was extended to 30 September 2009.

15. A financial report is provided separately as Annex B and a summary of the Facility‟s

cash position and of projected cash flow to 2011 is set out in Table 4 of Annex B.

16. On the basis of exchange rates prevailing at 30 September 2009, the total amount

pledged to DSF stands at USD 44.77 million. With investment income, the total amount

available is USD 46.58 million. Of this amount, a total of USD 43.50 million (97% of total

pledged) is committed. Such commitments comprise: (a) formal allocations to 31 projects;

(b) budgeted expenditure on activities under the approved DSF Work Plan 2009 – 2011;

and budgeted expenditure for DSF operations. At the end of the reporting period,

disbursements totalled USD 14.56 million (32.51% of total pledged or 33.13% of

allocations); and the DSF Trust Fund held a total of is USD 14.61 million in cash, including

USD 8 million that is either in the process of being allocated to child TF or earmarked for

such allocation.

17. An additional GBP 360,000 has been formally pledged by DFID for the beginning of

FY2010.

DSF Executive

18. Engagement with government. There has been extensive face-to-face interaction

with government counterparts concerning the design and execution of activities under the

approved DSF Work Plan 2009-2011. Such interaction has taken the following forms:

a. Occasional meetings - called by government – with government members of the

DSF MC.

b. Occasional breakfast meetings with the Chair of the MC and senior

representatives from the other government agencies represented on the MC.

c. Day-to-day interactions with government counterparts responsible for particular

activities.

d. Day-to-day interactions with the government technical team assigned to support

government‟s management of DSF-related work.

e. A day-long workshop with the government technical team held in Bogor in

September.

19. Engagement with donors. There has been a series of meetings between bilateral

donors concerning the programming of their support to decentralisation. The DSF

Executive has been well-represented at all of these meetings and will host the meeting

scheduled to be held in October 2009. A summary of such proposed support, which has

been informed by the DSF strategic framework, may be presented to the next meeting of

the DSF MC, scheduled for late October 2009.

20. There has also been extensive and fruitful exchange between donor members of the

MC, the DSF Executive, and government arising from the review of activity concept notes.

4 Note that the period extension did not entail additional funding over and above the budget allowed for the approved

six months.


8

September 2009

21. Staffing – professional staff appointments. An international short term consultant

with extensive experience of decentralisation in Armenia joined the DSF Executive in July

2009 (Anahit Karapetyan).

22. The incumbent Program Manager has accepted a formal World Bank offer of a two

year extended term consultancy to commence immediately upon his „retirement‟ on 28

February 2010. This will allow him to continue in his current role.

23. In consultation with government, the DSF Executive appointed two national short

term consultants (Jimmy Andrei and Rayi Renggani) as members of the DSF/MC

secretariat. They will work closely with the government technical team that supports all

aspects of government involvement in DSF business.

24. Staffing – professional staff recruitment. Progress with recruitment is set out

below:

a. Senior Economist. The second round of recruitment for this position closed on

22 September 2009. It has yielded a stronger long list of candidates than the first

round. Interviewing of short-listed candidates will commence in October 2009.

b. Senior Governance Adviser (international). Following the departure in

January 2010 of the incumbent (Aruna Bagchee), DfID financial support for this

position will continue. From January 2010, the position will become a DSF

Executive position per se; the position will report to the DSF Program Manager;

and will be subject to Bank terms and conditions of employment. Recruitment

for an international replacement, which will begin in October 2009, will be done

on the basis of an extended term consultancy. The aim will be to have someone

in place by the middle of January 2010.

c. Decentralisation adviser (national). In accordance with the DSF Executive‟s

policy to develop national professionals, an extended term consultant will be

recruited to the professional team. Advertising will commence in October, with

a view to commencement in January 2010. The responsibilities for this position

will include the provision of support to government in relation to activities that

are recipient-executed.

25. Staffing – support staff. The policy of the DSF Executive has been to rationalise

support staffing by allowing natural attrition to take its course (positions made vacant by

three resignations have not been filled); and, at the same time, to improve overall

performance through job redesign, training, and productivity gains. This has been

progressing satisfactorily.

26. SOFEI disengagement. The sustainable disengagement of SOFEI from the DSF

continues to proceed satisfactorily and is reported on separately every two months (the last

report was circulated to MC members in the first week of September 2009).

27. During the reporting period, the period of DSF funding of SOfEI programme

activities was extended to 30 September 2009. In accordance with the decision of the DSF

governance structure, DSF funding for SOfEI staff costs will cease on 31 December 2009.

Risks

28. These remain as set out in the DSF Annual Report 2009.


September 2009

9

Annex A: Activity Progress against DSF Log- Frame*

Objectives Indicators Progress Rate Comment

Insert statements from original

log frame

Insert statements from original

log frame tracking any

modifications

Comment on indicators and milestones outlining key issues faced, and any

reassessment of target/assumptions and risks.

1-5** Indicate actions

proposed or taken to

overcome problems.

Goal

Improved socio-economic

development and reduced

poverty

Indonesia's Human

Development Index (HDI)

Purpose

Equitable, accountable and high

quality public services provided

by national and local

governments

Local governments expenditure

and local governments

performance in basic public

service delivery

Contributions to the development and dissemination of legislation and

procedures governing functional assignments; minimum service standards

(including costing), institution and capacity building of service providers,

and identification and diffusion of good practices.

3

* The log-frame includes new activities and those existing activities which were active in 2008/2009, some of which will continue.

** Objectives likely to be: 1 – fully achieved

2 – largely achieved

3 – partially achieved

4 – achieved to a very limited extent

5 – not achieved at all

X – too early to judge


September 2009

10

Output 1: Public Service Delivery


1.1. Improved definition of service

functions and strengthened

capacity of MoHA and

selected relevant ministries

to formulate and monitor

implementation of norms,

standards, procedures, and

criteria (NSPK) for public

service delivery

Ministerial regulations on

selected NSPK issued for

at least 4 sectors

(Agriculture, Trade,

Mining and Land

Administration) by

December 2010

Consultations held with regions in July 2009 for

formulation of 26 norms, standards, procedures

and criteria (NSPK) in Health. This resulted in

confirmation that up to 10 out of 26 NSPKs can

now be further processed to be formalized by the

Minister of Health.

Assessment of 26 NSPK in Health and

preliminary assessment of NSPK in agriculture,

trade, mining and land administration sector

completed, thereby further clarifying the role and

authority of each level of government (refer to

Government Regulation 38/2007) and providing

technical guidance for implementing service

functions. The report is being processed for

delivery to MoHA and MoF.

ACN No. 11:” Formulation of Norms, Standards,

Procedures and Criteria (NSPK) for Local

Government Service Delivery distributed to MC

members in September 2009. Detailed budget is

being finalized for GOI budget (DIPA)

registration. The project will be jointly executed by

World Bank (WB Executed) and GOI (Recipient

Executed).

3

1.2. Minimum Service Standards

(MSS), in targeted sectors

budgeted, implemented and

monitored in selected district

governments

Adoption and

implementation of MSS in

new sectors in selected

districts

The Manual for MSS Costing (Minister of Health

Decree 317/2009) is being printed for distribution

to all districts/cities by MoHA. Electronic design

system to apply the Manual will be developed.

ACN on Capacity Building for Government and

Regions for MSS Costing and MSS

Implementation is being finalized to be sent to MC

members in October 2009.

3


September 2009

11



1.3. Alternative service delivery

schemes established in

selected sectors and districts

with better access for women

Number of selected district

governments developed

pilot alternative schemes in

service delivery, and

number of women reached

by these pilot schemes

Alternative Mechanisms for Service Delivery

(AMSD): “Management Strengthening and

Institution Building for Local Public Service

Providers” begun in April 2008 expected to be

completed by November 2009. A „blue print‟ for improving public service

delivery using AMSD model completed July 2009. Assessment of legal and regulatory framework

completed and being revised based on comments

from DSF. Plan on pilot of AMSD (3 regions in Banten)

submitted in July 2009.

ACN on: “Management Strengthening and

Institutional Building for Public Service Delivery”

approved. The project will be executed by GOI

and World Bank for part one i.e. pilot preparation

activities. Detailed budget is being finalized for

DIPA registration.

ToR for baseline study on women‟s access to

public services is being formulated.

Presentation to Technical Working Group on

Improvement of Public Services at Workshop on

Regional Cooperation organized by Directorate

General of General Administration in cooperation

with CIDA-GRSII, July 2009.

Regional workshop on AMSD held for pilot

regions: provinces of Banten, Kabupaten Serang,

and Lebak and Kota Cilegon, August 2009.

3

1.4. Improved public service

delivery in selected local

governments in border areas

Action Plans for improved

public service delivery

adopted in selected local

ACN 8/2009 on “Institution Building for the

Accelerated Development of Border Areas”

approved by MC in August 2009. This combines

X Through this activity both MoHA and

Bappenas seek to strengthen cross-ministerial

institutions, such as


September 2009

12



governments in border

regions

activity 1.4 on service delivery and 4.3 on

development planning in border regions to provide

integrated support to these regions by linking

Bappenas, MoHA and the Ministry of

Disadvantaged Regions.

MoHA will execute its part using a combination of

recipient executed and World Bank executed

modes at the early stages of the project. Detailed

budget is being prepared for DIPA registration.

the National Agency for the

Management of Border Regions, which

manage and develop border regions as well as

to improve policy for development of border

regions.

Initial work for Bappenas will be

implemented by a consultant while a qualified

implementing agency is identified to

implement the larger part of the work planned

to commence in January 2010. An additional

implementing agency will be contracted to

undertake services to meet MoHA

requirements.

1.5. Improved understanding of

international best practices,

social political dimensions,

costs and benefits and

alternatives for territorial

reform

Evidenced based research

on territorial reform

excepted by three key

ministries: MoF, Bappenas

and MoHA for policy input

Six analyses completed for Bappenas, MoF,

MoHA, DPD, DPR, and local government, with

information on lessons learned from international,

national, and local experience of territorial reform: Experiences in Territorial Reform:

Implications for Indonesia

Territorial Restructuring: Country Case

Studies; and

Process and Implications of the Social-

Political Dimensions of Territorial Reform:

Case Studies from Sambas and Buton.

Costs and Benefits of Proliferation of

Regions (Pemekaran) analysis completed for

MoF with key findings for fiscal transfer

formulas related to pemekaran, November

2007

Evaluation of the Proliferation of

Adminsitrative Regions in Indonesia 2001-

2007

Territorial Reform and People‟s Welfare:

Finding Alternatives

Consultations and dissemination workshops with

national and local multi-stakeholder forums were

1 A Fiscal Agency Agreement (FAA) with

UNDP for coverage of work under territorial

reform, disaster management, and sub

national data was operational until June 30,

2009. UNDP will submit the final report

covering the entire body of work under the

FAA at the latest by December 30, 2009, at

which time the trust funds related to territorial

reform will be closed.


September 2009

13



held during preparation, finalization, and outreach

for the analyses. Parts of the reports have been

used in presentations and seminars by senior GOI

central and local government officials. The

research also informed policies related to fiscal,

administrative, and social-political aspects of

territorial reform.

1.6. Improved local government

systems for dissemination and

replication of good practices

in service delivery

National policy on good

practices issued

Comparative analysis of ongoing good practice

programs in Indonesia completed in April 2009.

MoHA has held several rounds of consultations on

a draft permendagri (ministerial regulation) on

Best Practices.

The implementation consultants presented a mid-

term report on the project to MoHA in August

2009. In spite of DSF efforts to rectify the situation

it was noted that progress was disappointing. The

consultants had not submitted an Inception Report

in Bahasa Indonesia, nor completed the pilots and

database work as stipulated in the ToR.

A one month no-cost extension was allowed

beyond the project closing date of 30 September

2009, to enable the consultants to meet with GOI

and rectify the lapses.

4 Project implementation was handicapped by

key members of the selected consultancy

team not being available as proposed and

poor compliance to ToRs.

MoHA (Directorate for Capacity Building

and Local Government Performance

Evaluation) has expressed dissatisfaction with

activity performance. Options for resolving

the situation will be assessed in October.

1.7. Local governments implement

effective, efficient and

accountable regulations and

processes for business

licensing

Local government

performance in

implementing OSS for

business licensing

The following outputs were successfully

completed:

National OSS guidelines issued by the Ministry of

Home Affairs in June 2009.

National OSS curriculum developed and used for

OSS training in Bali and North Sulawesi.

Provincial OSS Performance Indices (POPIs)

2 The project is due to close in November 2009,

and is expected to meet its objectives fully.

Project outputs: (i) a national M&E

framework on OSS implementation (ii)

revised OSS guidelines and curriculum and

(iii) revised and updated RIA manual will be

launched at both national level workshop in

Jakarta and two provincial level ones in the

target provinces.


September 2009

14



formulated and implemented in Bali and North.

Sulawesi in April-July 2009.

Baseline survey of district licensing for 2

provinces completed.

Training provided to 2 provincial OSS support

units and 2 districts in each province.

Two provincial workshops on improving

Regulatory Impact Assessment (RIA) manual held

in July-August 2009 with Bappenas, Coordinating

Ministry for the Economy and provincial

governments

of Central Java, Bali and North. Sulawesi.

Development of RIA manual completed (Bahasa

Indonesia version being finalized before

translation into English).

The Development of an M&E framework for OSS

and Introduction of standardized IT program are

currently under development; and training on RIA

is being provided to two targeted provincial

governments.

An extension of the project should be

considered to consolidate the capacity

development efforts made during this phase

and to ensure that they result, by 2011, in a

25% decrease in time required for business

licensing in the 24 target districts.

Output 2: Fiscal Decentralization and Capacity Development


2.1. The Ministry of Finance‟s

Regional Financial

Information System

recording local government

budgets is completed

Number of local government

budgets recorded in the

Ministry of Finance Regional

Financial Information

System

DSF is supporting data entry of MoF‟s regional

financial information system (SIKD) for Fiscal

Year 2007. Support duration: May-August 2009.

Data entered and verified to date:

Budget data (APBD, 2009) - 481 districts (94

2 Data entry will be continued under

ACN12/2009. (See 2.2 below). One

component of the ACN deals with data entry

of SIKD; this sub-activity will meet the

target and milestones of objective 2.1.


September 2009

15



percent of total)

Realization data (LRA, 2007) - 351 districts (75

percent of total).

Two user manuals were prepared: one on data

entry procedures intended for data entry operators

and the other is a guide for users on how to access

the data.

2.2 Strengthened regional

financial information

systems and accessible,

timely and comprehensive

data

MoF Regional Financial

Information System (SIKD)

accurately records local

government budget data

(APBD)

DSF established an effective and efficient

electronic data base and data entry for the financial

year 2006, September 2008.

ACN 12/2009 on „Strengthening Data Provision to

the Regional Financial Information System by

Sub-National Governments with Stand-Alone

Electronic Data Bases‟ reviewed in September

2009.

X

2.3. Improved fiscal

decentralization policy

Implementation of „Grand

Design of Fiscal

Decentralisation‟ across

government ministries and

local governments

Feasibility assessments of possible incentives for

the grants system, including revenue-sharing

intercepts as sanctions for poor performance

completed September 2008.

ACN 13/2009 ACN on “Improving the Policy

Framework for Fiscal Decentralisation (the „Grand

Design of Fiscal Decentralization (GDFD)‟ is

being finalized and discussed with MoF for

submission to DSF MC in October 2009.

X In addition to clarifying and specifying in

more detail the policy framework for fiscal

decentralisation, the ACN will provide

analytical inputs for the revision of Law

33/2004 on fiscal balance between central

government and regional governments.

2.4. National policy on local

government borrowing,

including issuance of

municipal bonds, adopted

A national policy on local

government borrowing,

including issuance of

municipal bonds, adopted

Review of Indonesian Civil Code on issues

relating to debtor and creditor, and

bankruptcy/insolvency completed May 2009.

Analysis and preparatory work for issuance of

Jakarta and Bandung bonds:

3

Directorate of Regional Financing and

Capacity-MoF has submitted request to

expand the scope of activities to the Province

of Kepulauan Riau and Kota Surabaya.

Consultations among members of DSF MC

are underway to accommodate the request.


September 2009

16



Technical support is being supplied to the

governments of DKI Jakarta and Kota

Bandung

Team for preparation of DKI‟ Jakarta

municipal bonds (Tim Persiapan Obligasi

Daerah/ TPOD) established in July 2009. The

team is discussing selection of project(s) to

be financed by the bonds.

ACN 6/2009 on „Building Capacity for the

Development of Sub-National Government Capital

Markets for Municipal Bonds‟ approved in August

2009. Activities proposed in the ACN are intended

to continue current support and will conclude in

November 2009.

2.5. Improved public financial

management by local

governments (On hold)

Public financial analysis

completed by selected local

governments as basis for

local government planning

and budgeting

Empirical analysis of regional government

surpluses based on data from 27 provinces and 220

districts resulting in report with recommendations

completed June 2008. Empirical analysis on regional government

investment in public infrastructure based on

audited financial data for 2004-2007 completed

June 2009.

X

Activity is currently on hold pending further

discussions with GOI.

2.6. Government pro-poor

special allocation fund

monitored and evaluated

Monitoring and evaluation

reports completed on

expenditures of pro-poor

government fund in selected

local governments

ACN 3/2009 on „Socialization and Pilot

Implementation of Joint Circular Letter (SEB) on

Monitoring of Technical Implementation and

Evaluation of Use of Special Allocation Funds

(DAK)‟ approved in July 09.

X Due to internal staff rotation at Bappenas, the

main contact person for this project had been

replaced. This resulted in slight

modifications in the proposed activities

approved by DSF MC. The adjustments were

agreed to by Bappenas in September 2009.

Procurement documents are being prepared.


September 2009

17

Output 3: Increasing Accountability


3.1. Effective legislative

processes, resource

allocation and oversight

functions demonstrated in

selected local legislatures

Number of provincial and

district MPs, including

women MPs, trained in

legislative processes,

budgeting and oversight

ACN 1/2009 on Capacity Strengthening for

DPRD (Local Government Legislatures)

approved by the DSF Management Committee.

Budget negotiations completed with MoHA.

World Bank procurement and financial

management assessments of UPD-MoHA

completed. Draft Grant Agreement prepared and

under review by relevant parties for signature by

World Bank to MoF.

X

3.2. Effective and accountable

public service delivery by

local government officials

and effective monitoring by

CSO leaders demonstrated in

selected local governments

Number of national and local

government officials and

CSO leaders professionally

trained in effective and

accountable public service

delivery

An Activity Concept Note (No. 9/2009) was

prepared ,circulated, and accepted by the DSF

MC with an increased allocation for a total

budget of USD 1.593,520 .The activity covers 3

components which aim to enhance the

professional capacity of local and national

officials to provide and CSOs to monitor

improved public service delivery:

Short courses in country and the region

Study tours

Scholarships for Masters programs in

decentralization related studies in the UK.

X Modes of execution being determined.

3.3. Local training and education

centres demonstrated

improvement in conducting

training programmes for

local government officials

Competency-based training

programmes on decentralized

public service delivery

developed by local

government training centres

ACN 7/2009 “Government Training and

Education Center Development: Introducing

Competency Based Standards for Improved

Public Service Delivery” approved by the DSF

Management Committee. Budget negotiations

completed with MoHA. World Bank procurement

and financial management assessments of Diklat

completed. Draft Grant Agreement prepared and

under review by relevant parties for signature by

World Bank and MoF.

X

3.4. Improved public

accountability of local

governments delivered by

Public accountability

mechanism developed and

implemented by CSOs

The options paper requested by the DSF

Management Committee on local government

engagement is completed and will be discussed at

X In order to meet the objectives stated in 3.4 it

is recommended that an activity addressing

public accountability mechanisms be added


September 2009

18

Output 3: Increasing Accountability


CSOs

the October 2009 DSF Management Committee

meeting. The paper describes three options: 1)

LG by invitation to DSF MC meetings, 2) LG

consultative group reporting to DSF MC, and 3)

permanent representation on DSF MC. It also

includes an annex with geographical distribution

of DSF local government activities.

to the DSF Work Plan 2009-2011.

3.5. Improved knowledge sharing

on support to local

governments

Publicly accessible data base

on support to local

government developed and

number of development

forums and harmonization

activities facilitated

A donor mapping database created and made

available online in English and Bahasa Indonesia

at http://www.dsfindonesia.org/apps/dsf-dm/cgi-

bin/dw.cgi. Presented to (i) Director PK-EKD in

MoHA in August 2008 (ii) the donor community

in the Donor Working Group in March, 2009 (iii)

AKLN in MoHA in May, 2009, and (iv)

Bappenas team from Aid for Development

Effectiveness Secretariat (A4DES) in September

2009. Working Group on CSO Accountability

conducted focus group discussions (FGDs) in

Padang, Palembang, Makassar, and Mataram in

March/April 2009 with 76 participating CSOs on:

public service delivery; CSO-LG relations; and

CSOs management and accountability.

1 This project is complete and has met its

objectives.

The database is well received and

commended as a useful tool for coordination

and monitoring of donor support to

decentralization.

GOI keen to incorporate the tool in

government system for monitoring and

reporting on development assistance in

decentralization. DSF will hire short term

consultant to provide continued support for

updating database content and transferring it

to GOI management.

Output 4: Planning and Performance Measurement


4.1. Spatial and sectoral plans

included in local government

annual, medim- term and

long-term development plans

Annual and medium-term

development plans and

budgets adopted by selected

local governments

Capacity Building for Regional Development

Policy Formulation (Part 1) commenced in

September 2009. Implemented by a team of five

consultants.

Capacity Building for Regional Development

Policy Formulation (Part 2). Draft ToR submitted

X This activity seeks to provide key input into

the formulation of regional development

strategies for each of the seven major island

groups.

Inception report will be submitted in October

http://www.dsfindonesia.org/apps/dsf-dm/cgi-bin/dw.cgi

http://www.dsfindonesia.org/apps/dsf-dm/cgi-bin/dw.cgi


September 2009

19



by Bappenas on 8 October. Draft and proposed

budget ($700,000) under discussion.

Implementation planned for Jan-Dec 2010.

ACN No. 5/2009 Institution Building for the

Integration of National-Regional Development

and Spatial Planning. ACN approved by MC in

July 2009. Consultant identified, contracting

underway. Request for expressions of interest for

implementing agency posted in national

newspaper in October 2009.

2009. Planned completion of activity part 1

by end December 2009.

This activity seeks to contribute to the

capacity of national level agencies to link

planning documents, to improve spatial

planning alignment between levels of

government, and to improve local

governments‟ capacity to produce integrated

planning documents.

4.2. Natural resource planning

management policies

developed by targeted local

governments

Local governments adopting

natural resource planning and

management policy

ACN No. 10/2009 on Strengthening Local

Government Natural Resource Management

Capability - review completed in October.

X This activity seeks to improve the way natural

resources are managed by local governments,

thereby contributing to local economic

development. A ToR is being finalised and a

qualified agency will be contracted through a

competitive tendering process.

4.3. Local government in border

regions improved capacity

and accountability in

development planning

Local governments in border

regions which have

completed and made public

their development work plans

ACN 8/2009 on „Institution Building for the

Accelerated Development of Border Areas‟

approved in August.2009. Request for

expressions of interest for implementing agency

advertised in national newspaper in September.

Selection and contracting of consultant in

October 2009.

This combines activity 1.4 on service delivery

and 4.3 on development planning in border

regions to provide integrated support to these

regions by linking Bappenas, MoHA and the

Ministry of Disadvantaged Regions.

X Through this activity both MoHA and

Bappenas seek to strengthen cross-ministerial

institutions, such as

the National Agency for the

Management of Border Regions, which

manage and develop border regions as well as

to improve policy for development of border

regions.

Initial work for Bappenas will be

implemented by a consultant while a

qualified implementing agency is identified to

implement the larger part of the work planned

to commence in January 2010. An additional

implementing agency will be contracted to

undertake services to meet specific MoHA

requirements.


September 2009

20



4.4. Minimum performance

requirements set by Ministry

of Home Affairs (MOHA)

met by local governments

Number of local governments

achieved minimum

performance requirements set

by MoHA

This activity is currently on hold pending further

internal discussions in MoHA.

X Disagreement on scope of activities (and,

therefore budget) regarding DSF support to

the evaluation of local government

performance.

4.5. Improved accessibility of

data on citizens‟ perceptions

of public service delivery at

local government level as

input for policy

recommendations

Results of citizen satisfaction

surveys publicly available

Governance and Decentralization Survey 2

(GDS2) data available for public use through

www.gds-indonesia.com. User can query

information from the survey interactively; the

query function is available for the 2004 and 2006

rounds of the surveys. The website also contains

information on the survey, including survey

instruments, manuals and notes, as well as data

and selected reports and presentations using the

GDS data.


objectives.

The website will be linked to the DSF

website.

4.6. Improved quality and

availability of sub-national

statistics for local decision

making

Study of sectoral data systems

at central and regional level

with policy recommendations

adopted by BPS (Central

Statistics Agency) and

participating local

governments

„Improving Quality and Availability of Sub-

National Statistics for Local Decision Making &

Streamlining the Flow of Statistics between

Regions and the Center‟ study completed in

support of BPS and local governments, January

2009. National and local level sectoral data systems

analysed for 19 governments (6 provinces, 4 kota,

9 kabupaten), January 2009. Assessment of health data for 11 kabupaten/kota

and assessment of education data for 12

kabupaten/kota completed in January 2009. Final report with 21 policy recommendations

grouped in the categories of:

System Design, Setup and Maintenance;

Promotion of Data Quality; Application of

Information and Communication

Technology;

Human, Physical and Financial Resources;

1

This project is complete and has met its

objectives.

The findings from this project are relevant to

many other DSF projects since these rely on

the availability of quality sub-national

sectoral data. Follow-on to this project could

include extension of the web-based system

for transmitting data from technical agencies

at the sub-national level to relevant ministries

in Jakarta. Capacity building recommended

for local governments in relation to use of

information technology.


September 2009

21



Strengthening of Data Sharing, Analysis,

and Utilization; and

Legislation and Regulation, May 2009.

4.7. Improved local regulatory

frameworks to assist local

government to provide

quality services and ensure

consistency between national

and district level programs

Number of policy notes and

consolidated on line national

data base of local government

regulations

Creation of a national-level working group on

local regulations; chaired by Bappenas

(Directorate of Law and Human Rights) with

participation across departments and from non-

government organizations and donors. A policy

paper on local regulations was produced. Establishment of local working groups and local

regulations information centers in Parepare, East

Lombok, Purbalingga, Sumedang and Solok. Four draft policy notes, two to be published by

December 2009: „Ensuring the Sustainability of

Pro-poor Programs through Local Regulations‟;

„Developing the Role of the DPRD in Supporting

Participative Local Regulations‟. Expansion of perdaonline.org to cover over 3,000

local regulations from over 60 districts. Guidelines for local governments for the drafting

of local regulations.


objectives.

Output 5: Improved Development Effectiveness in Eastern Indonesia


5.1. Increased cooperation and

harmonization among key

development stakeholders

including national and

targeted local governments,

Number of new coordination

networks and harmonization

and sustainability initiatives

Provincial government/donor coordination group

including 5 international development partners

facilitated in South Sulawesi: quarterly meetings;

email discussion list; and 3joint field visits to

date.

2

Significant support provided on request to

international development partners, local

governments and local NGOs. Recent

evaluation indicates most stakeholders

deemed this to be very valuable.


September 2009

22



NGOs. academics, donors,

DSF and private sector

Two planning workshops supported for JiKTI

(Eastern Indonesia research Network) resulting in

agreement on priorities, including researcher

capacity building and directories (see below).

SOfEI facilitated discussions between Eastern

Indonesia Researcher Network (JiKTI) Focal

Point and the AusAID team working on a new

initiative to revitalize Indonesia‟s knowledge

sector. This joint work will strengthen JiKTI‟s

institutional foundations and support research

cooperation in eastern Indonesia.

Infrastructure and support for JiKTI members to

maintain an active mailing list for sharing of

research opportunities, research papers and other

information.

Seven funded research partnerships including on

education, governance, local revenue

mobilization and civil service capacity building

resulting from a joint JiKTI/AIGRP (Australia

Indonesia Governance Research Program)

mentoring workshop. Research will be

completed, published and disseminated by

December 2009. Three directories on research, researchers and

research institutions in eastern Indonesia,

prepared jointly with the Indonesian Institute of

Sciences and widely disseminated to government,

donors and universities to improve access to

research and researchers in eastern Indonesia. Coordination support for education donors in

South Sulawesi to ensure structured and

sustainable foundation through joint activities and

facilitating consistent provincial government

leadership is ongoing. A Quarterly meeting held

The next meeting of the JiKTI Focal Points

will be held in October 2009. The meeting

will identify areas for collaboration between

JiKTI and a new AusAID initiative to

strengthen research quality and develop

evidence-based policy in eastern Indonesia.

SOfEI‟s excellent relationship currency with

high level local government officials in South

Sulawesi, including the Governor, allows it to

encourage and mentor government and its

international partners toward improved

cooperation and harmonization. BaKTI will

promote the approach and lessons learned to

other provincial governments in eastern

Indonesia.


September 2009

23



in September 2009 for provincial

government/education donors in South Sulawesi

agreed on a series of joint activities to be

implemented under provincial government

leadership. SOfEI together with CIDA initiated Governance,

Environment and Gender Working Group

workshops involving CIDA funded project teams

in Sulawesi.

5.2. Improved access to

information, and increased

learning and adoption of

good practices among

development stakeholders in

eastern Indonesia

Library, and Eastern

Indonesia Portal and website

operational and accessible,

distribution of monthly

magazine, and adoption of

good practices handbook by

number of development

stakeholders in eastern

Indonesia

Library access has increased from an average of

150 visitors per month in 2007 to 205 (YTD) in

2009. Visitors to the BaKTI facility in Makassar for

meetings, events, research and access to

computers and internet increased from an average

of 1,000 per month in 2007 to 1,500 per month

during 2009. Website traffic has increased from 3000 unique

monthly visits to 7000 since it was re-launched in

August 2008. Circulation of BaKTI News magazine is 2,500

per month with estimated read on rate of 5

readers per copy. 2009 survey indicates more

than 75 per cent of readers were satisfied with

BaKTI News promotion of good practices and

improved development knowledge. More than 40

per cent of those surveyed had applied ideas from

BaKTI News in their work. Anecdotal and questionnaire responses suggest

that good practices promoted by SOfEI are being

replicated in other regions, e.g. Yayasan Siwa

Lima, Ambon, Maluku Province reported that an

2

Handbook of smart practices is being

developed and will be printed in November

2009. The documentary film on Micro Hydro

in West Sulawesi is underway and will be

completed in December 2009.

An English language website version will be

available in December 2009.

The formal Launch of the Portal is planned

for November 2009.

BaKTINews launched a number for SMS

communication from readers including

comments, complaints and contact data

updating. Response has been positive.


September 2009

24



article in

BaKTI News about cocoa cultivation developed

by IFC PENSA led to a cocoa sustainability

partnership between the two groups. Health

mapping initiatives from Luwu Timur published

in BaKTI News have been replicated in Mamuju

district, West Sulawesi.

The Eastern Indonesia Portal design was

introduced to BaKTI staff. In September 2009. It

has been launched internally and will remain

open to inputs or suggestions until the end of

October 2009.

5.3. Development stakeholders

in eastern Indonesia have

input and influence on

development agendas and

policies

National Medium Term Plan

reflects Eastern Indonesia

development interests and

Local Governments adopt

policies on targeting poverty

programs.

Facilitation of three semi-annual meetings of

Eastern Indonesia Provincial Heads of

BAPPEDA dialogue with BAPPENAS on

National Medium Term Plan, 2010 - 2014.

Priorities identified promoted to National

Development Planning Consultations

(Musrenbangmas). Assistance for DPRD in Central Sulawesi to

ensure effective discussion and timely passage of

the provincial Budget for 2008. A poverty mapping program supported by SOfEI

and UNICEF has been replicated in all sub-

districts in two districts in West Sulawesi and is

planned to be replicated in all districts in West

Sulawesi in 2009. Two Eastern Indonesia Forum regional policy

dialogues held under DSF to discuss and promote

policy priorities for the region.

2 The next Heads of BAPPEDA meeting will

be held in Jayapura in November 2009.

Contacts were made with BAPPENAS

regarding the potential for cooperation on

regional consultations in Sulawesi, Maluku,

Nusa Tenggara and Papua for the next

national medium term development plan

(RPJMN 2010-14).

National media visit will be conducted in

October 2009 to get national exposure of

smart practices and to secure commitment

from National Media to provide special

coverage on development issues in Eastern

Indonesia where BakTI plays an active role as

an information resource.


September 2009

25



The Fourth Eastern Indonesia Forum (EIF) was

conducted in August 2009 with 230 participants

representing Central Government (MoHA,

Bappenas), Local Government (Head of

Bappeda, Bupati/Mayor, Head of SKPD, Sekda,

Academics, Media, Local NGOs, Legislative

members, Private Sector (KADIN), and

International Development Partners. 12 smart

practices from 12 provinces in Eastern Indonesia

were presented and documented. 43

organizations participated in exhibitions. A

special edition of BaKTI News focused on smart

practices and policy discussions during the

Forum. Outputs from Forum (including

documentation on smart practices) circulated to

participants as well as decision-makers in

government and NGOs. Key Issues discussed

include a regional approach with inter-regional

cooperation using an island-based development

approach, social communication, joint social

marketing and joint advocacy for local

innovations (local smart practices) as well as the

importance of data in policy making. Feedback

from Forum participants was very positive. Good

media coverage of the Forum.

One Smart Practice from the Eastern Indonesia

Forum will be presented in a documentary film.


September 2009

26


September 2009


September 2009

27 27

Annex B: Financial Report

I. Donor Contributions

DSF has 9 donor partners, 3 of whom are financial contributors: DFID, AusAID, and

CIDA. Total pledges amount to USD 44.77 million (30 September 2009 exchange rate).

About 96.65% of the total amount (USD 43.27 million) has been pledged by DFID. As of

30 September 2009, DSF had received USD 29 million or 65.78% of total pledges (see

Table 1): USD 27.50 million from DFID, USD 1 million from AusAID, and USD 500K

from CIDA.

An additional GBP 360,000 has been formally pledged by DFID for the beginning of

FY2010

Contributions received from DFID during the quarter amounted to USD 6.70 million.

Table 1: Pledges Received on the Basis of Signed Contribution Agreements

Contributors Contribution

Currency

Contribution

Amount USD equivalent

Cash Received

in USD million

DFID GBP 24.36 43.27 27.50

AusAID USD 1.00 1.00 1.00

CIDA CAD 0.50 0.50 0.50

Total

44.77 29.00

II. Approved Projects and Fund Allocations

The projects and allocations set out in Table 2 were approved by the MC at its meetings of

24 January 2007, 16 February 2007 and 12 February 2009.

Table 2: Approved Projects and Allocation of Funds at 30 September 2009

Budget (USD)

Total Pledges 44,766,214

Investment income (as of September 30, 2009) 1,342,420

Projected Administration fee (1% of total pledges) 447,662

Other Income (as of September 30, 2009) 24,754

Total Available Funds 46,581,050

Summary

Donor Contributions: Three donors have pledged a total of USD 44.77 million

(exchange rate September 30, 2009).

Commitments: USD 43.50 million or 97% of total pledges has been allocated to 31

projects, the approved DSF Work Plan 2009 – 2011, and DSF operations.

Disbursements: USD 14.56 million or 32.51% of total contributions pledged or 33.13%

of allocations.

Remaining Funds: USD 3.08 million in unallocated and uncommitted funds.


September 2009 September 2009


28 28

Budget (USD)

Projects

Focal Area 1 2,968,714

Tax Assignment and Own-source Revenue -

Transfer 350,000

Borrowing 600,000

Surplus and Reserves 275,000

Data for Monitoring and Evaluation 480,000

Assessing and Revising the System for Setting Territorial Boundaries 227,500

Fiscal Agency Intergovernmental Framework Fund[1] 476,214

Exploring Future Reform Options in Functional Assignment 55,000

Supporting the Establishment of Financially Feasible Minimum Service Standards 305,000

Alternative Mechanism of Service Delivery 200,000


Local Government Performance Measurement 187,174

Identification and Replication of Good Practice 478,000

Appraisal : Sub national Investment Climate Reform 600,000

Knowledge Management for Effective Local Government Support Programs 375,500

Mapping and Analysis of Local Planning and Budgeting Processes 49,703

Improved Evidence Base of Good and Bad Local Perda 117,682


National Program for Community Empowerment 1,080,522

CDD Summit 421,705

Policy Development for PNPM 104,275

Cost Accounting Review for CDD Programs 16,512

Technical Assessment for CDD Programs 53,685

Information, Education and Communication for PNPM 485,000

User Fee Assessment for CDD Programs 419,000

MIS Improvement for PNPM 106,000

Short Term Monitoring and Evaluation 713,488

Medium / Long Term Monitoring and Evaluation 399,925

CCT Baseline Survey 1,674,301

Support Office for Eastern Indonesia (SOfEI) 3,310,588

Quick starts 97,908

New projects approved and registered in FY09 1,150,000

Priority Area 4

Institutional Building for the Integration of National Regional Development and Spatial Planning 500,000

Capacity Building for Regional Development Policy Formulation 150,000

Institution Building for the Accelerated Development of Border Areas 500,000


September 2009


September 2009

29 29

Budget (USD)

Approved Work Plan 2009-2011 in process of registration 12,535,265

Priority Area 1 - Public Service 3,200,000

Priority Area 2 - Fiscal Decentralization 2,700,000

Priority Area 3 - Governance Reform 2,096,760

Priority Area 4 - Planning and Performance Measurement 1,750,000

Knowledge Management for Aid Effectiveness 700,000

DSF Executive Operations 1,502,043

Additional donor contribution for DSF Operations 586,462

Approved 2009-2011 allocation to Priority Areas for future activities 8,453,240

Priority Area 1 - Public Service 1,500,000

Priority Area 2 - Fiscal Decentralization 1,800,000

Priority Area 3 - Governance Reform 2,503,240

Priority Area 4 - Planning and Performance Measurement 2,650,000

Project Operations thru September 30, 2009 7,700,000

Staff costs 4,200,000

Operations costs 3,500,000

Total approved budget allocation to projects 43,498,188

Total Unallocated and Uncommitted Funds[2] 3,082,862

[1] This budget is part of the USD 632,500 Fiscal Agency Agreement (FAA) with UNDP. The entire FAA covers 3 work

streams: (i) Natural Disaster Management (USD 200,000); (ii) Pemekaran (USD 227,500); and (iii) Data for Monitoring

and Evaluation (USD 205,000). In September 2008, the FAA was amended, and the budget revised to USD 476,214.

[2] Fund balance for unallocated and uncommitted funds fluctuates according to the prevailing exchange rate and return

on investment.

III. Disbursement Status

To date, DSF has received USD 30.37 million, consisting of USD 29 million of donor

contributions (65% of total pledges) and USD 1.34 million of investment income. As of

September 30, 2009, USD 14.27 million had been disbursed to work streams and

operations. In addition, a total of USD 290K has been spent on administration (see Table

3).

Focal Area 1 (Strengthening Inter-Governmental Framework) has disbursed USD 1.95

million or 66% of the total approved budget of USD 2.97 million. There are signed

commitments of USD 191K.

Focal Area 2 (Support to Sub-National Entities) has disbursed USD 656,000 or 36% of

the total approved budget of USD 1.81 million. Two one-year long projects totalling USD

1.078 million - for Appraisal of Sub-national Investment Climate Reform and Identification

and Replication of Good Practices – operated throughout the reporting period. For both

projects, disbursements are expected to be spread evenly throughout the project year.

The SC meeting held on September 5, 2008 decided to terminate the Local Government

Performance Measurement project. The budget allocation, amounting to about USD 1.2

million, has been returned to unallocated funds.




30 30

Focal Area 3 (Strengthening Accountability, Participation and Civic Engagement) has

disbursed USD 5.33 million or 97.50% of the total approved budget of USD 5.47 million.

Signed commitments of USD 86,000 are expected to be disbursed by year-end.

Table 3: Disbursement Status of the DSF as of September 30, 2009

Budget

(USD)

Actual

(USD)

Commitments

(USD)

Receipts

Paid in Contributions 44,766,214 29,000,052

Investment Income 1,342,420

Other Income

24,754

Total Receipts 44,766,214 30,367,226

Disbursements

Focal Area 1 2,968,714 1,946,310 191,665

Tax Assignment and Own-source Revenue * - - -

Transfer 350,000 90,754 900

Borrowing 600,000 466,671 85,857

Surplus and Reserves 275,000 168,105 15,000

Data for Monitoring and Evaluation 480,000 305,307 478

Assessing and Revising the System for Setting Territorial Boundaries 227,500 227,500 -

Fiscal Agency Intergovernmental Framework Fund 476,214 476,214 -

Exploring Future Reform Options in Functional Assignment 55,000 43,850 7,634

Supporting the Establishment of Financially Feasible Minimum Service

Standards 305,000 47,920 2,029

Alternative Mechanism of Service Delivery 200,000 119,989 79,766

Focal Area 2 1,808,059 656,646 464,384

Local Government Performance Measurement 187,174 187,174 -

Identification and Replication of Good Practice 478,000 143,397 334,593

Appraisal : Sub national Investment Climate Reform 600,000 119,823 129,791

Knowledge Management for Effective Local Government Support

Programs 375,500 38,867 -

Mapping and Analysis of Local Planning and Budgeting Processes 49,703 49,703 -

Improved Evidence Base of Good and Bad Local Perda 117,682 117,682 -

Focal Area 3 5,474,414 5,325,298 85,987

National Program for Community Empowerment 1,080,522 1,072,961 -

CDD Summit 421,705 421,705 -

Policy Development for PNPM 104,275 58,666 -

Cost Accounting Review for CDD Programs 16,512 16,512 -

Technical Assessment for CDD Programs 53,685 53,685 -

Information, Education and Communication for PNPM 485,000 484,739 -

User Fee Assessment for CDD Programs 419,000 343,892 73,468

MIS Improvement for PNPM 106,000 93,161 12,520

Short Term Monitoring and Evaluation 713,488 710,385 -

Medium / Long Term Monitoring and Evaluation 399,926 399,926 -


September 2009


September 2009

31 31

Budget

(USD)

Actual

(USD)

Commitments

(USD)

CCT Baseline Survey 1,674,301 1,669,665 -

Decentralization Support for Eastern Indonesia (SofEI) 3,310,588 2,623,454 204,535

Quick starts 97,908 97,908 -

New projects approved and registered in FY09 1,150,000 - 92,467

Priority Area 4

Institutional Building for the Integration of National Regional

Development and Spatial Planning 500,000 - -

Capacity Building for Regional Development Policy Formulation 150,000 - 92,467

Institution Building for the Accelerated Development of Border Areas 500,000 - -

Approved 2009-2011 workplan in registration process

12,535,265 - -

Priority Area 1 - Public Service

3,200,000 - -

Priority Area 2 - Fiscal Decentralization

2,700,000 - -

Priority Area 3 - Governance Reform

2,096,760 - -

Priority Area 4 - Planning and Performance Measurement

1,750,000 - -

Knowledge Management for Aid Effectiveness 700,000 - -

DSF Executive Operations 1,502,043 - -

Additional donor contribution for DSF Operations 586,462

Approved 2009-2011 allocation to Priority Area for future activities 8,453,240 - -

Priority Area 1 - Public Service 1,500,000 - -

Priority Area 2 - Fiscal Decentralization 1,800,000 - -

Priority Area 3 - Governance Reform 2,503,240 - -

Priority Area 4 - Planning and Performance Measurement 2,650,000 - -

Project Operations 7,700,000 3,617,712 161,684

Staff costs 4,200,000 1,941,159

Operation costs 3,500,000 1,676,553 161,684

Total Project Disbursements 43,498,188 14,267,327

Administration fee 447,662 290,001

Total Disbursements 43,945,850 14,557,328

Outstanding commitments 1,200,723 1,200,723

Total Cash Available (= Funds receipts - Disbursements -

Commitments) 14,609,175

Support Office for Eastern Indonesia (SOfEI) has disbursed USD 2.62 million or 79% of

the total USD 3.31 million approved budget. Signed commitments of USD 205,000 and

USD 490,000 signed consultant contracts are to be disbursed by December 2009.

For DSF operations, USD 3.62 million has been disbursed. This includes office and

project operations as well as staff costs.




32 32

Outstanding commitments: USD 1.20 million plus USD 2.5 million of signed DSF staff

contracts are to be disbursed over the life of the DSF.

Total cash available as of September 30, 2009 is USD 14.61 million, including USD 8

million that is either in the process of being allocated to child TF or earmarked for such

allocation.

Outlook

Table 4 shows expected cash receipts and disbursements for the current and projected

portfolio of projects. The Fund expects to disburse USD 6.75 million to project accounts in

Fiscal Year 2010.

Table 4 is based on total project funds committed, as set out in the current Contribution

Agreement and Administrative Agreement. The current DSF TF closing date is September

30, 2011.

Table 4: Projection of Cash Receipts and Disbursements 2007 – 2011

Actual per

Sept. 30, 2009

(USD million)

Year ended

June 30, 2010

(USD million)

Year ended

June 30, 2011

(USD Million)

Projections

as of

Sept. 30, 2011

(USD million)

Expected Receipts

Projected Cash Remaining from prior

period 0 14.60 17.23 11.94

Paid in Contributions

DFID 27.5 9 8.27 0

AusAID 1 0 0 0

CIDA 0.5 0 0 0

Cash Receipt during current period 29.00 23.6 25.50 11.94

Investment Income 1.34 0.47 0.51 0.24

Other Income 0.03 0 0 0

Expected Cash Available to DSF TF 30.37 24.07 26.01 12.18

Disbursements

Focal Area 1 1.95 1.02 0 0

Focal Area 2 0.66 1.2 0 0

Focal Area 3 5.33 0.14 0 0

Eastern Indonesia projects (SoFEI) 2.62 0.69 0 0

Quick starts 0.1 0 0 0

Project Operations 3.62 2.6 3.7 0.58

Priority Area per FY09

Public Services 0 0 4.2 1.5

Fiscal Decentralization 0 0 2.5 3

Planning and Performance Measurement 0 1.15 1.7 3.7

Governance Reform 0 0 1.89 3.4


September 2009


September 2009

33 33

Actual per

Sept. 30, 2009

(USD million)

Year ended

June 30, 2010

(USD million)

Year ended

June 30, 2011

(USD Million)

Projections

as of

Sept. 30, 2011

(USD million)

Total Project Disbursements (Projections) 14.28 6.75 14.0 12.2

Administration fee 0.29 0.09 0.08 0

Total Disbursements (Projections) 14.57 6.84 14.07 12.2

Outstanding commitments 1.2 0 0 0

Total Cash Available for subsequent

year(s) 14.60 17.23 11.94 0.00




34 34

Annex C: List of Acronyms

ACCESS = Australian Community Development & Civil Society Strengthening Scheme

ADKASI = Asosiasi DPRD Kabupaten Seluruh Indonesia (Association of Indonesian District

DPRD)

ADS = Australian Development Scholarship

AMSD = Alternative Mechanisms of Service Delivery

APBD = Anggaran Pendapatan Belanja Daerah (Province/District Budget)

AusAID = Australian Agency for International Development

BAKTI = Bursa Kawasan Timur Indonesia (East Indonesia Exchange)

BAPPEDA = Badan Perencanaan Pembangunan Daerah (Local Planning & Development Agency)

BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Planning & Development Agency)

BPK = Badan Pengawas Keuangan (Audit Board of the Republic of Indonesia)

BPMD = Badan Pengembangan Masyarakat Desa (Community Empowerment Agency)

CCT = Conditional Cash Transfer

CDD = Community Driven Development

CIDA = Canadian International Development Agency

CIPSED = Canada Indonesia Private Sector Enterprise Development

CSO = Civil Society Organization

DFID = Department for International Development

DG = Director General

DKI = Daerah Khusus Ibukota (Jakarta Special Region)

DSF = Decentralization Support Facility

EIP = East Indonesian Portal

EKPPD = Evaluasi Kinerja Penyelenggaraan Pemerintah Daerah (Local Government Performance

Evaluation)

ETC = Extended Term Consultant

FAA = Fiscal Agency Agreement

GDS2 = Governance and Decentralization Survey 2

GOI = Government of Indonesia

GTZ = Gesellschaft für Technische Zusammenarbeit (German Technical Co-operation)

HIV/AIDS = Human Immunodeficieny Virus/Acquired Immuno Deficiency Syndrome

IDPL = Infrastructure Development Policy Loan

IFC = International Finance Cooperation

ILO = International Labor Organization

IPEA = Initiative for Public Expenditure Analysis

JiKTI = Jaringan Peneliti Kawasan Timur Indonesia (East Indonesia Researcher Network)

KDP = Kecamatan Development Program

KPPOD = Komite Pemantauan Pelaksanaan Otonomi Daerah (Monitoring Committee for Local

Autonomy Implementation)

LGPM = Local Government Performance Measurement

LIPI = Lembaga Ilmu Pengetahuan Indonesia (Indonesian Institute of Science)

M&E = Monitoring & Evaluation

MC = Management Committee

MDG = Millennium Development Goal

MKPP = Matriks Konsolidasi Perencanaan dan Penganggaran (Consolidated Matrix for Planning

and Budgeting)

MOF = Ministry of Finance

MOHA = Ministry of Home Affairs


September 2009


September 2009

35 35

MOU = Memorandum of Understanding

MSS = Minimum Service Standard

NCG = Nordic Consulting Group

NGO = Non-Government Organization

NSPK = Norma, Standar, Prosedur dan Kriteria (Norms Standard Procedures and Criteria)

NTB = Nusa Tenggara Barat (West Nusa Tenggara)

NTT = Nusa Tenggara Timur (East Nusa Tenggara)

OSS = One Stop Shop

PDKBM = Pemutakhiran Data Kemiskinan Berbasis Masyarakat (Community Based Poverty Data

Updating)

PEACH = Public Expenditure Analysis and Capacity Enhancement

PEMDA = Pemerintah Daerah (Local Government)

PMD = Pembangunan Masyarakat Desa (Local Community Development)

PMK = Peraturan Menteri Keuangan (Finance Minister Regulation)

PNPM = Program Nasional Pemberdayaan Masyarakat (National Program for Community

Empowerment)

PSF = PNPM Support Facility

RED = Regional Economic Development

RESPEK = Rencana Strategis Pembaruan Kampung (Strategic Plan for Village Reform)

RTI = Research Triangle Institute

SC = Steering Committee

SOFEI = Support Office For East Indonesia

STC = Short Term Consultant

TA = Technical Assistance

TAF = The Asia Foundation

TF = Trust Fund

UKAW = Universitas Kristen Artha Wacana (Artha Wacana Christian University)

UNDP = United Nations Development Program

UNICEF = United Nations Children's Fund

WB = World Bank

YIPD = Yayasan Inovasi Pemerintah Daerah (Foundation for Local Government Innovation)




36 36

Documents

DSF Quarterly Report September 2009