Joint Ministerial Decree on Accelerating the Disbursement of Village Funds

16 September 2015

The government released a decree signed jointly by three ministers including the Minister of Home Affairs, the Minister of Villages and the Minister of Finance on accelerating the distribution, management and utilization of village funds in 2015. The signing was witnessed by Vice President Jusuf Kalla on September 15, 2015.

In his opening note, the Vice President conveyed his appreciation of the joint decree which aims to simplify how village funds are disbursed and used. “A simple mechanism is needed, but one that complies with the laws and regulations of the three ministries. This joint decree provides the legal framework needed to accelerate fund disbursement to villages,” Kalla said.

In compliance with the joint decree, funds will only be credited to village accounts if the village has prepared a village regulation on budget revenues and expenditures (APBDes). The village regulation and APBDes have also been simplified and the regent through the district head is encouraged to support the village head in preparing the village regulation.

Approximately 80 percent or Rp. 20.7 trillion of village funds have been received by local governments at the district level. These funds are ready for disbursement to village accounts. To facilitate the monitoring of funds, distribution is managed by the Ministry of Finance. In addition, the village head is required to prepare reports on fund utilization.

The joint decree is expected to encourage villages to prioritize the development, rehabilitation and maintenance of village infrastructure including roads, bridges, irrigation systems as well as the development of the local economy. Such initiatives are expected to prioritize the use of materials sourced locally and encourage community participation in village development. The Ministry of Villages will work to improve the numbers and skills of facilitators who can help villages plan, implement and report on fund usage.

Through the use of these funds earmarked for villages, the government hopes to improve the economy, infrastructure and cooperation at the village level. For more information on the joint decree, please click here.