Act No. 25 Of 1999

Original Language Title: Undang-Undang Nomor 25 Tahun 1999

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Read the untranslated law here: http://peraturan.go.id/inc/view/11e44c4edd60efd0b1db313231373133.html

The ACT of 25 May 1999 of the text copy _?.
Back COUNTRY SHEET Republic of INDONESIA No. 72, 1999. (Additional explanation in the State Gazette of the Republic of Indonesia Number 3848)
Law of the Republic of INDONESIA number 25 in 1999 ABOUT the FINANCIAL EQUALIZATION BETWEEN the CENTRAL GOVERNMENT and with the GRACE of GOD ALMIGHTY the PRESIDENT of the REPUBLIC of INDONESIA,.,, Considering: a. that the unitary State of the Republic of Indonesia organized a Government, and community development to achieve a fair, prosperous, and equitable, based on Pancasila and the 1945 Constitution;
.,, b. that regional development as an integral part of national development is carried out through regional autonomy and national resource settings, which provide an opportunity for increased democracy and the performance of the Sepik region and managed to in implementing governance, community service, and work to improve the welfare of society toward a civil society that is free of corruption, collusion, and nepotism, it is necessary for community participation, openness, and accountability to the public;
.,, c. that to support the Organization of the autonomous areas through the provision of financing sources based on decentralization, dekonsentrasi, pembantuan, and the task needs to be financial equalization between the Central Government and the regions in the form of the financial system which is set based on the Division of the powers, duties, and responsibilities clear between levels of Government;
.,, d. that Act No. 32 of 1956 About of Financial Equalization among the States with areas which has the right to take care of his own Home, is no longer appropriate with the development of the State as well as the need and aspirations of the community in support of the autonomous region then need to set the laws governing financial equalization between the Central Government and regions;
.,, Considering: 1. Article 1 paragraph (1), article 5 paragraph (1), article 18, article 20 paragraph (1), article 11 paragraph (4), and article 33 of the Constitution of 1945;
., ,2. The Ordinance of the people's Consultative Assembly Number XV/MPR/1998 on the Organization of the autonomous region, settings, distribution and utilization of national resources That Justice, as well as the Central and regional Financial Balance Within the framework of the unitary State of the Republic of Indonesia;
., ,3. Act No. 22 of 1999 on local governance (State Gazette Number 60 in 1999, an additional Sheet country number 3839;
With the approval of the HOUSE of REPRESENTATIVES of the REPUBLIC of INDONESIA to decide:.,, set: the law on the FINANCIAL EQUALIZATION BETWEEN the CENTRAL GOVERNMENT and REGIONS.
CHAPTER I GENERAL PROVISIONS article 1 In this law is the:.,, 1. Financial Equalization between the Central Government and regional government financing is a system within the framework of the unitary State, which includes the Division of finance between the Central Government and the regions as well as the equitable distribution between the regions proportionately, democratic, just, and transparent with attention to potential, conditions, and the needs of the region, in line with the obligation and the Division of authority and the authority conducting the Ordinance , including the management and supervision of its financial reserves;
., ,2. The Central Government is the Central Government as stipulated in Act No. 22 of 1999 on local governance;
., ,3. The local government is a local government as stipulated in Act No. 22 of 1999 on local governance;
., ,4. The Autonomous Region is autonomous region as mentioned in Act No. 22 of 1999 on local governance;
., ,5. The autonomous region, hereinafter called the area, is the autonomous region as mentioned in Act No. 22 of 1999 on local governance;
., ,6. The head of the regional Governor for the province or County for the Regent or Mayor for the area of the city referred to in Act No. 22 of 1999 on local governance;
., ,7. Regional representatives, hereinafter abbreviated to PARLIAMENT, is the Regional Representatives as stipulated in Act No. 22 of 1999 on local governance;
., ,8. Decentralization is Decentralization as stipulated in Act No. 22 of 1999 on local governance;
., ,9. Dekonsentrasi is Dekonsentrasi as stipulated in Act No. 22 of 1999 on local governance;
., .10. Task Pembantuan Task Pembantuan is referred to in Act No. 22 of 1999 on local governance;
.,, 11. The Secretariat of the Central Finance and Equalization Field Area is one of the Secretariat in the autonomous region Advisory Council referred to in Act No. 22 of 1999 on local governance;
., 12. Budget income and Expenditure the country, hereinafter abbreviated STATE BUDGET, the annual financial plan is one of the Countries that are assigned based on the law on the budget of the State Expenditures and Revenues;
., 13. Budget income and Expenditure Area, hereinafter abbreviated BUDGETS, annual financial plan is a defined Area based on local regulations regarding Budget revenues and Shopping Areas;
.,, 14. Equalization Fund is a fund sourced from STATE BUDGET receipts allocated to the region in order to finance the needs of the region in the framework of the implementation of Decentralization;
., 15. Lending Area is all transactions resulting in the area received from the other party a sum of money or benefit worth the money so that the region bears the obligation to repay, not including short-term credit common in trade;
.,,16. Budget Dekonsentrasi is the implementation of the STATE BUDGET in the area of the province, which include all receipts and expenditure to finance the implementation of Dekonsentrasi;
., General Agreement. Budget Assignments STATE BUDGET execution is Pembantuan in the area and the village, which includes all of the receipts and expenditure to finance the implementation of Pembantuan;
., 18. General Allocation funds are funds that are derived from the STATE BUDGET, which is allocated with the goal of equitable Regional intergovernmental financial capability to finance its expenditure needs in the framework of the implementation of Decentralization;
.,, 19. Special Allocation funds are funds that are derived from the STATE BUDGET, which is allocated to the region to help fund a specific need;
.,, 06. The document Area is all the documents published local government that is open and placed in the piece.
CHAPTER II the basics of FINANCING LOCAL GOVERNANCE Section 2.,, (1) Organizing task Areas in the framework of the implementation of Decentralization is financed over a load of BUDGETS.
.,, (2) organizing the Central Government task carried out by the Provincial Regions in the framework of implementation of the STATE BUDGET burden financed Dekonsentrasi.
.,, (3) the Organization of the Central Government task carried out by the regions and Villages in order to Pembantuan Tasks financed over the STATE BUDGET burden.
.,, (4) submission or pelimpahan the authority of the Central Government to the Governor or the surrender or assignment of authority of the Central Government to the Bupati/Walikota followed by pembiayaannya.
CHAPTER III ADMISSION sources IMPLEMENTATION of the DECENTRALIZED Part of the first Regional Acceptance sources article 3 resources reception Areas in the implementation of Decentralization are: a. the original Income Areas;

b. the balance of Funds;

c. Loans Area;

d. other legal Acceptance.

The second part of the original source of income Areas article 4 Genuine Income Sources the area referred to in article 3 letter a consists of: a. the results of tax areas;

b. results of the region;., levy, c. Area owned company results and the results of other areas of wealth management are separated; d. Miscellaneous Income of the original Area.

Article 5, (1) the provisions on tax and regional levies Area referred to in article 4 of the letter a and letter b is governed by the Act.
.,, (2) the provisions concerning the company belongs to the area of wealth management and other areas are separated as referred to in article 4 letter c is regulated in accordance with the legislation in force.
The third part of the Fund balance of article 6 (1) Fund Balances consist of:.,,.,, a. Part Area of Earth and building tax receipt, the Bea acquisition of Rights over the land and buildings, and acceptance of natural resources; b. allocation of Public Funds;

c. Special Allocation Fund.

.,, (2) the acceptance of the State of the Earth and building Tax is divided with the balance of 10% (ten percent) for the Central Government and 90% (ninety percent) for the region.
.,, (3) Acceptance of the Bea acquisition of Rights over the land and buildings divided by the balance of 20% (twenty per cent) to the Central Government and 80% (eighty percent) for the region.
.,, (4) 10% (ten percent) of Earth and building tax revenues and 20% (twenty percent) of the receipt of the Bea acquisition of Rights over the land and buildings that become part of the Central Government as referred to in paragraph (2) and paragraph (3) was distributed to all the counties and cities.
.,, (5) the acceptance of the State of the natural resource sectors of forestry, mining, public sector and fisheries sectors divided by the balance of 20% (twenty per cent) to the Central Government and 80% (eighty percent) for the region.
.,, (6) the acceptance of the State of natural resources sector, mining oil and natural gas produced from the region in question divided by balance as follows:.,,.,, a. acceptance of the country from the mining of petroleum originating from the region after the tax components subtracted in accordance with the provisions of the applicable balance divided by 85% (eighty five percent) for the Central Government and 15% (fifteen per cent) for the region.

.,, b. Acceptance of mining natural gas originating from the region after the tax components subtracted in accordance with the applicable provisions divided by the balance of 70% (seventy percent) for the Central Government and 30% (thirty per cent) for the region.
Chapter 7.,, (1) the General Allocation Funds are set at least 25% (twenty five percent) of Acceptance within the country specified in the STATE BUDGET.
.,, (2) the General Allocation of funds to Provincial Areas and for areas of Kabupaten/Kota assigned each of 10% (ten percent) and 90% (ninety percent) of the General Allocation Funds as set forth in paragraph (1).
.,, (3) in the event of a change of authority between the Province and the area of Kabupaten/Kota, the percentage allocation of Funds for provincial and Regional areas of Kabupaten/Kota referred to in subsection (2) are adapted to those changes.
.,, (4) the allocation of Public Funds to a particular Province assigned Areas based on the number of General Allocation Funds multiplication for the entire area of the province set out in the BUDGET, with a portion of the area of the province in question.
.,, (5) the portion of the area of the province referred to in subsection (4) is the proportion of the weight of the concerned Province Area against the number of weights in all Provinces throughout Indonesia.
.,, (6) the General Allocation of funds to a particular district/city Regions defined based on the number of General Allocation Funds multiplication for whole area of Kabupaten/Kota is set out in the BUDGET with a portion of the area of Kabupaten/Kota is concerned.
.,, (7) the portion of the area of Kabupaten/Kota referred to in subsection (6) is the proportion of Area weighting Kabupaten/Kota in question against the number of weights in all Districts/cities throughout Indonesia. (8) the weighting of the area defined by:.,, a. needs of the autonomous community of the region;

b. the economic potential of the region.

.,, (9) the general allocation of funds based on Calculation formula referred to in paragraph (4), subsection (5), subsection (6), paragraph (7), and subsection (8) are performed by the Secretariat of the Centre for Financial Equalization and Field areas.
Article 8.,, (1) Special Allocation Funds be allocated from the STATE BUDGET to certain areas to help finance their special needs, having regard to the availability of funds in the NATIONAL BUDGET. (2) the Special Requirements referred to in subsection (1) is:.,,.,, a. needs that could not be estimated using the general allocation formula; and/or b. a need which is a commitment or national priorities;

.,, (3) Special Allocation Funds as referred to in subsection (1) includes funds that come from reforestation. (4) balance divided by the reforestation Funds:.,,.,, a 40% (forty per cent) distributed to producing Areas as a Special Allocation Fund. b. 60% (sixty percent) to the Central Government.

.,, (5) except in the course of reforestation, the area that got financing special needs as referred to in paragraph (2) provides matching funds from a GRANT in accordance with the ability of the area concerned.
Article 9 the large amount of Equalization Funds referred to in article 6 paragraph (1) established a budget every year in the STATE BUDGET.

Article 10 further Provisions regarding the procedures for calculation and distribution of the upper part of the reception Area of the State referred to in article 6 paragraph (2), subsection (3), subsection (4), subsection (5) and paragraph (6), and the formula referred to in article 7 paragraph (4), subsection (5), subsection (6), paragraph (7), and subsection (8), as well as a special allocation of Funds referred to in article 8 are regulated with a government regulation.

The fourth part of the loans Area, article 11, (1) Regions can do a loan from domestic sources to finance a portion of the budget.
.,, (2) loan from the source Area do abroad through the Central Government.
.,, (3) Regions can do long term loans to finance the construction of infrastructure which is a Regional asset and can produce receipts for repayment of loans, as well as provide benefits to community service.
.,, (4) Regions can do short term loans to cash-flow arrangement within the framework of the management of the cash area.
Article 12.,, (1) Lending Area referred to in article 11 is carried out with the approval of PARLIAMENT.
.,, (2) loan Area referred to in subsection (1) is done with regard for the ability of the region to meet their obligations.
.,, (3) so that everyone can know it, every loan agreement conducted by the region announced in the Gazette the area.
Article 13.,, (1) the areas prohibited conduct Lending areas that cause terlampauinya limits the number of Loans a defined Area.
.,, (2) the area of prohibited conduct agreement which is resulting in the securing of load up the finance area.
.,, (3) violation of the provisions referred to in paragraph (1) and paragraph (2), be penalized according to applicable legislation.
Clause 14.,, (1) all payments into a liability for the loan of the regional Area is one of the priorities in spending BUDGETS.
.,, (2) in the event that the area did not meet the payment obligations for the loan areas from the Central Government, then the Government can take into account such obligations with a general allocation of Funds to the region.
Article 15 implementation of the Lending Areas referred to in article 11, article 12, article 13, and article 14 further regulated with a government regulation.

The fifth part of the Emergency Fund, article 16, (1) for the purposes of a particular Area given to urgent emergency fund which came from the STATE BUDGET.
.,, (2) the procedures and the procedures for channelling emergency fund in accordance with the provisions applicable for the NATIONAL BUDGET.
CHAPTER IV FINANCIAL MANAGEMENT and ACCOUNTABILITY in the IMPLEMENTATION of article 17., DEKONSENTRASI, (1) Financing in the framework of the implementation of the Dekonsentrasi transmitted to the Governor through the Department/Institution Non Government department concerned.
.,, (2) Accountability over the financing of the implementation of the Dekonsentrasi as mentioned in subsection (1) is done by the Governor to the Central Government through the Ministry of Non Government agencies/Department concerned.
.,, (3) financial administration in financing the implementation of Dekonsentrasi is done separately from the financial administration in financing the implementation of Decentralization.
.,, (4) the receipt and expenditure relating to the implementation of the Dekonsentrasi diadministrasikan in the Dekonsentrasi Budget.
.,, (5) in case there is the rest of the budget more than acceptance of the spending on the Fund Dekonsentrasi, then the rest of the budget of the Cash deposited to more countries.
.,, (6) an examination of the financing of the implementation of the Dekonsentrasi as mentioned in subsection (1) is carried out by the establishments of the State financial inspectors.
.,, (7) further Provisions on the financing of the implementation of Dekonsentrasi is set by government regulations.
Chapter V FINANCIAL MANAGEMENT and ACCOUNTABILITY in the IMPLEMENTATION of Article 18, PEMBANTUAN, (1) Financing in the framework of implementation of Pembantuan distributed to Regions and villages through the Department/Non Governmental departments that hand.
.,, (2) Accountability over the financing of the implementation of the Tasks referred to in paragraph Pembantuan (1) conducted by regional and Village to the Central Government through the Ministry of Non Government agencies/departments that hand.
.,, (3) financial administration in financing implementation of Pembantuan conducted separately from the financial administration in financing the implementation of Decentralization.
.,, (4) the receipt and expenditure relating to the implementation of the Tasks Pembantuan Tasks in the budget diadministrasikan Pembantuan.
.,, (5) in case there is the rest of the budget more than acceptance of the spending on the Fund Pembantuan Tasks, then the rest of the budget of the Cash deposited to more countries.
.,, (6) examination of financing implementation of Pembantuan as mentioned in subsection (1) is carried out by the establishments of the State financial inspectors.
.,, (7) further Provisions on the financing of implementation of Pembantuan is set by government regulations.
CHAPTER VI FINANCIAL MANAGEMENT and ACCOUNTABILITY in the IMPLEMENTATION of the DECENTRALIZATION of the first section issues financial management Decentralization in the implementation of article 19.,, (1) All receipts and expenditure in the framework of the implementation of Decentralization is recorded and maintained in the BUDGETS.
.,, (2) All receipts and expenditure areas that are not related to the execution of a task or Dekonsentrasi Pembantuan is the receipt and expenditure in the framework of the implementation of Decentralization.
.,, (3) BUDGETS, BUDGETS, and Changes the calculation of BUDGETS are set by local regulations. (4) a GRANT, a GRANT, and Changes the calculation of the GRANT is the document area.

Article 20.,, (1) BUDGETS are set by local regulations at the latest 1 (one) month after the STATE BUDGET is set.
.,, (2) changes to BUDGETS set by local regulations not later than 3 (three) months before the end of the fiscal year.
.,, (3) the calculation of the GRANT BUDGET is assigned at least 3 (three) months after the end of the fiscal year in question.
Article 21 of the budget expenditure in the BUDGETS must not exceed the budget receipts.

Section 22 (1) Area may establish a reserve fund in order to finance a specific need.
.,, (2) a reserve fund referred to in subsection (1) are reserved from the reception area.
.,, (3) any establishment of a reserve fund referred to in subsection (1) are set by local regulations.
.,, (4) All acceptance reserve fund referred to in subsection (1) and all expenses over the burden of reserve fund diadministrasikan in the GRANT BUDGET.
Article 23.,, (1) the provisions of the financial management of trees Area arranged with local regulations.
.,, (2) financial management systems and procedures of the region is controlled by a decision of the head of the Region in accordance with local regulations as referred to in paragraph (1).
The Second Part


Financial Accountability reports Area Article 24.,, (1) the head of a Regional report accountability to PARLIAMENT about:.,,.,, a. Regional financial management referred to in article 19, article 20, article 21 and article 22;
.,, b. financial performance Area in terms of financial efficiency and effectiveness in the implementation of Decentralization.
.,, (2) the DPRD in open plenary session accept or decline by requesting to improve accountability report as referred to in paragraph (1). 3 financial accountability Report) is the document Area of the region.

The third part of the examination of the Financial Area of article 25 Inspection over implementation, management, finance and accountability Area conducted in accordance with the applicable legislation.

Article 26 the provisions about the fine points of the management and accountability of financial Areas as referred to in article 23 and article 24, set by government regulations.

CHAPTER VII FINANCIAL INFORMATION SYSTEMS AREAS article 27 (1) the Central Government organizes a system of financial information of the region.
.,, (2) the information contained in the financial information system of the area referred to in subsection (1) is the open data which can be known to the public.
.,, (3) the provisions on the Organization of financial information system in the area referred to in subsection (1) is set by a decision of the Minister of finance.
Article 28.,, (1) obligatory Areas convey information relating to the financial Area to the Central Government, including Loan area.
.,, (2) implementation of the provisions referred to in subsection (1) is set by government regulations.
CHAPTER VIII the SECRETARIAT of FINANCIAL EQUALIZATION and CENTER FIELD AREAS Article 29.,, (1) the Secretariat of the Central Finance and Equalization Field Area is in charge of preparing the Council's recommendations concerning the autonomous region Consideration of financial equalization and regional Centres as well as other matters relating to the financial management area.
.,, (2) further Provisions regarding the Secretariat referred to in paragraph (1) are governed by presidential decree.
CHAPTER IX TRANSITIONAL PROVISIONS article 30.,, (1) legislation related to the financial Areas along does not conflict and have not adapted to this Act is still in force.
.,, (2) the adjustments referred to in paragraph (1) be carried out no later than 2 (two) years after the Act is enacted.
Article 31.,, (1) in the STATE BUDGET be allocated funds to directly finance the Decentralization Affairs apart from the acceptance Area referred to in article 3.
.,, (2) the provision in paragraph (1) applies only to the longest 2 (two) year budget since the promulgation of this law.
.,, (3) direct financing from the STATE BUDGET as referred to in paragraph (1) excluded from the provisions of article 7 paragraph (1).
.,, (4) every fiscal year, related technical Ministers draw up reports on all projects and activities are detailed according to:.,, a. sector and subsector for development spending;.,, b. organizational unit Department/non governmental Department for routine expenses;
.,, c. implementation projects and activities managed by the Central Government, as well as projects and activities managed by the Regional implementation for all shopping. (5) the report referred to in subsection (4) is submitted to the HOUSE of REPRESENTATIVES.

CHAPTER X PROVISIONS CLOSING Article 32 With the enactment of this Act, Act No. 32 of 1956 About of Financial Equalization among the States with areas, which reserves the right to take care of their own Home (State Gazette Number 77 in 1956, additional State Gazette Number 1442) stated do not apply.

Article 33 this Act comes into force on the date of promulgation.

In order to make everyone aware of it, ordered the enactment of this legislation with its placement in the State Gazette of the Republic of Indonesia.

.,, Enacted in Jakarta on May 19 1999 INDONESIAN PRESIDENT BACHARUDDIN JUSUF HABIBIE Enacted in Jakarta on May 19, 1999 MINISTER of STATE SECRETARY of STATE of the REPUBLIC of INDONESIA, Prof. Dr. h. MULADI, S.H. STATE GAZETTE EXTRA RI No. 3848. (Explanation of the 1999 State Gazette Number 72)
EXPLANATION for the law of the Republic of INDONESIA number 25 in 1999 ABOUT the FINANCIAL EQUALIZATION BETWEEN the CENTRAL GOVERNMENT and the PUBLIC, the Government, in the framework of the Organization of the State and society to achieve national development fair, prosperous, and equitable based on Pancasila and the 1945 Constitution, article 1 of the Constitution of 1945 stipulates the State Indonesia is a unitary State in the form of a Republic. Hereinafter in article 18 of the Constitution of 1945 along with the explanation States that the area of Indonesia is divided into areas that are autonomous in nature or are areas of administration.
., Regional development, as an integral part of national development was carried out based on the principle of the autonomy of the region and setting up national resources that provide the opportunity for increased democracy and regional performance to improve the welfare of society toward a civil society that is free of corruption, collusion, and nepotism. The Organization of local governance as sub State Government system intended to improve the effectiveness and results to the Organization of Government and community service. As an autonomous region, the area has the authority and responsibility of the organized interests of society based on principles of transparency, public participation, and questioned to the community.
.,, In order to convene the Government, community service, and development of a country, then the Government can carry out three main functions i.e. allocation of functions that include, among other things, the economic resources in the form of goods and services for the distribution function of community service, which includes, among other things, the income and wealth of society, equitable development, and stabilization functions that include, among others, Defense-Security, economic and monetary. The distribution function and the function of stabilization in general more effectively carried out by the Central Government while the allocation of functions in general more effectively implemented by local governments, because the area is generally more knowing the needs and standards of community service. However in practice to note the conditions and situations that vary from each region. Thus, the third division of the function in question is very important as a foundation in the determination of the basics of financial equalization between the Central Government and regions clearly and firmly.
.,, To support the Organization of Regional autonomous authority required extensive, real, and responsible in the regions proportionately a manifested with settings, Division, and the utilization of national resources that justice, as well as the balance of the Central Government and regions financial. Source of financing of local governance in order to finance the balance of the Central Government and implemented on the basis of decentralization, dekonsentrasi, and pembantuan.
.,, Sources of financing the implementation of decentralization consists of original income equalization funds, regions, lending areas, and other legitimate acceptance. Native source of income is the financial resources of the areas that were excavated from within the regions concerned consisting of the results of the local tax, a levy on the proceeds of the region, the area of wealth management results are separated, and the other original areas of legitimate income.
Equalization Fund, is a source of financing that originated from the Region of Earth's Tax and Customs buildings, the acquisition of land rights and buildings, and acceptance of the natural resources, as well as the allocation of public funds and funds allocation. The Equalization Fund cannot be separated from each other, given the purpose of each type of source co-exist and complement.
.,, Part of the area of the Earth and building tax receipt, the Bea acquisition of Rights over the land and buildings, and acceptance of natural resources, is a source of acceptance which basically pay attention to the potential of producing regions. The General Allocation funds are allocated with the goal of equitable having regard to the potential of the region, area, geography, population, and community income levels in the region, so that the differences between the developed areas with underdeveloped areas can be minimized. Special allocation fund aims to help finance the particular needs of the region. In addition to tackling the urgent circumstances such as natural disasters, to the region be allocated an emergency fund. Thus, the Act is in addition to providing a foundation for the Division of financial arrangements between the Central Government and the regions, also provide a foundation for financial equalization between regions.
.,, In the implementation of financial equalization between the Central Government and the Regions need to pay attention to the financing needs for the implementation of the powers that be the responsibility of the Central Government, including financing for foreign policy, Defense-Security, judicial, fiscal and monetary management, religion, as well as loan repayment obligations of the Central Government.
.,, This legislation also set about the authority the area to form the reserve fund sourced from the reception Area, as well as the system of financial management and accountability in the implementation of decentralization, dekonsentrasi, and pembantuan. Financial accountability within the framework of decentralization undertaken by Regional Heads to PARLIAMENT. Various financial reports Area is placed in the document Area in order to be known by the people making it come true openness.

.,, In financial management areas. In terms of the examination conducted by the Region's financial institutions examiner functional. In addition, to support the smooth implementation of the system of allocation to the region, the financial information system also regulated the area and establish a Financial Equalization Field Centre Secretariat and the area is in charge of preparing recommendations on the financial equalization between the Central Government and regions.
.,, Financial Equalization between the Central Government and the regions as provided for in Act No. 32 of 1956 could not be implemented as expected, because among other factors to calculate the Financial Division to the region have not been allowed to be used. In addition, various types of taxes which is a resource for the implementation of the current financial equalization no longer enforced through various legal regulations as well as the need and aspirations of communities that developed in support of the autonomous region, hence the need to set out the legislation governing financial equalization between the Central Government and regions.
., Based on the description above, this law has the purpose of principal include: a. Empowering and improving the ability of the economy of the region.
.,, b. Creating regional financing system that is fair, rational, proportionate, transparent, participatory, responsible (accountable), and certain.
.,, c. embodies the system of financial equalization between the Central Government and regions that reflects the Division of authority and responsibility between the Central Government and local governments, support the implementation of Regional autonomy with a transparent local governance penyelenggararaan, pay attention to public participation and accountability to the community, reduce the gap between the regions in its ability to finance the otonominya responsibilities, and ensures that Regional financial resources comes from the region in question. d. be a reference in the allocation of State reception for the area.

e. financial accountability system Expresses by local governments.

f. became the principal guidelines of the financial area.

The SAKE ARTICLE ARTICLE article 1 this Article, confirms the meaning of some terms used in this law, with a view to equate understanding over those terms, so that the inevitable misunderstandings in interpreting.

Article 2, paragraph (1), quite obviously, subsection (2), quite obviously, subsection (3), quite obviously, subsection (4), pelimpahan, submission or the authority of the Central Government to the Governor or Regent/Mayor can be done in the framework of decentralization, Dekonsentrasi, and Pembantuan. Any submission or pelimpahan the authority of the Central Government to the Regions in the framework of Decentralization and Dekonsentrasi accompanied by a transfer of human resources, and the means as well as allocating the necessary budget for the smooth execution of surrender and pelimpahan authority.

Meanwhile, the assignment from the Central Government to the Regions in the framework of the task Pembantuan assignment budget accompanied.

Article 3, letter a,.,, is the Original Revenue Area is acceptance gained area from sources within its territory its own loading based on local regulations in accordance with the legislation in force. The letter b, Letter c, clear enough, clear enough, d., Letter, other legitimate acceptance of, among other things, grants, emergency fund, and other receipts in accordance with the legislation in force.

Article 4, letter a, letter b, clear enough, clear enough, Letter c., of, kind of acceptance that includes wealth management results of other Regional decoupled part, among others, earnings, dividends, and the sale of shares belonging to the area. D., letter, other legitimate areas of Original Income, among other things, the results of the sale of fixed assets and services area of the giro.

Article 5, paragraph (1), the types of taxes and regional levies Areas adapted to the authority delegated to the provincial and Regional District/city. The adjustment is done by changing the Act No. 18 of 1997 on Tax and regional Levies. Subsection (2), clearly Enough, article 6, paragraph (1), letter a,.,, is a part of the reception Area of the natural resources is part of the reception area of the Country is derived from the management of natural resources, inter alia, in the field of General mining, mining oil and natural gas, forestry, and fishing. Letter b.,, the use of these funds are set entirely by the region. The letters c, a, pretty clear paragraph (2), further, the division between the province and District/city is governed in accordance with the legislation in force. Paragraph (3), further, the division between the province and District/city is governed in accordance with the legislation in force. Subsection (4), quite obviously, subsection (5), the regional Section, which comes from acceptance of natural resource sectors of forestry, mining, public sector and fisheries sector received from the Central Government set as follows: a. the Forestry Sector are divided as follows:.,,.,, 1) 80% (eighty percent) of the receipt of Dues Concession rights to the forest was divided with the details:.,, a. part Province of 16% (sixty percent);

b. producing district/city part of 64% (sixty-four percent).

., .2) 80% (eighty percent) of the receipt of the provision of forest resources are divided with the details:.,, a. part Province of 16% (sixty percent);

b. producing district/city part of 32% (thirty-two per cent);., c. other parts of Kabupaten/Kota in the Province in question amounted to 32% (thirty-two percent). b. the General Mining Sector are divided as follows:.,,.,, 1) 80% (eighty percent) of the receipt of the Dues Remain (Land-rent) divided by the details:.,, a. part Province of 16% (sixty percent);

b. producing district/city part of 64% (sixty-four percent).

., .2) 80% (eighty percent) of the receipt of dues dues exploration and exploitation (royalty) divided by the details:.,, a. part Province of 16% (sixty percent);

b. producing district/city part of 32% (thirty-two per cent);., c. other parts of Kabupaten/Kota in the Province in question amounted to 32% (thirty-two percent).
.,, d. 80% (eighty percent) of the fishing Concession Levy and the levy results of Fisheries are dealt evenly to all Kabupaten/Kota in Indonesia. Paragraph (6).,, letter a., of the regional Section, as referred to in paragraph (2) letter a is divided with the details as follows: i. the concerned Provincial section of 3% (three percent);

II. section Kabupaten/Kota producing 6% (six percent);

III. other parts of Kabupaten/Kota in the Province concerned 6% (six percent). The letter b., Regional Sections, as referred to in paragraph (6) letter b is divided with the details as follows: i. the part of the concerned Provinces 6% (six percent);

II. the district/city manufacturer of 12% (twelve percent);

III. other parts of Kabupaten/Kota in the Province in question amounted to 12% (twelve percent).

Article 7, paragraph (1), the allocation of Public Funds, as referred to in this verse is the sum of all the regional public allocation for provinces and for regions of Kabupaten/Kota.

The increase in allocation of Public Funds will be in line with the surrender and transfer of authority of the Central Government to the Regions in the framework of Decentralization. Subsection (2), quite obviously, subsection (3), the adjustment percentage as referred to in this paragraph are set in the STATE BUDGET. Subsection (4) and paragraph (5), General Allocation Fund, the formula as referred to in this paragraph are: allocation of Funds for one particular Province Public = amount of funds Allocation Weighting Provincial Area involved is common to the region X--------------------------Province number of weights of all the Provincial subsection (6) and subsection (7), General Allocation Fund, the formula as referred to in this paragraph are: allocation of Funds to a particular district/city = the amount of funds Allocation Weighting Regional District/city's common to the region X-------------------------------district/municipality number of weights from the whole area of Kabupaten/Kota.
Subsection (8),, the regional Weighting is determined based on the results of empirical studies taking into account the relevant variables.
.,,.,, a. needs of the autonomous community of the region less of a variable can be reflected the population, area, geography, and income levels of society to pay attention to the poor community groups.
.,, b. the economic potential of the region, among others, can be reflected by the potential acceptance of an accepted areas such as industrial potential, the potential of natural resources, human resources potential, and gross Regional domestic product. Subsection (9), the Secretariat, the field of Central and Regional Financial Balance also compile and keep up to date or data which is variable in the formula. Thus the Secretariat of Financial Equalization and Center Field area as an objective and independent agencies can maintain openness and transparency in the allocation of Public expenditure.

Article 8, paragraph (1), clear Enough, paragraph (2) letter a,,.,, needs which cannot be estimated in General with the formula, is a special needs which are not the same as the needs of other areas, for example in the area of resettlement needs, and needs some kind of new infrastructure investment, building roads in remote areas, irrigation canals and drainage channels, primer primer. Letter b., including, among other things, the projects financed and donor humanitarian projects to meet basic human needs. Paragraph (3), quite obviously, subsection (4), the letter a

Reforestation Funds, as in paragraph (4) of the letter a is used only for financing the activities of reforestation and afforestation by producing Area. The letter b., reforestation Funds, as in paragraph (4) the letter b is used for financing the activities of reforestation nationally by the Central Government. Subsection (5),, to express commitment and responsibility Areas in financing programs which is the special needs, it is necessary the provision of funds from a GRANT as an escort over the allocation of Funds from the STATE BUDGET.

Article 9, article 10, is clear enough, the trees, the charge that Government regulations, among other things:.,, a. Ordinance the calculation and distribution of part of the reception Area of the country that comes from the Earth and building Tax Division, Bea acquisition of land rights and buildings, natural resources, forestry sector., b., General mining, mining oil and natural gas, and fishery Areas to provincial and Regional District/city.

General Allocation Fund formula that contains weights, weights Area Provincial area of Kabupaten/Kota, the mechanism of channeling part of the area to the area of the province and Kabupaten/Kota Area is concerned.
.,, c. Special Allocation Funds that contain a minimum percentage of co-funding, sectors/activities that cannot be funded, the use of a special allocation of Funds, and the role of the Minister of national development planning wing and related technical Ministers as well as the mechanisms channelling part of areas to provincial and Regional District/city.

Article 11, paragraph (1), domestic Loans, can be sourced from the Central Government and/or commercial institutions and/or the issuance of bonds. Subsection (2), the mechanism of loans from foreign sources through Central Government contain the sense that the Central Government will conduct an evaluation of the various aspects regarding whether the proposed Loan could be areas for further processing. Thus the further processing of the loan proposal Area indirectly already reflects the approval of the Central Government over a proposal for a stated purpose. Paragraph (3),, is a long-term loan is a loan with a period of more than one year with a requirement that the cost of loan repayment, loan principal and/or interest and/or all other costs, partially or completely will be repaid in the next fiscal year. A period of long-term loan may not exceed the age of economical infrastructure. Subsection (4),, is a short term loan is a loan with a period of less or equal to one year with a requirement that the cost of loan repayment, loan principal and/or interest and/or all other costs, will be repaid entirely in the fiscal year concerned.

Article 12, paragraph (1), the approval of PARLIAMENT, against the proposed local Government to get a loan done carefully by considering, among other things, the ability of the area to pay and the maximum loan limits. Subsection (2), a, is the ability of the region to meet their obligations is the ability of the region to finance expenditure needs, whether the loan is taxable as well as other expenses such as employee salaries and operational costs and maintenance. Paragraph (3), this Provision was intended to, there is openness and accountability are clear about the obligation of such loans.

Article 13, paragraph (1), the loan amount Limits, the area is the maximum loan amount that can be accepted by the region with attention to indicators of the ability of the region to borrow or loan repayment, a ratio that indicates the availability of a number of funds in a certain time period to cover liabilities loan payments. Subsection (2), the Guarantee in question, in this verse is the securing of the area against the loan company, among others, regional and private loan in the framework of implementation of the project area. Paragraph (3), the applicable legislation, regulations, among other things, the Act is a criminal offence of corruption, Civil Service Act, the legislation of the State Treasury, and the CRIMINAL CODE.

Article 14, paragraph (1).,, by placing a duty on loans Region Area as one of the priorities in spending BUDGETS, fulfillment of obligations of the said is expected to have a position that is parallel to the other expenses that must be prioritized areas, such as expenditures when not done can give rise to social insecurity. Thus the fulfillment of obligations for the loan Area cannot be ruled out if the target not achieved NATIONAL acceptance. Subsection (2), the provisions of this paragraph, the implementation is carried out taking into account the financial circumstances of the region.

Section 3., the charge points, government regulations, among other things, the types and sources of loans, a sector that can be financed with the loan funds, limits the maximum loan, loan term, and the procedures for obtaining a loan.

Article 16, paragraph (1),, is an urgent requirement is the occurrence of extraordinary circumstances which could not be solved by an area with financing from BUDGETS, namely natural disasters and/or other event expressed the Central Government as a national disaster. Subsection (2), clearly Enough, article 17, paragraph (1), the authority and responsibility with respect to financing in the framework of the implementation of the Dekonsentrasi, referring to the legislation concerning the STATE BUDGET and the Treasury of the State. Funds financing the implementation of the Dekonsentrasi does not constitute the acceptance of a GRANT. Subsection (2), quite obviously, subsection (3), quite obviously, subsection (4), quite obviously, subsection (5), quite obviously, subsection (6), quite obviously, paragraph (7), the charge points, government regulations, inter alia, allocating and administering the financial execution of the Dekonsentrasi by the Governor with the device, which includes the systems and procedures of inspection planning, implementation/monitoring and questioned the financial mechanism, in accordance with the applicable State finance for the STATE BUDGET.

Article 18, paragraph (1), quite obviously, subsection (2), quite obviously, subsection (3), quite obviously, subsection (4), quite obviously, subsection (5), quite obviously, subsection (6), quite obviously, paragraph (7), the charge points, government regulations, among other things, the form and structure of the Budget Pembantuan, allocating and administering the financial implementation of Pembantuan by the Governor with the device, which includes the systems and procedures of inspection planning, implementation/monitoring and financial accountability According to applicable State finance mechanism for the STATE BUDGET.

Article 19, paragraph (1), which is recorded and managed in a GRANT including recorded and maintained in the change and the calculation of the GRANT. Subsection (2), this Provision, to ensure that all receipts and expenditure managed Governor or Regent/Mayor with a device classed within the framework of the implementation of Decentralization or in order of execution of Dekonsentrasi or in the framework of the implementation of the task Pembantuan. For example the health levy constitutes acceptance of Decentralized implementation in order and diadministrasikan in the GRANT BUDGET. Paragraph (3), quite obviously, subsection (4), is quite clear, article 20, paragraph (1), quite obviously, subsection (2), quite obviously, subsection (3), clear Enough, chapter 21, the provisions of article, this means an area may not have budgeted expenditures without certainty in advance about the availability of the source pembiayaannya and encouraging regions to increase the efficiency of its expenditure.

Article 22, paragraph (1), the provisions of this paragraph, giving opportunities to the region if needed to establish a reserve fund for expenditure needs that require a relatively large enough funds that could not be charged in a single financial year. Paragraph (2).,, reserve fund can be provided from the rest of the budget more last year and/or source of income of the region. Paragraph (3), the Region, the rule of, among other things, set a goal of a reserve fund, the source of funding of the reserve fund, and the types of expenditure that can be financed with the reserve fund. Subsection (4), established a reserve fund, and diadministrasikan openly, not concealed, stored in the form of cash or an easily redeemable, and all transactions must be listed in the GRANT BUDGET.

Diadministrasikan in the GRANT means the note starting balance, all receipts and expenditures, as well as the final balance in the reserve fund details form.

Article 23, paragraph (1), Regulatory charge trees of the area, among other things, the framework and outline the procedure for preparing the BUDGETS, the financial authorities of the region and Head of PARLIAMENT, principles of cash management, cash spending authorization, the procedures for procurement of goods and services, the procedure did the loans, and financial accountability. Subsection (2), procedures, systems and financial management areas include, among other things, the structure of the Organization, documentation, and detailed procedures in the implementation of financial management, which aims to optimize the effectiveness, efficiency, and security. In addition, the procedures and systems must be able to provide information to the Government accurately and on time.

Article 24, paragraph (1), the financial accountability, the report is expressed in a form of a report. Subsection (2), a report by the PARLIAMENT's refusal, should be accompanied by a reason.

Further process of denial of accountability of the head of the area following the mechanisms referred to in the law on local governance. Paragraph (3), Article 25, clear enough, clear enough, Article 26., the charge points, government regulations that, among other things:

.,, a. principles for transparency and accountability regarding the preparation, changes, and the calculation of BUDGETS, cash management, the procedures for reporting, internal auditing, authorization, and so on, as well as the guidelines for the system and procedures management;
.,, b. accountability report guidelines with regard to the service, the cost of the unit components, activities, and local government accounting standards, as well as the percentage of the amount of the receipt of a GRANT to finance general government and public administration.

Article 27, paragraph (1), the source of information for financial information systems is primarily an information report on Area BUDGETS referred to in Pasal24 subsection (1). Subsection (2), quite obviously, subsection (3), the charge points, a decision the Minister of finance, among other things, the agency responsible for compiling and maintaining the information systems area, the financial procedures of obtaining the necessary information, and the procedures for providing information to government agencies and the community.

Article 28, paragraph (1), quite obviously, subsection (2), trees, a charge the Government regulations, among other things, the type of information, the form of the report information, the procedures for the preparation, and submission of information to the related technical Ministers.

Article 29, paragraph (1),, the Recommendations, among others, regarding the determination of the magnitude of the Public Allocation of funds to each Region based on a predetermined formula financing and policy areas. Subsection (2), trees, a charge the President's decision, inter alia, the number and qualifications of members, the procedures for adoption, a period of employment, as well as the duties and responsibilities of the members of the Secretariat.

Article 30, paragraph (1), quite obviously, subsection (2), clearly Enough, article 31, paragraph (1),.,, this paragraph allows the NATIONAL BUDGET allocation to finance the Decentralised Affairs directly to a two-year transitional period for the budget. This provision, among other things, allows the STATE BUDGET funds to complete the project implementation has started with the sectoral BUDGET funds prior to the enactment of this Act. This provision aims to reduce gradually, within a period of two years, the amount of budget financing of Decentralized Affairs previously financed directly from the Center through the technical department. Subsection (2), quite obviously, subsection (3), quite obviously, subsection (4),, is a budget every year in this provision is for two (2) year budget in a time of transition. Subsection (5), Article 32, clear enough, clear enough, Article 33,, is quite clear.