Fiscal Decentralisation and Public Financial Management

KOMPAK has been providing technical assistance on public financial management to improve how the national government allocates funding to sub-national government, as well as to assist local governments to increase their funding allocations and improve the quality of spending towards basic services. KOMPAK is prioritising the following three key result areas in supporting the local governments, which are:

• Strengthen public financial management at the district level;
• Improve national fund allocation policies and mechanisms supporting sub-national basic service delivery; and 
• Strengthen the use of Special Autonomy Funds.

KOMPAK's strength is in working at multiple levels of government and harnessing the lessons learned to improve national policies and funding mechanisms. This is demonstrated by initiatives to strengthen performance-based funding allocations where KOMPAK is working with government partners to both refine indicators and test the approaches at the district and village levels.

KOMPAK is also piloting new financial planning and budgeting tools to simplify and consolidate the process and strengthen the analytical tools available for planners and decision-makers.

For the special autonomous regions, which have some of the greatest development needs, KOMPAK is providing support through both evaluations, implementation of the corresponding recommendations, and in supporting the piloting of a new social protection program, the BANGGA Papua Universal Child Grants. The initiatives that KOMPAK is supporting have the potential to assist sub-national governments across Indonesia by making sure limited funds are spent most effectively where they are most needed.