DSF Quarterly Report September 2009 by Decentralization Support Facility

DSF Quarterly Report September 2009

DSF QUARTERLY REPORT SEPTEMBER 2009

DSF Quarterly Report September 2009

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

DSF Quarterly Report 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 genderbalanced 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 postSuharto 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 2

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

DSF Quarterly Report 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 20092011, 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 #

1/2009

Name

Capacity Strengthening Program for DPRD (Local Government Legislatures)

Closing Date for Review June 26

Budget Estimate (USD) 500,000

Trust Fund Status Grant Funding Request (GFR) made

Procurement or ACN Status Eligible expenditures for Grant Agreement (GA) finalized; procurement and financial management

DSF Quarterly Report September 2009

ACN #

2/2009

3/2009

4/2009

5/2009

6/2009

7/2009

8/2009

9/2009

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 Procurement underway

Capacity Building for Regional Development Policy Formulation Socialization and Pilot Implementation of Joint Circular Letter (SEB) on Monitoring of Technical Implementation and Evaluation of Use of Special Allocation Funds (DAK) Management Strengthening and Institution Building for Local Public Service Providers (MSIB-LPSP) Institution Building for the Integration of NationalRegional Development and Spatial Planning Building Capacity for the Development of SubNational Government Capital Markets for Municipal Bonds Government Training and Education Centre Development: Introducing Competency Based Standards for Improved Public Service Delivery

June 26

142,500

Active

June 26

550,000

GFR made

Minor revisions to the ACN are being made

June 26

500,000

GFR made

Minor revisions to the ACN are being made (budget)

July 17

483,400

Active

August 18

900,000

GFR made

August 18

797,0003

GFR made

Institution Building for the Accelerated Development of Border Areas Capacity Building through Decentralization Education and Training (DET) for Public Service Delivery

August 21

500,000

Active

October 2

796,760

Pending decision on mode of execution

Procurement underway

Minor revisions to the ACN are being made (budget). Procurement ToR are being drafted Eligible expenditures finalized for GA; procurement and financial management assessment of Diklat/MOHA completed; draft GA under review Procurement underway Mode of execution under discussion with MoHA

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.

DSF Quarterly Report September 2009

ACN #

Name

10/2009

Strengthening Local Government Natural Resource Management Capability Formulation of Norms, Standards, Procedures and Criteria (NSPK) for Local Government Service Delivery Strengthening Data Provision to the Regional Financial Information System by Sub-National Governments with StandAlone Electronic Data Bases Grand Design of Fiscal Decentralization

11/2009

12/2009

13/2009

14/2009

Costing and Pilot Implementation of Minimum Service Standards

Closing Date for Review October 14

Budget Estimate (USD) 749,500

Trust Fund Status

Procurement or ACN Status

Active

Procurement about to commence

October 14

1,000,000

Pending decision on mode of execution

Mode of execution under discussion with MoHA

October 2

250,000

GFR made

Procurement ToR are being drafted

900,000

Pending completion of ACN review Pending completion of ACN review

ACN close to completion

1,200,000

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 DSFâ&#x20AC;&#x;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 logframe 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.

DSF Quarterly Report September 2009

Table 2: Geographical Distribution of DSF Activities High Density Provinces (provinces with 4 or more DSF activities) No. 1

High Density Provinces Kepulauan Riau (6)

DSF Activity MSS Strengthened capacity of DPRD Border area development planning

West Kalimantan (5)

NSPK DET Local government borrowing MSS Strengthened capacity of DPRD Border area development planning

East Kalimantan (4)

Maluku (4)

East Nusa Tenggara (4)

DET NSPK DAK Diklat competency based training DET Border area development planning Strengthened capacity of DPRD Border area development planning

DET NSPK Strengthened capacity of DPRD Border area development planning

DET NSPK

Identified Kab./Kota Kab. Bintan Kota Batam, Kab. Natuna, Kab. Bintan, Kab. Kep. Anambas Kota Batam

Kab. Sanggau, Kab./Kota Pontianak Kab. Sambas, Kab. Bengkayang, Kab. Sanggau, Kab. Sintang, Kab. Kapas Hulu Kota Pontianak

Kab. Kutai Barat, Kab. Nunukan, Kab. Malinau Kab. Maluku Barat Daya, Kab. Maluku Tenggara Barat, Kab. Kep. Aru, Kab. Maluku Tengah Kab. Kupang, Kab. Timor Tengah Utara, Kab. Belu, Kab. Alor, Kab. Rote Ndao Kota Soe

Medium Density Provinces (provinces with 2 DSF activities) No. 1

Medium Density Provinces North Sumatra (2)

Banten (2)

West Java (2)

DSF Activity MSS Border area development planning MSS MSIB-LGSP (AMSD II) MSIB-LGSP (AMSD II) Local government borrowing

Identified Kab./Kota Kab. Serdang Bedagai Kab./Kota Tanggerang Kota Serang, Kab. Lebak, Kota Cilegon Kota Bandung

DSF Quarterly Report September 2009

No. 4

Medium Density Provinces Yogyakarta (2)

Bali (2)

West Nusa Tenggara (2)

Papua (2)

DSF Activity MSS

DAK Strengthened capacity of DPRD NSPK DAK Diklat competency based standards Border area development planning

Identified Kab./Kota Kab. Bantul, Kab. Sleman, Kab. Gunung Kidul, Kab. Kulon Progo, Kota Yogyakarta

Kabupaten Badung

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. 1 2 3 4

Provinces NAD (1) West Sumatra (1) South Sumatra (1) Riau (1)

DSF Activity Border area development planning DAK Strengthened capacity of DPRD Border area development planning

5 6 7 8 9

DKI Jakarta (1) East Java (1) North Sulawesi (1) South Sulawesi (1) Southeast Sulawesi (1) North Maluku (1) West Papua (1)

Local government borrowing Diklat competency based standards Border area development planning Natural resource management DAK

Kab. Kep. Talaud, Kab. Kep Sangihe

Border area development planning Border area development planning

Kab. Kep. Morotai Kab. Raja Ampat

10 11

Identified Kab./Kota Kota Sabang

Kota Dumai, Kab. Bengkalis, Kab. Rokan Hilir, Kab. Indragiri Hilir, Kab. Kep. Meranti

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

DSF Quarterly Report 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.

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

DSF Quarterly Report 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.

DSF Quarterly Report September 2009

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.

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.

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

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

DSF Quarterly Report September 2009

Output 1: Public Service Delivery Objectives

Indicators

Progress

Rate

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.

Comment

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:â&#x20AC;? 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).

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.

DSF Quarterly Report September 2009

Output 1: Public Service Delivery Objectives

Indicators

Progress

Rate

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.

Comment

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.

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

Through this activity both MoHA and Bappenas seek to strengthen cross-ministerial institutions, such as

DSF Quarterly Report September 2009

Output 1: Public Service Delivery Objectives

Indicators

Progress

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.

Rate

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.

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.

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 SocialPolitical 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 20012007  Territorial Reform and People‟s Welfare: Finding Alternatives Consultations and dissemination workshops with national and local multi-stakeholder forums were

Comment

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.

DSF Quarterly Report September 2009

Output 1: Public Service Delivery Objectives

Indicators

Progress

Rate

Comment

Project implementation was handicapped by key members of the selected consultancy team not being available as proposed and poor compliance to ToRs.

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.

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.

The implementation consultants presented a midterm 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. 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.

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.

Provincial OSS Performance Indices (POPIs)

DSF Quarterly Report September 2009

Output 1: Public Service Delivery Objectives

Indicators

Progress

Rate

formulated and implemented in Bali and North. Sulawesi in April-July 2009.

Comment 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.

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.

Output 2: Fiscal Decentralization and Capacity Development Objectives

Indicators

Progress

Rate

Comment

2.1. The Ministry of Financeâ&#x20AC;&#x;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 MoFâ&#x20AC;&#x;s regional financial information system (SIKD) for Fiscal Year 2007. Support duration: May-August 2009.

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.

Data entered and verified to date: Budget data (APBD, 2009) - 481 districts (94

DSF Quarterly Report September 2009

Output 2: Fiscal Decentralization and Capacity Development Objectives

Indicators

Progress

Rate

Comment

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.

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 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

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.

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.

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. 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:

DSF Quarterly Report September 2009

Output 2: Fiscal Decentralization and Capacity Development Objectives

Indicators

Progress  

Rate

Comment

Activity is currently on hold pending further discussions with GOI.

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.

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)

2.6. Government pro-poor special allocation fund monitored and evaluated

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.

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.

Empirical analysis on regional government investment in public infrastructure based on audited financial data for 2004-2007 completed June 2009.

DSF Quarterly Report September 2009

Output 3: Increasing Accountability Objectives

Indicators

Progress

Rate

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.

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.

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.

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

Comment

Modes of execution being determined.

In order to meet the objectives stated in 3.4 it is recommended that an activity addressing public accountability mechanisms be added

DSF Quarterly Report September 2009

Output 3: Increasing Accountability Objectives

Indicators

Progress

CSOs

3.5. Improved knowledge sharing on support to local governments

Rate

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. 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/cgibin/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.

Comment to the DSF Work Plan 2009-2011.

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.

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.

Output 4: Planning and Performance Measurement Objectives

Indicators

Progress

Rate

Comment

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

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

DSF Quarterly Report September 2009

Output 4: Planning and Performance Measurement Objectives

Indicators

Progress

Rate

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.

Comment 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 governmentsâ&#x20AC;&#x; 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.

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 â&#x20AC;&#x17E;Institution Building for the Accelerated Development of Border Areasâ&#x20AC;&#x; 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.

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.

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.

DSF Quarterly Report September 2009

Output 4: Planning and Performance Measurement Objectives

Indicators

Progress

Rate

Comment

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.

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.

This project is complete and has met its objectives.

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 SubNational 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.

The website will be linked to the DSF website.

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.

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;

DSF Quarterly Report September 2009

Output 4: Planning and Performance Measurement Objectives

Indicators

Progress

 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

Rate

Comment

This project is complete and has met its objectives.

Strengthening of Data Sharing, Analysis, and Utilization; and Legislation and Regulation, May 2009.

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 nongovernment 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.

Output 5: Improved Development Effectiveness in Eastern Indonesia Objectives

Indicators

Progress

Rate

Comment

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.

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.

DSF Quarterly Report September 2009

Output 5: Improved Development Effectiveness in Eastern Indonesia Objectives NGOs. academics, donors, DSF and private sector

Indicators

Progress 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.

Rate

Comment

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.

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

DSF Quarterly Report September 2009

Output 5: Improved Development Effectiveness in Eastern Indonesia Objectives

Indicators

Progress

Rate

Comment

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.

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.

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.

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

DSF Quarterly Report September 2009

Output 5: Improved Development Effectiveness in Eastern Indonesia Objectives

Indicators

Progress

Rate

Comment

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).

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 subdistricts in two districts in West Sulawesi and is planned to be replicated in all districts in West Sulawesi in 2009.

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.

Two Eastern Indonesia Forum regional policy dialogues held under DSF to discuss and promote policy priorities for the region.

DSF Quarterly Report September 2009

Output 5: Improved Development Effectiveness in Eastern Indonesia Objectives

Indicators

Progress

Rate

Comment

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.

DSF Quarterly Report September 2009

Annex B: Financial Report 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. 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 Contribution Currency GBP

Contribution Amount 24.36

AusAID

USD

CIDA

CAD

Contributors DFID

43.27

Cash Received in USD million 27.50

1.00

0.50

44.77

29.00

Total

USD equivalent

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 Investment income (as of September 30, 2009) Projected Administration fee (1% of total pledges) Other Income (as of September 30, 2009) Total Available Funds

44,766,214 1,342,420 447,662 24,754 46,581,050

DSF Quarterly Report September 2009

Budget (USD) Projects Focal Area 1 Tax Assignment and Own-source Revenue

2,968,714 -

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

Focal Area 2

1,808,059

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 Improved Evidence Base of Good and Bad Local Perda

49,703 117,682

Focal Area 3

5,474,414

National Program for Community Empowerment

1,080,522

CDD Summit

421,705

Policy Development for PNPM

104,275

Cost Accounting Review for CDD Programs Technical Assessment for CDD Programs

16,512 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 New projects approved and registered in FY09

97,908 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

DSF Quarterly Report September 2009

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 DSF Executive Operations Additional donor contribution for DSF Operations

700,000 1,502,043 586,462

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 â&#x20AC;&#x201C; 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.

DSF Quarterly Report September 2009

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)

44,766,214

29,000,052

Receipts Paid in Contributions Investment Income

1,342,420

Other Income Total Receipts

24,754 44,766,214

30,367,226

2,968,714

1,946,310

Disbursements Focal Area 1 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

Fiscal Agency Intergovernmental Framework Fund

476,214

55,000

43,850

7,634

305,000

47,920

2,029

200,000

119,989

79,766

1,808,059

656,646

464,384

Local Government Performance Measurement

187,174

Identification and Replication of Good Practice

478,000

143,397

334,593

Appraisal : Sub national Investment Climate Reform Knowledge Management for Effective Local Government Support Programs Mapping and Analysis of Local Planning and Budgeting Processes

600,000

119,823

129,791

375,500

38,867

49,703

Improved Evidence Base of Good and Bad Local Perda

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

Policy Development for PNPM

104,275

58,666

Cost Accounting Review for CDD Programs

16,512

Technical Assessment for CDD Programs

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

Exploring Future Reform Options in Functional Assignment Supporting the Establishment of Financially Feasible Minimum Service Standards Alternative Mechanism of Service Delivery Focal Area 2

191,665

DSF Quarterly Report September 2009

CCT Baseline Survey

Budget (USD) 1,674,301

Actual (USD) 1,669,665

Commitments (USD) -

Decentralization Support for Eastern Indonesia (SofEI)

3,310,588

2,623,454

204,535

97,908

1,150,000

92,467

Priority Area 4 Institutional Building for the Integration of National Regional Development and Spatial Planning Capacity Building for Regional Development Policy Formulation

500,000

150,000

92,467

Institution Building for the Accelerated Development of Border Areas

500,000

Quick starts New projects approved and registered in FY09

Approved 2009-2011 workplan in registration process Priority Area 1 - Public Service Priority Area 2 - Fiscal Decentralization Priority Area 3 - Governance Reform Priority Area 4 - Planning and Performance Measurement

12,535,265 3,200,000 2,700,000 2,096,760

Knowledge Management for Aid Effectiveness

1,750,000 700,000

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

43,498,188

14,267,327

447,662

290,001

43,945,850

14,557,328

Total Project Disbursements Administration fee Total Disbursements Outstanding commitments Total Cash Available (= Funds receipts - Disbursements Commitments)

1,200,723

161,684

1,200,723

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.

DSF Quarterly Report September 2009

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 â&#x20AC;&#x201C; 2011

Expected Receipts Projected Cash Remaining from prior period Paid in Contributions DFID AusAID CIDA Cash Receipt during current period Investment Income Other Income

Projections as of Sept. 30, 2011 (USD million)

Actual per Sept. 30, 2009 (USD million)

Year ended June 30, 2010 (USD million)

Year ended June 30, 2011 (USD Million)

14.60

17.23

11.94

27.5

8.27

0.5

29.00

23.6

25.50

11.94

1.34

0.47

0.51

0.24

0.03

30.37

24.07

26.01

12.18

Focal Area 1

1.95

1.02

Focal Area 2

0.66

1.2

Focal Area 3

5.33

0.14

Eastern Indonesia projects (SoFEI)

2.62

0.69

0.1

3.62

2.6

3.7

0.58

Public Services

4.2

1.5

Fiscal Decentralization

2.5

Planning and Performance Measurement

1.15

1.7

3.7

Governance Reform

1.89

3.4

Expected Cash Available to DSF TF Disbursements

Quick starts Project Operations Priority Area per FY09

DSF Quarterly Report September 2009

Total Project Disbursements (Projections) Administration fee Total Disbursements (Projections) Outstanding commitments Total Cash Available for subsequent year(s)

Actual per Sept. 30, 2009 (USD million)

Year ended June 30, 2010 (USD million)

Year ended June 30, 2011 (USD Million)

14.28

6.75

14.0

Projections as of Sept. 30, 2011 (USD million) 12.2

0.29

0.09

0.08

14.57

6.84

14.07

12.2

1.2

14.60

17.23

11.94

0.00

DSF Quarterly Report September 2009

Annex C: List of Acronyms

ACCESS ADKASI

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ADS AMSD APBD AusAID BAKTI BAPPEDA BAPPENAS BPK BPMD CCT CDD CIDA CIPSED CSO DFID DG DKI DSF EIP EKPPD

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ETC FAA GDS2 GOI GTZ HIV/AIDS IDPL IFC ILO IPEA JiKTI KDP KPPOD

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LGPM LIPI M&E MC MDG MKPP

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MOF MOHA

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Australian Community Development & Civil Society Strengthening Scheme Asosiasi DPRD Kabupaten Seluruh Indonesia (Association of Indonesian District DPRD) Australian Development Scholarship Alternative Mechanisms of Service Delivery Anggaran Pendapatan Belanja Daerah (Province/District Budget) Australian Agency for International Development Bursa Kawasan Timur Indonesia (East Indonesia Exchange) Badan Perencanaan Pembangunan Daerah (Local Planning & Development Agency) Badan Perencanaan Pembangunan Nasional (National Planning & Development Agency) Badan Pengawas Keuangan (Audit Board of the Republic of Indonesia) Badan Pengembangan Masyarakat Desa (Community Empowerment Agency) Conditional Cash Transfer Community Driven Development Canadian International Development Agency Canada Indonesia Private Sector Enterprise Development Civil Society Organization Department for International Development Director General Daerah Khusus Ibukota (Jakarta Special Region) Decentralization Support Facility East Indonesian Portal Evaluasi Kinerja Penyelenggaraan Pemerintah Daerah (Local Government Performance Evaluation) Extended Term Consultant Fiscal Agency Agreement Governance and Decentralization Survey 2 Government of Indonesia Gesellschaft f端r Technische Zusammenarbeit (German Technical Co-operation) Human Immunodeficieny Virus/Acquired Immuno Deficiency Syndrome Infrastructure Development Policy Loan International Finance Cooperation International Labor Organization Initiative for Public Expenditure Analysis Jaringan Peneliti Kawasan Timur Indonesia (East Indonesia Researcher Network) Kecamatan Development Program Komite Pemantauan Pelaksanaan Otonomi Daerah (Monitoring Committee for Local Autonomy Implementation) Local Government Performance Measurement Lembaga Ilmu Pengetahuan Indonesia (Indonesian Institute of Science) Monitoring & Evaluation Management Committee Millennium Development Goal Matriks Konsolidasi Perencanaan dan Penganggaran (Consolidated Matrix for Planning and Budgeting) Ministry of Finance Ministry of Home Affairs

DSF Quarterly Report September 2009

MOU MSS NCG NGO NSPK NTB NTT OSS PDKBM

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PEACH PEMDA PMD PMK PNPM

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PSF RED RESPEK RTI SC SOFEI STC TA TAF TF UKAW UNDP UNICEF WB YIPD

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Memorandum of Understanding Minimum Service Standard Nordic Consulting Group Non-Government Organization Norma, Standar, Prosedur dan Kriteria (Norms Standard Procedures and Criteria) Nusa Tenggara Barat (West Nusa Tenggara) Nusa Tenggara Timur (East Nusa Tenggara) One Stop Shop Pemutakhiran Data Kemiskinan Berbasis Masyarakat (Community Based Poverty Data Updating) Public Expenditure Analysis and Capacity Enhancement Pemerintah Daerah (Local Government) Pembangunan Masyarakat Desa (Local Community Development) Peraturan Menteri Keuangan (Finance Minister Regulation) Program Nasional Pemberdayaan Masyarakat (National Program for Community Empowerment) PNPM Support Facility Regional Economic Development Rencana Strategis Pembaruan Kampung (Strategic Plan for Village Reform) Research Triangle Institute Steering Committee Support Office For East Indonesia Short Term Consultant Technical Assistance The Asia Foundation Trust Fund Universitas Kristen Artha Wacana (Artha Wacana Christian University) United Nations Development Program United Nations Children's Fund World Bank Yayasan Inovasi Pemerintah Daerah (Foundation for Local Government Innovation)

DSF Quarterly Report September 2009