DSF Quarterly Report December 2009

December 2009

DSF Quarterly Report

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DSF QUARTERLY REPORT DECEMBER 2009

December 2009


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Table of Contents

Table of Contents ............................................................................................................................ 1

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

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

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

Looking to the future .................................................................................................................. 2

Priorities of the new government. ............................................................................................... 2

Work Programming ........................................................................................................................ 3

Work Plan Implementation ............................................................................................................. 6

Costing of minimum service standards ....................................................................................... 6

Alternative mechanisms for service delivery (AMSD) .............................................................. 6

Functional assignments/Norms, standards, procedures and criteria (NSPK) ............................. 7

Information system for regional financial data (SIKD) .............................................................. 7

Border Areas ............................................................................................................................... 7

Sub-national Business Climate Reform ...................................................................................... 8

Delays in Programming and Implementation ................................................................................. 9

Funding of New Activities and the Future of the DSF? ............................................................... 10

DSF Engagement with Local Government ................................................................................... 11

Monitoring Framework ................................................................................................................. 11

Financial Report ............................................................................................................................ 11

DSF Governance ........................................................................................................................... 12

DSF Executive .............................................................................................................................. 12

Engagement with government. ................................................................................................. 12

Engagement with donors........................................................................................................... 12

Staffing – professional staff appointments. .............................................................................. 13

SOfEI disengagement. .............................................................................................................. 13

Risks .............................................................................................................................................. 13

Annex A: Monitoring Frame ......................................................................................................... 15

Annex B: Financial Report ........................................................................................................... 29

Annex C: List of Acronyms ........................................................................................................... 36


December 2009

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December 2009

Decentralization Support Facility

Quarterly Report (For the quarter ending 31 December 2009)

Introduction

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

days following the end of the fourth quarter of 2009.

2. Based on an up-dated version of the monitoring framework developed for the DSF

Annual Report 2009, the report discusses the progress in the final quarter of 2009 of DSF-

financed activities approved in January and February 2007 and in 2009 and outlines

progress made with the design, execution, and implementation of activities under the DSF

Work Plan 2009-2011 (see sections in the body of the report, Tables 1 and 2, and Annex

A).

3. It also examines reasons for delays in programming and implementation; up-dates

(very briefly) certain aspects of the governance and development context and features of

the management and functioning of the DSF Executive; and notes developments

concerning local government engagement.

4. A financial report is set out in Annex B and a snapshot of available funds and

formally approved commitments appears in Table 3. The report also considers the

implications of DSF‟s financial position for new activities; for the role of the DSF

Executive; and for the future of DSF beyond March 2012.

Governance and Development Context

5. During the fourth quarter of 2009, some of the more visible and significant events

associated with governance have arisen from questions surrounding the so-called

Corruption Eradication Commission (KPK) scandal. Allegations that government

prosecutors and senior police had conspired to frame KPK investigators (of taking bribes)

and tape recordings of conversations that seemed to support the allegations cast a pall over

some of the most important institutions of governance in the country. The governance

implications arising from allegations surrounding the government bailout of Bank Century

are equally grave.

6. These events posed a serious test to the new government and, according to some

analysts, threatened investor confidence. Nevertheless, the fact that open discussion of the

issues involved took place in the media and a number of public demonstrations were

allowed to proceed signifies enduring strength of other significant governance institutions.

7. Economic development.1 One year after the global economic and financial crisis,

Indonesia‟s economy has recovered to near pre-crisis growth rates. Domestic and global

risk remains significant however. Important indicators include:

1 Source: ‘Indonesia Economic Quarterly: Back on Track’. World Bank, Jakarta, December 2009.

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December 2009


a. The economy continued to strengthen gradually in the fourth quarter of 2009,

continuing the trends evident in September 2009.

b. Growth is broad based, inflation remains moderate, and financial markets have

risen.

c. While the real economy remains stable, particularly relative to other countries in

the region, financial markets have been somewhat volatile. The rupiah continued

to appreciate through October, and then in December settled in a range of 9,400

to 9,500 – just a little weaker than before the onset of the crisis and stronger in

real effective exchange rate terms.

d. The new government is gearing up for substantial investments in physical

infrastructure, human services and governance institutions.

e. Growth in 2010 is likely to be around 5.6%, rising to 6.0% in 2011.

f. The government‟s 2009 budget deficit is likely to be smaller than projected in

the revised budget, or about 2.3% of GDP.

g. The main risks in the global economic environment are likely to be associated

with the withdrawal or exhaustion of various monetary and fiscal stimulus

measures. On the domestic front, „recent domestic political developments have

begun to raise questions about the timing and depth of future economic

reforms‟.

8. Looking to the future: The achievements of the past decade augur well for the

future - in relation to sustainable human development (education, health, and livelihoods),

physical infrastructure, and economic development. If the solid foundations of political and

macroeconomic stability that have been laid can be built upon, then in the coming decade

Indonesia has the potential to become a socially just and cohesive society with a dynamic

and competitive economy - in short, an inclusive middle income country.

9. The main challenges to achieving such ends lie in: accelerating the rate of poverty

reduction and reducing the vulnerability of relatively large sections of the population to

slipping-in to poverty; employment creation, particularly in higher value-added, non-

agricultural jobs; improving water and sanitation, health and education service delivery,

particularly at the local level; stemming environmental degradation and natural resource

depletion; improving physical infrastructure; strengthening the investment climate; and, as

a means to addressing all of these challenges, continuing to reinforce and protect the

institutions of effective, efficient and clean governance.

10. The DSF strategic framework that is set out in the DSF Annual Report 2009 remains

compatible with and complimentary to these developments and challenges.

11. Priorities of the new government. Short-term priorities specified by the new

government address the issues identified above, including accelerating improvements in

health and education service delivery, and DSF support is being provided to help ensure

progress towards some of these ends. For example, among other things, the MoHA „100

day‟ programme specifies as priorities the Grand Design of Decentralization, local

government capacity building, local investment and business climate improvement through

one stop shops, resolution of spatial and development planning issues, and the development


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December 2009

of border areas. In relation to the latter, a new National Agency for the Management of

Border Areas has been established by presidential decree.

12. The DSF is active in all of these areas.

Work Programming

13. In May 2009, a no-cost extension for the DSF to September 2011 was formally

approved.2 Pending such approval (that is, up to late May 2009), in accordance with the

wishes of the principal financial donor and so as not to raise expectations that might not be

met, design and development of activities under the DSF Work Plan 2009-2011 had been

put on hold. Commencing immediately upon the granting of the no-cost extension, in the

seven months from May to December 2009, a total of 23 activities, each involving in one

way or another one or more of 20 government directorates in three different government

agencies, were designed, subjected to a thorough process of internal and external review,

and formally approved by the DSF Management Committee (MC). Considering the large

number and variety of interested parties involved, the complexity of the issues addressed,

and the relatively short time within which the work was done, this was a noteworthy

achievement.

14. The 23 activities were separated into two rounds of programming. The first round,

involving 14 full-blown activities (described in 14 separate Activity Concept Notes –

ACNs), was largely approved in the third quarter of 2009 (12 out of 14 activities). The

second round, involving 9 activities that were designed and conceived as extensions or

developments of those that constituted the first round, was approved by the MC (by

circulation) during November/December 2009.

15. The majority of the latter, which are summarised in Table 1 below, are in the process

of being developed as addenda to existing ACNs – two have already been completed. This

should reduce the time needed for their detailed design and the establishment of execution

and implementation arrangements.

Table 1: Second Round of Programming under DSF Work Plan 2009-2011

Proposal Link to ACN Counterpart Notional

Budget

1 DPRD Orientation ACN 1/2009 MoHA (Diklat) $500,000

2 Regional Development

Policy

ACN 2/2009 Bappenas (Pengembangan

Wilayah)

$700,000

3 Local Government

Evaluation

ACN on EPPD MoHA (PDOK) $300,000

4 Inter-Regional Cooperation

ACN 2/2009

ACN 4/2009 Bappenas (Otda)

MoHA (PUM)

$1,000,000

5 Regional Finance ACN 12/2009

ACN 13/2009

MoF (DJPK) $850,000

6 Provincial Government

Support Program (PGSP)

ACN 2/2009

ACN 4/2009

ACN 5/2009

ACN 14/2009

Bappenas (KKDT),

MOHA (UPD, PUM)

Province of Gorontalo and

Bangka Belitung

≤$2,000,000

2 In December 2009, a further no-cost extension – to 31 March 2012 – was formally approved and the Contribution

Agreement was amended accordingly.

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December 2009


Proposal Link to ACN Counterpart Notional

Budget

7 Regional & Local

Economic Development

ACN 10/2009 Bappenas ( Perkotdes) $600,000

8 Sub national Business

Climate Reform

DSF Work Plan

2007-2008

continuation

MoHA (Bangda & Diklat)

Bappenas (Biro Hukam)

$1,000,000

9 Grand Design on

Implementation of Regional

Autonomy

ACN 13/2009 MoHA (Otda) $700,000

16. As indicated above, to 31 December 2009, fourteen full-blown activities had been

through a thorough process of development, review, and approval. These activities are now

in various stages of execution and implementation. A summary of progress is provided in

Table 2 below.

Table 2: First Round of Programming under DSF Work Plan 2009-2011

ACN # Name

Budget

Estimate

(USD)

Trust Fund

Status Implementation Status

1/2009 Capacity Strengthening

Program for DPRD (Local

Government Legislatures)

500,000 Grant

Funding

Request

(GFR)

submitted

and approved

- activation

pending GA

signing

Final draft of grant agreement

reviewed by MoF & MoHA.

Approvals from TACT (Trust

Fund Accounting Clearance

Team) obtained - World Bank

Country Director waiting to

sign grant agreement when DSF

MOU extension has been

officially processed (at request

from MoF) and sent to GOI.

2/2009 Capacity Building for

Regional Development

Policy Formulation

142,500 Active Implementation underway

(Sept 28, 2009 – Mar 31, 2010)

3/2009 Socialization and Pilot

Implementation of Joint

Circular Letter (SEB) on

Monitoring of Technical

Implementation and

Evaluation of Use of Special

Allocation Funds (DAK)

550,000 Active REOI posted in Kompas in

December; EOI submission

deadline extended to Jan. 14,

2010.

4/2009 Management Strengthening

and Institution Building for

Local Public Service

Providers (MSIB-LPSP)

500,000 GFR

prepared

Project mode of execution

decided in November. Budget

was adjusted. Grant agreement

under assessment by WB. TORs

for Bank executed activities are

being prepared.

5/2009 Institution Building for the

Integration of National-

Regional Development and

Spatial Planning

483,400 Active One consultant under contract

(Dec 1, 2009 - March 31, 2010).

RFP from implementing

agencies sent on Dec 31, 2009.

Deadline for submission of

proposals Feb 01, 2010


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December 2009

ACN # Name

Budget

Estimate

(USD)

Trust Fund


6/2009 Building Capacity for the

Development of Sub-

National Government

Capital Markets for

Municipal Bonds

900,000 GFR

submitted

Preparation for international

workshop on municipal bonds

underway (likely mid-March

2010).

TA to DKI Jakarta ongoing - on

preparation of a municipal bond

issue.

7/2009 Government Training and

Education Centre

Development: Introducing

Competency Based

Standards for Improved

Public Service Delivery

797,0003 GFR

submitted

and approved

– activation

pending GA

signing

Final draft of grant agreement

reviewed by MoF & MoHA.

Approvals from TACT (Trust

Fund Accounting Clearance

Team) obtained - World Bank

Country Director waiting to

sign grant agreement when DSF

MOU extension has been

officially processed (at request

from MoF) and sent to GOI.

8/2009 Institution Building for the

Accelerated Development of

Border Areas

500,000

500,000

Active

GFR

prepared

Bappenas: One consultant under

contract (Nov 1, 2009- Feb 15,

2010). RFP from implementing

agencies sent out. Deadline for

submission of proposals Jan 28,

2010.

MoHA: Mode of execution

decided in December.

TOR and budget are being

revised (MoHA).

9/2009 Capacity Building through

Decentralization Education

and Training (DET) for

Public Service

Delivery

1,593,520 GFR

prepared

FM and procurement

assessments are in process.

Draft grant agreement is being

reviewed.

10/2009 Strengthening Local

Government Natural

Resource Management

Capability

749,500 Active EOI evaluation report submitted

for Bank approval.

11/2009 Formulation of Norms,

Standards, Procedures and

Criteria (NSPK) for Local

Government

Service Delivery

1,000,000 GFR

prepared

FM and procurement

assessment done by WB. Draft

grant agreement is being

processed. Some Bank-

executed activities are being

procured. ROEI sent to 8

agencies.

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

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

an additional allocation for Diklat, up to a ceiling of $800,000. AKLN sent 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.

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December 2009


ACN # Name

Budget

Estimate

(USD)

Trust Fund


12/2009 Strengthening Data

Provision to the Regional

Financial Information

System by Sub-National

Governments with Stand-

Alone Electronic Data Bases

250,000 Active Dec. 2009: Scoping mission to

North Sulawesi.

Trial run on converting local

data into MoF‟s SIKD system

using data from 3 local

governments in North Sulawesi

underway; STC hired.

13/2009 Grand Design of Fiscal

Decentralization

900,000 GFR

prepared

Preparation underway for

launch meeting (likely Jan. 24-

26, 2010).

14/2009 Costing and Pilot

Implementation of

Minimum Service Standards

1,200,000 Pending

decision on

mode of

execution

ACN approved. GOI to decide

mode of execution.

17. As can be seen in Table 2, during the reporting period, progress in relation to the

finalisation of execution arrangements and implementation for the majority of the fourteen

activities has been reasonable in the circumstances, and these activities have either begun

implementation or at advanced stages of finalising the conditions for execution. This

comment applies to nine of the fourteen activities, some of which are at early stages of

implementation. A further two activities (1 & 7), which are to be recipient executed, have

grant agreements ready for signing and are awaiting the formal approval of the extension of

the DSF MOU (likely in January 2010).

18. Work plan implementation is discussed below. Reasons for the delay of certain

activities are discussed immediately thereafter.

Work Plan Implementation

19. The following are some examples of the results achieved during the past quarter -

from the implementation of activities approved in 2007, and in 2009 under the DSF Work

Plan 2009-2011.

20. Costing of minimum service standards (approved in 2007). Based on DSF

technical assistance to the Ministry of Health and Ministry of Home Affairs, a manual for

the costing of minimum service standards (MSS) was formalized by Minister of Health

Decree No. 317/2009 and 1000 copies were printed for distribution. DSF also supported

„consultation‟ workshops for the draft manual (with local governments) and conducted

simulations using real data from several regions. Wide distribution of the manual will be

helpful to MSS planning and implementation by sub national governments. An electronic

system for costing MSS is in the process of being developed with technical assistance from

the DSF. This will help regions to work more efficiently and manage the database of MSS

indicators. Such data are essential to health MSS monitoring and evaluation.

21. Alternative mechanisms for service delivery (AMSD) (approved in 2007).

Activities under this project were completed in December 2009. Results include the

dissemination of eight basic strategies for AMSD; and pilot project planning in Banten


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December 2009

province - for the better provision of local hospital services, clean/drinking water, and for

population administration.

22. Some elements of the eight strategies of AMSD were not new, but the processes

surrounding their dissemination have been helpful to public service providers in the above

mentioned sectors, which now have a better idea about how to strengthen internal

management processes and recover costs for services. The introduction of performance

agreements between local government head offices and service delivery units is also

helping local governments to provide better public services.

23. Functional assignments/Norms, standards, procedures and criteria (NSPK)

(approved in 2007). In the last quarter, DSF supported a preliminary assessment of NSPK

status in health, trade, energy and mining, agriculture, and land affairs. The analysis

highlighted some weaknesses, including unclear divisions of functions, unclear

accountability, and licensing procedures that overlap between central government,

provinces and districts and municipalities. For example, in land affairs no regulations have

been developed on problems surrounding repayment of land used for public infrastructure

development. In the energy and mining sector, standards and criteria for the involvement of

provinces and districts and municipalities in defining limits for mining production have not

been established.

24. Information system for regional financial data (SIKD) (approved in 2009). In the

last quarter, a team drawn from the DSF and the Directorate for Evaluation and Information

on Regional Financial Management (EIPKD) from the Ministry of Finance (MoF)

conducted a scoping mission in the province of North Sulawesi. The objective was to

review the system for managing data and reporting regional financial information, and to

find ways to synchronize the regional financial databases with the SIKD at EIPKD-MoF.

Before the mission the team conducted an assessment of the database system used by

EIKPD-MoF.

25. The team found that almost all of the districts and municipalities in North Sulawesi

used the Information System for Management of Regional Finance (SIMDA). Given the

widespread use of SIMDA, SIKD-MoF confirmed the feasbility of developing an

application to extract data at the regional level in a format acceptable to MoF that would

enable MoF to access regional financial data electronically.

26. Currently, North Sulawesi is well advanced with entering regional data into their

database. North Sulawesi will be a pilot province for testing the application‟s ability to

extract this data and transfer it electronically to the SIKD-MOF database. DSF is providing

the technical assistance for this pilot and results will be available in the next quarter. If the

pilot is successful, it will be tested in several other provinces that have compatible data

collection and reporting systems.

27. Border Areas (approved in 2009). The development of border areas is a key

national government policy area, as expressed in the latest Medium-term Development Plan

2010-2014 (RPJM). This activity brings together Bappenas and MoHA in a collaborative

effort to provide more comprehensive national government assistance for the development

of border areas, both in terms of economic development and improved service delivery.

Technical assistance was provided to Bappenas in the past quarter primarily as input to the

border areas section of the RPJM.

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December 2009


28. While several national government ministries have run programs in border areas

(notably Bappenas, MoHA and the Ministry of Disadvantaged Regions), there was a lack of

consistency between the identified border areas of each program.

29. During the last quarter, DSF support has identified border areas in a way that helps

synchronize support across national government ministries and programs. Such border

areas have been narrowed down to 12 provinces and 38 districts and municipalities. These

have been accepted by PUM and the Ministry of Disadvantaged Regions.

30. DSF has also assisted with the drafting of development indicators for border areas,

intended for tracking progress throughout the duration of the RPJM. These indicators were

consolidated into a border area matrix. This matrix was included in the final draft of the

RPJM and incorporated input from MoHA (Bangda and PUM) and the Ministry of

Disadvantaged Regions. The matrix covers two focus areas: (i) Accelerating economic

growth in border areas; and (ii) Strengthening institutional capacity to develop border areas

in an integrated manner.

31. DSF technical assistance has also been used to inform the Policy Direction and

Development Strategy of Chapter 9 of the RPJM on border areas.

32. Overall, DSF has contributed substantially to the RPJM 2010-2014 through:

determining the border regions to be assisted and obtaining acceptance from other relevant

ministries; providing key input to the monitoring matrix to be used for the section of the

RPJM on the development of border regions; and providing input to the section on the

development of strategic areas for Chapter 9, Regions and Spatial Aspects.

33. Going forward, DSF will support the production of a Bappenas policy paper on

institutional arrangements for border area development, which encompasses BNPP

(National Agency for the Management of Borders) and BPPD (Regional Agency for the

Management of Border Areas). Outputs are expected in the next quarter.

34. Sub-national Business Climate Reform (approved in 2007). The aim of the

activity has been for local governments to adopt more effective, efficient and accountable

processes for business licensing and to modify regulations accordingly. This was done by

helping government to make better use of regulatory impact assessments and through

support to the establishment of effective one stop shops for business licensing.

35. The main activities in the project were completed in the last quarter and the

cumulative outputs are as follows: (i) revised national OSS guidelines issued through

circular letter No. 500/1191/V/BANGDA; (ii) national OSS curriculum printed and issued;

(iii) national OSS monitoring and evaluation framework issued as BANGDA circular letter;

and (iv) revised manual for RIA implementation disseminated.

36. At the provincial level, Bali and North Sulawesi have established provincial OSS

support units that are tasked with monitoring and building the capacity of district-level

OSS. Both provinces are using self-developed provincial OSS performance indices to

collect data to show the condition of their district-level OSS. The two provincial

governments established district-level OSS forums to share knowledge and build capacity.

In the next quarter the follow-up activity will begin to consolidate, scale-up, and sustain

these reforms. Investment climate is a top priority in the RPJM 2010-2014 and the DSF


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December 2009

will work with multiple government agencies to ensure the agenda is advanced in a

systemic and sustainable manner.

Delays in Programming and Implementation

37. In a small number of cases, there has been little or no progress since activities were

approved by the MC in 2009, or progress has been very slow. This applies to activities 9,

14, 11 and part of activity 8 in Table 2 above.

38. In particular, the pace of progress has been slower than desirable in cases where

there has been disagreement between directorates within a particular ministry concerning

preferred modes of execution. In one agency in particular (Ministry of Home Affairs), there

has been some contention over a policy that stipulates that all DSF-financed activities

should be government executed. Considerable prevarication in decision-making has ensued

as a result of this, causing two activities in particular (9 & 14 in Table 2) to become more or

less completely bogged down and two others to be seriously delayed (11 & part of 8 in

Table 2). In other agencies it has been possible to adopt a more pragmatic and expeditious

approach, allowing mode of execution to be determined by whatever appears to make most

sense for the activity and the parties involved.

39. A number of other factors have contributed to delays. First, all of the government

members of the DSF have been - and will continue to be for some months to come - busy

responding to the short-term requirements of the new government. In some instances, DSF-

supported activity has been directly and immediately helpful to this and therefore has been

accorded high priority, but other cases (involving longer-term yields) for understandable

reasons have been given lower priority.

40. Second, collaboration between directorates within a ministry or between directorates

in different ministries has slowed progress. Such collaboration is sometimes desirable or

necessary, but it can come at a cost. As the number of parties involved increases, so

reaching agreement is likely to be more difficult and to take longer.

41. Third, government execution is clearly desirable, but preparations for it take longer

than for other forms of execution. Implementation may also be slower under recipient

execution.

42. Fourth, on some occasions internal processes within the Bank – which have an

indirect effect on speed of programming, execution and implementation (e.g., recruitment

and selection of professional staff) – could have worked more efficiently.

43. Fifth, government has not been fully aware of the ramifications for program funding

of delay in activity execution and implementation – which ramifications very recently have

become more pointed. In mid-December 2009, the DSF Executive received advice from the

principal financial donor concerning the likelihood that under certain conditions – primarily

associated with the rate of disbursement - pledged funds could be withheld.

44. The probability of funding postponement or withholding raises the question of

whether any activities over and above those that have been approved to date can be

countenanced. Table 3 below shows that available funds exceed current approved

allocations and commitments by a small margin, suggesting that for the time being no new

activities should be considered. Annex B provides a full financial report.

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December 2009


Funding of New Activities and the Future of the DSF?

45. The above notwithstanding, there is steady demand from government for the funding

by DSF of new activities, that is, for activities over and above those already approved by

the DSF governance structure. The excess of demand from government for funding of new

DSF activities over the supply of funds highlights two further questions of strategic

management.

46. First, it suggests that an important emerging – „business development‟ - role for the

DSF Executive might consist in assisting government with the development of project

outlines or concept notes that could be used as a basis for generating new financial

contributions to the DSF, either from existing DSF members or other (non-member)

donors. As with the development of project outlines, the marketing of such possibilities

could be a joint endeavour, led by government with assistance from the DSF Executive as

required.

47. Second, a closely related question concerns the future of the DSF itself and whether

government would wish to maintain this mode of aid management beyond the current

closing date of 31 March 2012. A positive answer to the first question to some extent pre-

empts the second question.

48. Arguments in favour of maintaining a government-led multi-donor facility include:

first, and most importantly, the DSF is genuinely „government led‟, that is, government

decides the uses to which DSF funds are put. The role of the DSF Executive and, to some

extent, the DSF governance structure has been to help government refine and develop its

ideas; to help government consider the most appropriate means for executing and

implementing them; and to expedite the processes surrounding execution and

implementation over which it has some measure of control.

49. Though not-straightforward and therefore time consuming, a significant proportion

of DSF-funded activity will be executed by government. That is, grants to government will

be made that give it complete control over financial management and procurement and rely

on its own fiduciary safeguards. The DSF Executive will provide help with this where it is

needed and requested and monitor and report on activities during implementation. This is

entirely consistent with the stature of an emerging middle income country whose presence

is increasingly recognised on the global stage.

50. Second, there are significant and widely known economies of scale and other

efficiencies associated with such facilities. These arise primarily from the fact that all

aspects of the project cycle are managed through a single governance structure.

51. None of the benefits inherent in the first two arguments outlined above is easily

realisable – or, perhaps, realisable at all - from stand-alone bilateral projects of assistance.

52. Third, all of the international declarations and commitments on aid effectiveness

(Rome, Paris, Accra, and Jakarta etc.) signed by development partners over the last ten

years or so recognise the benefits of multi-donor arrangements and advocate strongly that

they be employed, particularly in governance and development circumstances such as those

that – increasingly – prevail in Indonesia.


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December 2009

DSF Engagement with Local Government

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

with local government was put to the MC for its consideration. The MC agreed that the idea

of a „local government consultative group reporting to the DSF MC be endorsed and

recommended to the DSF Steering Committee for its consideration.‟ The relevant minute of

the meeting also states that: „subject to Steering Committee approval of the

recommendation, a MC task force be established comprising members drawn from the

government technical team and the DSF Executive, whose job it would be to make detailed

recommendations concerning terms of reference for the consultative group; membership;

and forms of logistical and other support to be provided.‟

Monitoring Framework

54. Annex A provides a summary of progress made to date according to the agreed

monitoring framework. Activities are organised according to: (1) Public service delivery;

(2) Fiscal decentralisation; (3) Accountability; (4) Planning and performance measurement;

and (5) Development effectiveness in Eastern Indonesia.

55. All funding for the latter ceased according to plan on 31 December 2009.

Financial Report

56. A detailed 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.

57. Table 3 below provides a snapshot of available funds and formally approved

allocations4 and commitments

5 that takes into account a probable reduction in available

funds of 2 million pounds sterling in the current financial year (see paragraph 43 above).

The difference between total allocations and commitments and total available funds leaves

the DSF with a small positive balance, in the amount of $121,707.

Table 3: Snapshot of Financial Status (USD)

Budget (USD)

Total pledges 45,079,372

Other receipts 24,754

Investment income 1,355,913

Disbursements 15,933,044

Consolidated fund balance 30,526,995

Less GBP 2 million 3,260,000

Available funds 27,266,995

4 The word „allocations‟ is used to denote financial amounts (budgets) formally approved by the DSF

governance structure for a DSF activity or operation. It does not entail any legal obligation. 5 A „commitment‟ signifies that a legally-binding obligation exists to pay the amounts for the purposes

described.

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December 2009


Budget (USD)

Total allocations & commitments

Balance of allocations approved January 2007 5,238,142

First round project allocations - approved 2009 10,890,520

Second round project allocations - approved 2009 7,650,000

DSF Executive (to March 2012) 3,366,626

Total allocations & commitments 27,145,288

Total available funds less total allocations & commitments 121,707

Total cash held (funds received – disbursements & commitments) 13,807,007

DSF Governance

58. Under the always effective and efficient co-chairmanship of the Ministry of Finance

and the World Bank, the Management Committee has responded expeditiously and

constructively to all matters placed before it, whether by circulation outside of formal

meetings or in formal session.

59. During the month of December, formal letters of support for the extension of the

DSF memorandum of understanding to December 2011 were signed by the Ministry of

Finance, Bappenas, and the Ministry of Home Affairs. On the basis of these letters of

support from government, and a formal request for concurrence with the extension proposal

sent to the World Bank, donor members of the DSF (ADB, AusAID, CIDA, DFID,

Government of Germany, Government of the Netherlands, and USAID) were asked to

express their support for the extension, which all have done.

DSF Executive

60. Engagement with government. Such engagement continues to strengthen and, as in

the past, to rest on:

a. Meetings - called by government – with government members of the DSF MC.

b. 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. Workshops with the government (DSF) technical team.

61. Engagement with donors. A summary of proposed support to decentralisation

outside of the DSF, which has been informed by the DSF strategic framework, was

presented to the 28 October 2009 meeting of the DSF MC by bi-lateral donors, and was

well received. The relevant minute of the meeting states: „The presentation was noted as a

positive development and therefore welcomed by members. It was agreed that

consideration should be given to ways of institutionalizing the interaction with the DSF MC


13

December 2009

and that the GOI technical team and the DSF Executive should produce for consideration

by the MC a short note containing recommendations concerning this.‟

62. A meeting of the donor working group on decentralisation (DWG) was held on 12

December 2009. Responsibility for chairing these meetings has been transferred from

CIDA to AusAID and a small sub-group has been established to consider terms of reference

for the DWG.

63. Staffing – professional staff appointments.

a. Senior Economist. Selection interviewing was completed during the reporting

period and internal approvals obtained for making an offer to the preferred

candidate. The appointee is a current Bank employee and arrangements for

internal transfer are in train.

b. Senior Governance Adviser (international). Selection interviewing was

completed in December and internal approvals obtained for making an offer to

the preferred candidate. A fee offer will be made early in January 2010 and

acceptance of this will trigger security clearance by the Bank.

c. Decentralisation Adviser (national). Selection interviewing was completed in

December and internal approvals obtained for making an offer to the preferred

candidate. A fee offer will be made early in January 2010 and acceptance of this

will trigger security clearance by the Bank. It will be possible for this appointee

and the international adviser referred to immediately above to commence work

while the process of security clearance is undertaken, probably in late February

2010.

64. SOfEI disengagement. The sustainable disengagement of SOfEI from the DSF

proceeded according to plan with DSF financial support to SOfEI ending on 31 December

2009. The last bi-monthly report was circulated to MC members on schedule in the first

week of November 2009.

65. SOfEI has been transformed into Yayasan BaKTI, which is now formally established

and operational. Its official launch will take place in late January 2010.

Risks

66. The main risks remain as set out in the DSF Annual Report 2009.

67. The probability of funding postponements or reductions - discussed briefly in

paragraphs 43 and 57 above – also constitutes a risk. Risk management on the part of the

DSF Executive will concentrate on promoting the striking of a reasonable balance between

government need and priority, quality of design and implementation, and speed of

disbursement; and will rely on the maintenance of open and continuous dialogue with

government and the principal financial donor on the basis of the best available information.

14

December 2009



December 2009

15

Annex A: Monitoring Frame

Project Name Decentralization Support Facility (DSF) Phase 2 Goals Indicators Progress Rate Comment

Improved socio-economic

development and reduced

poverty

Indonesia's Human

Development Index (HDI)

Purpose Indicators Progress Rate Comment

Equitable, accountable and

high quality public services

provided by national and local

governments

Local government

expenditure and local

government performance in

basic public service delivery

Contributions to the development and dissemination of legislation and

procedures governing functional assignments; minimum service

standards including costing; institution and capacity building of

service providers; and identification and diffusion of good practices.

3*

* First milestone/ target 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

December 2009


16

Output 1: Public Service Delivery

Objectives Indicators Progress Rate Comment

1.1. Guidelines (norms,

standards, procedures and

criteria-NSPK) for

service delivery in

selected sectors

formulated

Number of new guidelines

(norms, standards,

procedures and criteria) for

service delivery

completed/issued

Consultations held with regions in July 2009 for formulation of 26

norms, standards, procedures and criteria (NSPK) in health. This

resulted in confirmation that up to 10 out of 26 NSPKs can now be

further processed to be formalized by the Minister of Health.

Assessment of 26 NSPK in health and preliminary assessment of

NSPK in agriculture, trade, mining and land administration sector

completed 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 submission to GOI.

ACN 11/2009 on Formulation of Norms, Standards, Procedure and

Criteria (NSPK) was approved in October 2009. Mode of execution is

GOI executed (90.5 %) and WB executed (9.5%). Budget and ToR

have been prepared. Financial management and procurement

assessment was completed. Grant agreement is being prepared.

For World Bank executed component requests for expression of

interest for study on mapping of NSPK status has been sent to 8

agencies. Study expected to be completed by June 2010.

3

1.2. Minimum Service

Standards (MSS), in

targeted sectors budgeted

and implemented in

selected district

governments

Implementation of MSS in

selected sectors in selected

districts and municipalities

The Manual for MSS Costing (Minister of Health Decree 317/2009)

has been printed and is ready for distribution by Ministry of

Health/MoHA to all districts and municipalities. An electronic system

for costing health MSS is being developed.

ACN 14/2009 on Capacity Development for Minimum Service

Standards Costing and Implementation was approved in November

2009. Mode of execution not yet decided.

3

1.3. Alternative service

delivery schemes

established in selected

sectors and districts and

municipalities 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

Assessment of Legal and Regulatory Framework report completed

October 2009.

National Workshop on Alternative Mechanisms for Service Delivery

(AMSD) was held in November 2009. Representatives from three

regions in Province Banten presented preparations for the pilot

implementation of: Management Strengthening and Institution

Building for Local Public Service Providers.

Alternative Mechanism for Service Delivery (AMSD) activity was

successfully completed in December 2009. Final report submitted.

1 Rating refers to AMSD (phase 1).

Future reports will be rated according

to achievement of milestones/target

of phase 2: Management

strengthening and institution building

for local public service providers.


December 2009

17



ACN 4/2009 on: Management Strengthening and Institutional

Building for Public Service Delivery was approved. This builds on

phase 1 (AMSD). Mode of execution is GOI executed (86%) and

World Bank executed (14%). Detailed budget and ToR for GoI

executed component has been completed.

For WB executed component, several TORs for study and recruitment

of consultants are being prepared, including for a baseline study on

women‟s access to public services.

1.4. Improved public service

delivery by selected local

governments in border

areas

Action plans for improved

public service delivery

completed by selected local

governments in border areas

ACN 8/2009 on Institution Building for the Accelerated Development

of Border Areas, approved. This ACN combines both Bappenas (WB

executed) and MoHA activities (GOI and WB executed).

The budget and ToR for MoHA (GOI executed) activities are being

finalized.

This links to activity 4.3. on economic development planning in

border regions in order to provide integrated support to these regions

by linking Bappenas, MoHA and the Ministry of Disadvantaged

Regions.

X Through this activity both MoHA and

Bappenas seek to strengthen cross-

ministerial institutions, such as

the National Agency for the

Management of Border Regions,

which manage and develop border

regions as well as to improve policy

for development of border regions.

Initial work for Bappenas is being

implemented by a consultant. A

qualified implementing agency is

being identified to implement the

larger part of the work that is planned

to commence in January 2010. An

additional implementing agency will

be contracted to undertake services to

meet MoHA requirements.

1.5. Improved local

government systems for

dissemination and

replication of good

practices in service

delivery

National policy on good

practices issued

Comparative analysis of ongoing good practice programs in Indonesia

completed in April 2009.

MoHA has held several rounds of consultations on a draft

permendagri (ministerial regulation) on Best Practices.

The project implementation consultants presented a mid-term report 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. As they failed to comply, the project

was closed with effect from 31 October 2009.

4 Project implementation was

handicapped by key members of the

selected consultancy team not being

available as proposed and poor

compliance to ToRs.

MoHA (Directorate for Capacity

Building and Local Government

Performance Evaluation) expressed

dissatisfaction with activity

performance. As a consequence, the

project was closed on 31 October

2009.

December 2009


18



1.6. Local governments adopt

effective, efficient and

accountable regulations

and processes for

business licensing

Local government

performance in

implementing OSS for

business licensing

The project has successfully delivered all outputs expected in the

current year‟s work-plan, with regard to both One Stop Shops (OSS)

for business licensing and use of Regulatory Impact Assessments

(RIA).

At the national level, key achievements include:

(1) Revised National OSS Guidelines, issued through circular letter

No 500/1101/V/BANGDA on 8 June 2009 (2) National OSS

Curriculum, printed and issued in October 2009, and (3) National OSS

M & E framework, issued as BANGDA circular letter on October 30

2009, and (4) RIA Manual updated, published and issued by Bappenas

in August 2009.

At the sub-national level, the project‟s strategy of involving provincial

governments in promoting district level regulatory reforms is shown to

be the right direction in scaling up and monitoring OSS performance,

and in promoting the use of RIA.

To ensure the momentum of this work, a follow-on project has been

approved by the DSF Management Committee (ACN 15/2009).

These achievements to date put the project in a strong position to

achieve extension phase activities: milestone 1 (10% increase in OSS

operating under revised guidelines) by 2011, and to reach milestone 2

(25% scale up) by 2011, and the target (25% reduction in time

required for acquiring business licences) by September 2011.

1** A presentation of project

achievements to all key stakeholders,

including the DSF Management

Committee is scheduled for January,

2010. This meeting will reflect on

lessons learnt and discuss national

strategies to scale up the pace and

performance of sub national business

licensing reforms in order to improve

the overall business and investment

climate in the regions.

**The rating “1” refers to the work

completed in 2009. Subsequent

updates will refer to the project

extension which has been approved.

1.7. Improved understanding

of international best

practices, social political

dimensions, costs and

benefits and alternatives

for territorial reform

Evidenced based research

on territorial reform adopted

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

Process and Implications of the Social-Political Dimensions of

Territorial Reform: Case Studies from Sambas and Buton.

Costs and Benefits of Proliferation of Regions (Pemekaran)

analysis completed for MoF with key findings for fiscal transfer

formulas related to pemekaran, November 2007

Evaluation of the Proliferation of Administrative Regions in

Indonesia 2001-2007

Territorial Reform and People‟s Welfare: Finding Alternatives

Consultations and dissemination workshops with national and local

1 A Fiscal Agency Agreement (FAA)

with UNDP for coverage of work

under territorial reform, disaster

management, and sub national data

was operational until June 30, 2009.

UNDP submitted the final report

covering the entire body of work

under the FAA in December 2009.

The trust fund for the FAA has been

closed.


December 2009

19



multi-stakeholder forums were 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.

Output 2: Fiscal Decentralization and Capacity Development


2.1. The Ministry of Finance

Regional Financial

Information System

recording local

government budgets is

upgraded

Number and process of

data entry of local

government budgets

recorded in the Ministry of

Finance Regional Financial

Information System

DSF is supporting data entry of MoF‟s Regional Financial Information

System (SIKD) for Fiscal Year 2007 Support duration: May-August

2009.

Data entered and verified to date:

Budget data (APBD, 2009): 481 districts and municipalities (94

percent of total)

Realization data (LRA, 2007): 351 districts and municipalities (75

percent of total).

Two user manuals were prepared: data entry procedure intended for

data entry operators; and a guide for users to access the data.

ACN 12/2009 on Strengthening Data Provision to the Regional

Financial Information System by Sub-National Governments with

Stand-Alone Electronic Data Bases, approved by DSF MC in October

2009.

Scoping mission to 3 local governments in North Sulawesi to review

regional financial information systems carried out in December 2009.

Pilot activity to convert electronic data from the above districts and

municipalities to SIKD database at MoF is expected to be completed

by end of March 2010.

1 Rating refers to Phase 1 Future

reports will be rated according to

achievement of milestones/target

phase 2.

Data entry will be continued under

ACN12/2009.

Data from local governments will be

utilized as input to data conversion

exercise. Results from this exercise

will form basis for upcoming strategy

of electronic data transfer from local

governments to central government.

2.2. Improved fiscal

decentralization policy

Implementation of „Grand

Design of Fiscal

Decentralisation‟ across

government ministries and

local governments

Feasibility assessments of possible incentives for the grants system

including revenue-sharing intercepts as sanctions for poor

performance completed September 2008.

ACN 13/2009 ACN on Improving the Policy Framework for Fiscal

Decentralisation („Grand Design of Fiscal Decentralization‟ - GDFD)

approved by DSF MC in November 2009.

X In addition to clarifying and

specifying in more detail the policy

framework for fiscal decentralisation,

the support will also provide

analytical inputs for the revision of

Law 33/2004 on fiscal balance

between central government and local

governments.

Meeting is planned for January 2010

to discuss details of project

December 2009


20



implementation, oversight plan, and

strategy to expedite project

implementation.

2.3. National policy on local

government borrowing,

including issuance of

municipal bonds, adopted

Municipal bond issuance,

including credit worthiness

assessments

Review of Indonesian Civil Code on issues relating to debtor, creditor,

and bankruptcy/insolvency completed May 2009.

Review of Regulatory Framework and Best Practices Study on Local

Government Financial Emergency Procedures completed in December

2009.

Support for revision of Government Regulations GR 54/2005: Local

Government Borrowing and GR 57/2005: Local Government Granting

is complete. Draft revisions have been signed by the Ministry of

Finance and are currently being discussed with the Ministry of Law

and Human Rights.

Analysis and preparatory work for issuance of Jakarta and Bandung

bonds:

Technical assistance to the governments of Provinces DKI

Jakarta and Kota Bandung is underway

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.

Preparation of draft Perda (local regulation) for submission to

DPRD (local parliament) is underway.

ACN 6/2009 on Building Capacity for the Development of Sub-

National Government Capital Markets for Municipal Bonds was

approved.

Preparation of international workshop on municipal bonds is

underway.

2

Rating refers to Phase 1 activities.

Future reports will be rated according

to achievement of milestones/target

phase 2.

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.

Future support for the expansion is

foreseen, and will be funded as part

of ACN 6/2009 implementation. This

will continue current support until

February 2010.

Scoping missions to Kota Surabaya

and Province of Kepulauan Riau are

scheduled for February 2010. The

purpose of the missions is to review

local government readiness for

preparation of municipal bond

issuance.

2.4. Improved public financial

management by local

governments

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 and municipalities resulting in

report with recommendations completed June 2008. Empirical analysis on regional government investment in public

infrastructure based on audited financial data for 2004-2007

completed June 2009.

1

Rating pertains to Phase 1.

Phase 2 is currently on hold pending

further discussions with GOI.


December 2009

21



2.5. Government pro-poor

special allocation fund

(DAK) monitored and

evaluated

Monitoring and evaluation

reports completed on

expenditures of pro-poor

government fund in selected

local governments

ACN 3/2009 on Socialization and Pilot Implementation of Joint

Circular Letter (SEB) on Monitoring of Technical Implementation and

Evaluation of Use of Special Allocation Funds (DAK) approved by

DSF MC in July 09.

ToR for implementing firm has been prepared. Request for

expressions of interest (REOI) to select implementing firm advertised

in December. Procurement is underway.

X Meeting planned for January 2010 to

discuss details of project

implementation, oversight plan, and

strategy to expedite project

implementation. Modifications to

ToR are envisioned following the

meeting.

Output 3: Increasing Accountability


3.1. Effective legislative

processes, resource

allocation and oversight

functions demonstrated in

selected local legislatures

Number of provincial and

district MPs, including

women MPs, trained in

legislative processes,

budgeting and oversight

ACN 1/2009 on Capacity Strengthening for DPRD (Local

Government Legislatures) approved. Budget negotiations completed

with MoHA. World Bank procurement and financial management

assessments of UPD-MoHA completed.

Grant Agreement and Disbursement Letter approved by Procurement,

Financial Management, Disbursement, Legal, and Loan Department of

World Bank. Legal documents are ready for Country Director

signature and Ministry of Finance countersignature on behalf of the

Republic of Indonesia. Grant Agreement and Disbursement Letter,

signature pending extension of DSF MOU.

X Ministry of Home Affairs has worked

hard to prepare documents needed to

meet effectiveness conditions of the

Grant Agreement including a draft

project operation manual. MoHA has

also worked across sub-sections to

prepare information and form

management teams needed to finalize

the legal documents. These are

crucial aspects toward ensuring

effective implementation of Recipient

Executed grants.

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

ACN No. 9/2009 on Capacity Building through Decentralized

Education and Training (DET) approved 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:

(i) Short courses in country and the region

(ii) Study tours

(iii) Scholarships for Masters programs in decentralization

related studies in the UK.

The grant agreement for the scholarships program is being reviewed,

and financial management and procurement assessments are in

process.

X ACN 9/2009 has been divided into 2

grants: 1) scholarships and 2) short

courses and study tours

December 2009


22

Output 3: Increasing Accountability


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 on Government Training and Education Center

Development: Introducing Competency Based Standards for Improved

Public Service Delivery approved. Budget negotiations completed

with MoHA. World Bank procurement and financial management

assessments of Diklat completed.

Grant Agreement and Disbursement Letter approved by Procurement,

Financial Management, Disbursement, Legal, and Loan Department of

World Bank. Legal documents are ready for Country Director

signature and MoF countersignature on behalf of the Republic of

Indonesia. Grant Agreement and Disbursement Letter signature

pending extension of DSF MOU.

X

Ministry of Home Affairs has worked

hard to prepare documents needed to

meet effectiveness conditions of the

Grant Agreement including a draft

project operation manual. MoHA has

also worked across sub-sections to

prepare information and form

management teams needed to finalize

legal documents. These are crucial

aspects toward ensuring effective

implementation of Recipient

Executed grants.

3.4. Improved public

accountability of local

governments delivered by

CSOs

Public accountability

mechanisms developed and

implemented by CSOs

The options paper requested by the DSF Management Committee on

local government engagement was completed and discussed at the

October 2009 DSF Management Committee meeting. The paper

described 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 included an annex with

geographical distribution of DSF local government activities. The

MC recommended Option 2) Local Government Consultative Group

reporting to DSF MC. This recommendation will be forwarded to the

DSF Steering Committee for approval. Pending approval, a small task

force will be formed to decide on the arrangements for implementing

the recommendation.

X Activity pending

In order to meet the objectives stated

in 3.4. it is recommended that an

activity addressing public

accountability mechanisms is added

to the DSF Work Plan 2009-2011

3.5. Improved knowledge

sharing on support to

local governments

Publicly accessible data

base on support to local

government developed and

number of development

forums and harmonization

activities facilitated

A donor mapping database created and made available online in

English and Bahasa Indonesia at

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

(i) Director PK-EKD in MoHA in August 2008 (ii) the donor

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

in MoHA in May, 2009, and (iv) Bappenas team from Aid for

Development Effectiveness Secretariat (A4DES) in September 2009.

The Bureau of Foreign Cooperation (AKLN) in MoHA was identified

as the host institution to administer and maintain the data base. AKLN

and DSF are jointly recruiting a consultant to be hired in January to

update the database content and transfer management to GOI.

1 This project is complete and has met

its objectives. The database is well

received and commended as a useful

tool for coordination and monitoring

of donor support to decentralization.

GOI is keen to incorporate the tool in

government system for monitoring

and reporting on development

assistance in decentralization.

DSF will continue to work with

AKLN to update and upgrade the

system.

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


December 2009

23

Output 4: Planning and Performance Measurement


4.1. Provincial and

district/municipal spatial

plans produced which are

in line with national

spatial plan and

integrated with provincial

and district/municipal

development plans

Provincial and

district/municipal spatial

plans completed and

approved by respective

parliaments

ACN2/2009 Capacity Building for Regional Development Policy

Formulation approved. Part 1 commenced in September 2009,

implemented by a team of five consultants. Completion by March

2010.

Part 2, draft terms of reference and proposed budget ($700,000) under

discussion. Implementation planned for April 2010-April 2011.

ACN 5/2009 on Institution Building for the Integration of National-

Regional Development and Spatial Planning approved. Consultant

contracted from December 2009 to March 2010. Procurement for firm

underway. Deadline for technical proposals extended to January 2010.

Joint evaluation by Bappenas/DSF. Implementation to commence by

end March 2010.

X This activity seeks to provide key input

into the formulation of regional

development strategies for each of the

seven major island groups.

It also seeks to contribute to the

capacity of national level agencies to

link planning documents, to improve

spatial planning alignment between

levels of government and to improve

local governments‟ capacity to produce

integrated planning documents.

4.2. Natural resource planning

and management policies

developed by targeted

local governments

Local governments

adopting policies and

systems for natural

resource planning and

management policy

ACN 10/2009 on Strengthening Local Government Natural Resource

Management Capability approved. Procurement underway for

implementing agency. Implementation to commence by April 2010.

X This activity seeks to improve the way

natural resources are managed by local

governments, thereby contributing to

local economic development

outcomes.

4.3. Local governments in

border regions have

improved capacity in

economic development

planning

Action plans for improved

economic development

planning completed by

selected local governments

in border areas

ACN 8/2009 on Institution Building for the Accelerated Development

of Border Areas approved. This ACN covers activities related to

border area development prioritized by both Bappenas and MoHA.

Bappenas activities are WB executed and MoHA activities are GOI

executed. A consultant has been contracted by WB to work with

Bappenas. Procurement is underway for a firm to implement the main

component of the activity. Currently awaiting submission of technical

proposals from short-listed firms. Joint evaluation by Bappenas/DSF.

Implementation to commence by end March 2010.

This links to activity 1.4 on service delivery in border regions in order

o provide integrated support to these regions by linking Bappenas,

MoHA and the Ministry of Disadvantaged Regions.

X Through this activity both MoHA and

Bappenas seek to strengthen cross-

ministerial institutions, such as

the National Agency for the

Management of Border Regions,

which manage and develop border

regions as well as to improve policy

for development of border regions.

Initial work for Bappenas is being

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 (GOI executed) to

undertake services to meet MoHA

requirements.

4.4. 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

“Improving Quality and Availability of Sub-National Statistics for

Local Decision Making & Streamlining the Flow of Statistics between

Regions and the Center” study completed in support of BPS and local

governments, January 2009.

1 This project is complete and has met

its objectives.

The findings from this project are

December 2009


24

Output 4: Planning and Performance Measurement


by BPS (Central Statistics

Agency)and participating

local governments

National and local level sectoral data system analysed for 19

governments (6 provinces, 4 kota, 9 kabupaten), January 2009.

Assessment of health data for 11 kabupaten/kota and assessment of

education data for 12 kabupaten/kota completed in January 2009.

Final report with 21 policy recommendations grouped in the categories

of:

System Design, Setup and Maintenance;

Promotion of Data Quality; Application of Information and

Communication Technology;

Human, Physical and Financial Resources; Strengthening of Data

Sharing, Analysis, and Utilization; and

Legislation and Regulation, May 2009.

BPS is using results of this activity in ongoing negotiations with WB

for National Statistics Capacity Building program (STATCAP) loan.

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.

Output 5: Improved Development Effectiveness in Eastern Indonesia


5.1. Increased cooperation and

harmonization among key

development stakeholders

including national and

targeted local

governments, NGOs

academics, donors, DSF

and private sector

Number of new

coordination networks

and harmonization and

sustainability initiatives

Facilitation of South Sulawesi government/donor coordination group

including 5 international development partners: quarterly meetings

email discussion list; and 3 joint field visits. 3 workshops supported for JiKTI (Eastern Indonesia research Network)

resulting in agreement on priorities, including researcher capacity

building and future directions. Most recent workshop resulted in:

showcasing progress of JiKTI supported: Revitalizing

Knowledge Sector for Development Policy Program

(RSPKP)-BAPPENAS ;

future collaboration with AusAID to strengthen research

quality and develop evidence-based policy in Eastern

Indonesia.; and

increased alignment with Head of Bappeda Forum (Regional

Development Planning) in order to align findings and results

of research with the needs of Heads of Bappeda Forum.

Infrastructure and support to maintain an active mailing list for sharing

research opportunities, research papers and other relevant information

for JiKTI members.

1

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.

SOfEI‟s excellent relationship 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.


December 2009

25



7 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 was completed, published

and disseminated.

3 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 including

quarterly meetings to ensure structured and sustainable foundation

through joint activities and facilitation of consistent provincial

government leadership. Most recent meeting 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 per month 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 the site was re-launched in August 2008.

Circulation of BaKTI News is 2,500 per month with estimated read on

rate of 5 readers per copy. 2009 survey indicates more than 75% of

readers were satisfied with BaKTI News promotion of good practices

and improved development knowledge. More than 40% of those

surveyed had applied ideas from BaKTI News in their work.

Anecdotal and questionnaire responses suggest that smart practices

promoted by SOfEI are being replicated in other regions, e.g. Yayasan

Siwa Lima, Ambon. Maluku Province reported that an article in

BaKTI News about cocoa cultivation developed by IFC PENSA led to

a cocoa sustainability partnership between the two groups. Some

methods of health mapping initiatives in Luwu Timur published in

BaKTI News have been replicated in Mamuju district, West Sulawesi.

BaKTI facilitated media tour and series of discussions on development

issues in Eastern Indonesia in cooperation with national newspapers

1

December 2009


26



and TV stations is underway.

Photo exhibition (October – December 2009) on the dynamics of

development in Eastern Indonesia including smart practices facilitated

by SOf IE in collaboration with the Alliance of Independent

Journalists(AJI). More than 50 photos were displayed during the

exhibition at Makassar International Airport. This exhibition received

good coverage from local and national media.

The Eastern Indonesia Portal was soft launched in November 2009.

The knowledge sharing portal is called batukar.info (exchanging

information) and it is a user generated content website. 25 people have

contributed articles to the portal since the launch and there are

currently 72 members. Current hits for batukar.info total more than

1000 hits per 3 days. Batukar.info has been publicized in BaKTI News,

Facebook and through mailing lists. Official launch is planned for

January 2010

BaKTI News launched a number for SMS communications from

readers including comments, complaints and contact data updating.

Response has been positive.

Handbook of smart practices was completed and published and is being

disseminated.

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 4th semi-annual meeting of Eastern Indonesia Provincial

Heads of BAPPEDA dialogue with BAPPENAS on National Medium

Term Plan, 2010 - 2014. Priorities identified were taken forward to the

national level Development Planning Consultations (Musrenbangnas).

The consultation / synchronization workshop of the Eastern Indonesia

Region Development Planning on National Medium Term

Development Planning (RPJMN) for 2010-2014 using a

Regional/Island-based approach was conducted in collaboration with

Bappenas. This is the first socialization workshop held outside Jakarta.

Local Government, NGOs, academics and private sector

representatives from 12 provinces in Eastern Indonesia participated in

the workshop to provide inputs for the formulation of the Eastern

Indonesia development strategies for RPJMN 2010-2014.

DPRD in Central Sulawesi supported to ensure effective discussion and

timely passage of the provincial Budget for 2008.

A poverty mapping program supported by SOfEI and UNICEF has

been replicated in all sub-districts in two districts in West Sulawesi and

1 The Eastern Indonesia Forum

Conference in August 2010 is

expected to identify priority policy

issues that will become a focus for

future SOfEI efforts for policy

influence. The identified issues that

need to be a focus include: 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); and the importance of data

in policy making.


December 2009

27



is planned to be replicated in all districts and municipalities in West

Sulawesi in 2009.

2 Eastern Indonesia Forum regional policy dialogues held with DSF to

discuss and promote policy priorities for the region.

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.

Good media coverage, feedback from Forum participants positive.

One smart practice from the Eastern Indonesia Forum is being

documented in a documentary film. The film will be launched along

with a discussion and campaign on related issues (energy and

electricity in Sulawesi and Eastern Indonesia). The film will be

promoted in National Media to provide special coverage on

development issues in Eastern Indonesia where BakTI plays an active

role as an information resource.

December 2009


28


September 2009


December 2009

29 29

Annex B: Financial Report

Summary

Donor Contributions: Three donors have pledged a total of USD 45.08 million

(exchange rate December 31, 2009).

Commitments: USD 42.63 million or 95% of total pledges has been allocated to

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

Disbursements: USD 15.93 million or 35.34% of total contributions pledged or

37.37% of allocations.

Remaining Funds: USD 121,707 in unallocated and uncommitted funds after

taking into account probable postponement or withholding of GBP 2 million.

I. Donor Contributions

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

CIDA. Total pledges amount to USD 45.08 million (31 December 2009 exchange rate).

About 96.67% of the total amount (USD 43.58 million) has been pledged by DFID. As of

31 December 2009, DSF had received USD 29 million or 64.33% of total pledges (see

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

from CIDA.

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

Contributors Contribution

Currency

Contribution

Amount USD equivalent

Cash Received

in USD million

DFID GBP 24.36 43.58 27.50

AusAID USD 1.00 1.00 1.00

CIDA CAD 0.50 0.50 0.50

Total

45.08 29.00

II. Fund Allocations and Commitments

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: Fund Allocations and Commitments to 31 December 2009

Budget (USD)

Total Pledges 45,079,372

Investment income (as of December 31, 2009) 1,355,913

Projected Administration fee (1% of total pledges) (450,794)

Other Income (as of December 31, 2009) 24,754

Total Available Funds 46,009,245

Fund Allocations approved in January 2007 21,298,513

Focal Area 1 2,968,714

Tax Assignment and Own-source Revenue -


September 2009 December 2009


30 30

Budget (USD)

Transfer 350,000

Borrowing 600,000

Surplus and Reserves 275,000

Data for Monitoring and Evaluation 480,000

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

Fiscal Agency Intergovernmental Framework Fund[1] 476,214

Exploring Future Reform Options in Functional Assignment 55,000

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

Alternative Mechanism of Service Delivery 200,000


Local Government Performance Measurement 187,174

Identification and Replication of Good Practice 478,000

Appraisal : Sub national Investment Climate Reform 600,000

Knowledge Management for Effective Local Government Support Programs 375,500

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

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


National Program for Community Empowerment 1,072,961

CDD Summit 421,705

Policy Development for PNPM 58,666

Cost Accounting Review for CDD Programs 16,512

Technical Assessment for CDD Programs 53,685

Information, Education and Communication for PNPM 484,739

User Fee Assessment for CDD Programs 419,000

MIS Improvement for PNPM 106,000

Short Term Monitoring and Evaluation 710,385

Medium / Long Term Monitoring and Evaluation 399,926

CCT Baseline Survey 1,669,665

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

Quick starts 97,908

DSF Operations and staffing to December 31, 2009 7,700,000

Staff costs 4,200,000

Operations costs 3,500,000

Approved Work Plan 2009 - 2011 (1st round) 10,890,520

ACN 1/2009: Capacity Strengthening Program for DPRD (Local Government

Legislatures)

500,000

ACN 2/2009: Capacity Building for Regional Development Policy Formulation 150,000

ACN 3/2009: Improving and Piloting the Implementation of Monitoring and

Evaluation System of Special Allocation Funds Utilization

550,000

ACN 4/2009: Management Strengthening and Institution Building for Local Public

Service Providers (MSIB-LPSP)

500,000


September 2009


December 2009

31 31

Budget (USD)

ACN 5/2009: Institutional Building for the Integration of National Regional

Development and Spatial Planning

500,000

ACN 6/2009: Building Capacity for the Development of Sub-National Government

Capital Markets for Municipal Bonds

900,000

ACN 7/2009: Government Training and Education Centre Development: Introducing

Competency Based Standards for Improved Public Service Delivery

797,000

ACN 8/2009: Institution Building for the Accelerated Development of Border Areas 500,000

ACN 9/2009: Capacity Building through Decentralization Education and Training

(DET) for Public Service Delivery

1,593,520

ACN 10/2009: Strengthening Local Government Natural Resource Management

Capability

750,000

ACN 11/2009: Formulation of Norms, Standards, Procedures and Criteria (NSPK) for

Local Government Service Delivery

1,000,000

ACN 12/2009: Strengthening Data Provision to the Regional Financial Information

System by Sub-National Governments with Stand-Alone Electronic Data Bases

250,000

ACN 13/2009: Improving the Policy Framework for Fiscal Decentralization 900,000

ACN 14/2009: Costing and Pilot Implementation of Minimum Service Standards 1,200,000

Other Allocations (Priority Area 2 approved allocations) 800,000

Approved DSF Work Plan 2009 - 2011 (2nd round) 7,650,000

DPRD Orientation 500,000

Regional Development Policy 700,000

Local Government Evaluation 300,000

Inter-Regional Cooperation 1,000,000

Regional Finance 850,000

Provincial Government Support Program 2,000,000

Regional & Local Economic Development 600,000

Sub-National Business Climate Reform 1,000,000

Grand Design on Implementation of Regional Autonomy 700,000

Approved additional DSF Executive Operations Work Plan 2009 - 2011 2,788,505

Knowledge Management for Aid Effectiveness 700,000

DSF Executive Operations 1,502,043

Additional donor contribution for DSF Operations 586,462

Total allocations to programming & DSF Executive staffing & operations 42,627,538

Total Unallocated and Uncommitted Funds[2] 3,381,7071

[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.

1 The probable postponement or withholding of GBP 2 million in the current financial year will reduce this

figure to USD121, 707.




32 32

III. Disbursement Status

To date, DSF has received USD 30.38 million, consisting of USD 29 million of donor

contributions (64.33% of total pledges) and USD 1.35 million of investment income. As of

December 31, 2009, USD 15.64 million had been disbursed to work streams and

operations. In addition, a total of USD 290,001 has been charged as WB administration fee

(see Table 3).

Focal Area 1 (Strengthening Inter-Governmental Framework) has disbursed USD 2.08

million or 70% of the total approved budget of USD 2.97 million. There are signed

commitments of USD 107,411.

Focal Area 2 (Support to Sub-National Entities) has disbursed USD 1.26 million or 70%

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

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

Identification and Replication of Good Practices – operated throughout the reporting

period. For both projects, disbursements are expected to be spread evenly throughout the

project year.

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

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

million, has been returned to unallocated funds.

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

disbursed USD 5.37 million or 99.26% of the total approved budget of USD 5.41 million.

Signed commitments of USD 11,985 are expected to be disbursed in next quarter.

Table 3: Disbursement Status of the DSF as of December 31, 2009

Budget

(USD)

Disbursement

(USD)

Commitments

(USD)

Receipts

Paid in Contributions 45,079,372 29,000,052

Investment Income 1,355,913

Other Income 24,754

Total Receipts 45,079,372 30,380,719

Disbursements

Fund Allocations approved in January 2007

Focal Area 1 2,968,714 2,081,019 107,411

Tax Assignment and Own-source Revenue * - - -

Transfer 350,000 90,754 -

Borrowing 600,000 535,452 50,644

Surplus and Reserves 275,000 179,505 3,600

Data for Monitoring and Evaluation 480,000 306,366 7,557

Assessing and Revising the System for Setting Territorial

Boundaries

227,500 227,500 -

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

Exploring Future Reform Options in Functional Assignment 55,000 47,467 4,301

Supporting the Establishment of Financially Feasible Minimum

Service Standards

305,000 47,920 11,396

Alternative Mechanism of Service Delivery 200,000 169,842 29,913


September 2009


December 2009

33 33

Budget

(USD)

Disbursement

(USD)

Commitments

(USD)

Focal Area 2 1,808,059 1,264,158 227,117

Local Government Performance Measurement 187,174 187,174 -

Identification and Replication of Good Practice 478,000 382,392 95,598

Appraisal : Sub national Investment Climate Reform 600,000 469,325 129,791

Knowledge Management for Effective Local Government

Support Programs

375,500 57,882 1,728

Mapping and Analysis of Local Planning and Budgeting

Processes

49,703 49,703 -

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

Focal Area 3 5,413,244 5,372,315 11,985

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

CDD Summit 421,705 421,705 -

Policy Development for PNPM 58,666 58,666 -

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

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

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

User Fee Assessment for CDD Programs 419,000 390,395 -

MIS Improvement for PNPM 106,000 93,676 11,985

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

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

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

Decentralization Support for Eastern Indonesia (SofEI) 3,310,588 2,819,363 66,118

Quick starts 97,908 97,908 -

Project Operations 7,700,000 4,001,501 121,714

Staff costs 4,200,000 2,197,219 -

Operation costs 3,500,000 1,804,282 121,714

Approved Work Plan 2009 - 2011 (1st round)

New projects approved and registered in FY09 (1st round) 3,600,000 6,780 106,323

Strengthening Data Provision to the Regional Financial

Information System by Sub-National Governments with Stand-

Alone Electronic Data Bases

250,000 - -

Improving and Piloting the Implementation of Monitoring and

Evaluation System of Special Allocation Funds Utilization

550,000 - -

Improving the Policy Framework for Fiscal Decentralization 900,000 - -

Institutional Building for the Integration of National Regional

Development and Spatial Planning

500,000 - 8,905

Capacity Building for Regional Development Policy Formulation 150,000 3,614 92,467

Institution Building for the Accelerated Development of Border

Areas

500,000 3,166 4,950

Strengthening Local Government Natural Resource Management

Capability

750,000 - -

Approved DSF Work Plan 2009-2011 in process of

registration (1st round)

7,290,520

Approved DSF Work Plan 2009 - 2011 (2nd round) 7,650,000




34 34

Budget

(USD)

Disbursement

(USD)

Commitments

(USD)

Approved additional DSF Executive Operations Work Plan

2009 - 2011

2,788,505

Total Project Disbursements 42,627,538 15,643,043

Administration fee 450,794 290,001

Total Disbursements 43,078,332 15,933,044

Outstanding commitments 640,668 640,668

Total Cash Available (= Funds receipts - Disbursements -

Commitments)

13,807,007

Support Office for Eastern Indonesia (SOfEI) has disbursed USD 2.82 million or 85% of

the total USD 3.31 million approved budget. Signed commitments amounting to USD 66K

for activities completed before December 31, 2009 will be paid in the next quarter.

For DSF operations, USD 4 million has been disbursed. This includes office and project

operations as well as staff costs.

Outstanding commitments: as indicated in footnote 5 above this refers predominantly to

formal contractually-based financial commitments. Such commitments amount to USD 6.4

million in DSF operations, including staff contracts over the life of the DSF plus the

existing programmatic contracts of USD 640,668.

Total cash available as of December 31, 2009 is USD 13.81 million. These funds are fully

committed, that is, either in the process of being allocated to child TF or earmarked for

such allocation – for programming and for DSF Executive staffing and operations.

Outlook

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

portfolio of projects. The Fund expects to disburse USD 6.56 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 March 31,

2012.

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

Actual per

Dec. 31,

2009

Year ended

June 30,

2010 (USD

million)

Year ended

June 30,

2011 (USD

Million)

Projections as

of Mar. 31,

2012 (USD

million)

Expected Receipts

Projected Cash Remaining from prior

period

0 13.81 16.58 13.33

Paid in Contributions

DFID 27.5 9 7.08 0

AusAID 1 0 0 0

CIDA 0.5 0 0 0

Cash Receipt during current period 29 9 7.08 0

Investment Income 1.35 0.42 0.33 0

Other Income 0.03 0 0 0


September 2009


December 2009

35 35

Actual per

Dec. 31,

2009

Year ended

June 30,

2010 (USD

million)

Year ended

June 30,

2011 (USD

Million)

Projections as

of Mar. 31,

2012 (USD

million)

Expected Cash Available to DSF TF 30.38 23.23 23.99 13.33

Disbursements

Focal Area 1 2.08 0.89 0 0

Focal Area 2 1.27 0.55 0 0

Focal Area 3 5.37 0.04 0 0

Eastern Indonesia projects (SoFEI) 2.82 0.08 0 0

Quick starts 0.1 0 0 0

Project Operations 4 1.4 3.3 2.3

Priority Area per FY09

Public Services 0 0 3.2 1.5

Fiscal Decentralization 0 1.7 0.9 1.55

Planning and Performance

Measurement

0 1.9 0.3 3.6

Governance Reform 0 0 2.89 1

Total Project Disbursements

(Projections)

15.64 6.56 10.59 9.95

Administration fee 0.29 0.09 0.07 0

Total Disbursements (Projections) 15.93 6.65 10.66 9.95

Outstanding commitments 0.64 0 0 0

Total Cash Available for subsequent

year(s)

13.81 16.58 13.33 3.382

2 The probable postponement or withholding of GBP 2 million in the current financial year will reduce this

figure to USD121,707.




36 36

Annex C: List of Acronyms

ACCESS = Australian Community Development & Civil Society Strengthening Scheme

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

DPRD)

ADS = Australian Development Scholarship

AMSD = Alternative Mechanisms of Service Delivery

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

AusAID = Australian Agency for International Development

BAKTI = Bursa Kawasan Timur Indonesia (East Indonesia Exchange)

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

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

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

BPMD = Badan Pengembangan Masyarakat Desa (Community Empowerment Agency)

CCT = Conditional Cash Transfer

CDD = Community Driven Development

CIDA = Canadian International Development Agency

CIPSED = Canada Indonesia Private Sector Enterprise Development

CSO = Civil Society Organization

DFID = Department for International Development

DG = Director General

DKI = Daerah Khusus Ibukota (Jakarta Special Region)

DSF = Decentralization Support Facility

EIP = East Indonesian Portal

EKPPD = Evaluasi Kinerja Penyelenggaraan Pemerintah Daerah (Local Government Performance

Evaluation)

ETC = Extended Term Consultant

FAA = Fiscal Agency Agreement

GDS2 = Governance and Decentralization Survey 2

GOI = Government of Indonesia

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

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

IDPL = Infrastructure Development Policy Loan

IFC = International Finance Cooperation

ILO = International Labor Organization

IPEA = Initiative for Public Expenditure Analysis

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

KDP = Kecamatan Development Program

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

Autonomy Implementation)

LGPM = Local Government Performance Measurement

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

M&E = Monitoring & Evaluation

MC = Management Committee

MDG = Millennium Development Goal

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

and Budgeting)

MOF = Ministry of Finance

MOHA = Ministry of Home Affairs

MOU = Memorandum of Understanding


September 2009


December 2009

37 37

MSS = Minimum Service Standard

NCG = Nordic Consulting Group

NGO = Non-Government Organization

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

NTB = Nusa Tenggara Barat (West Nusa Tenggara)

NTT = Nusa Tenggara Timur (East Nusa Tenggara)

OSS = One Stop Shop

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

Updating)

PEACH = Public Expenditure Analysis and Capacity Enhancement

PEMDA = Pemerintah Daerah (Local Government)

PMD = Pembangunan Masyarakat Desa (Local Community Development)

PMK = Peraturan Menteri Keuangan (Finance Minister Regulation)

PNPM = Program Nasional Pemberdayaan Masyarakat (National Program for Community

Empowerment)

PSF = PNPM Support Facility

RED = Regional Economic Development

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

RTI = Research Triangle Institute

SC = Steering Committee

SOFEI = Support Office For East Indonesia

STC = Short Term Consultant

TA = Technical Assistance

TAF = The Asia Foundation

TF = Trust Fund

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

UNDP = United Nations Development Program

UNICEF = United Nations Children's Fund

WB = World Bank

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




38 38

Documents

DSF Quarterly Report December 2009