Bisma Ramadhan Putra Winda (15312093)

Caesario Rizki Akbar (15312394)

Planning System in Local Government

Regulation of Regional Budget Planning

The integrated national planning system from the region to the center has not yet had any
binding rules. The introduction of regional autonomy policies and the abolition of the GBHN
(Guidelines of State Policy), which have been used as the foundation for planning, have implications
for the need for a policy framework which regulates a systematic and harmonious systematic national
development planning system. This is the basis for the issuance of Law no. 25 of 2004 on Development
Planning System (SP2N). Regional planning is regulated specifically in Law no. 25 of 2004 on National
Development Planning System. The law is regulated on the scope of regional planning, and the
procedures for the preparation of regional planning documents. Besides stipulated in Law 25/2004,
regional planning is also regulated in Law 17/2003, Law 32/2004 and Law 33/2004.

The four legislation suggests fundamental changes to regional planning and budgeting. Changes
contained in the law, among others:

1. Planning work programs and activities into a unity with the budget planning, so that the work
program and planned activities will be in accordance with the available financing capabilities.
Therefore long-term regional planning should be complemented by medium term
expenditure framework (MTEF) planning documents.
2. Hints to all agencies, agencies, agencies and offices to implement work programs and activities
based on the duties and functions of each agency / institution at every level of government.
3. Regional Budget (APBD) is managed based on work performance / performance budget,
meaning that work programs and activities implemented by using APBD must be formulated
clearly and measurably, its output and outcome.

In the preparation of APBD, the local government together with the DPRD should pay attention to
the general principles of APBD preparation, there are:

1. APBD is prepared in accordance with the needs of governance and local revenue capability based
on RKPD in order to realize services to the public for the purpose of the state.

2. APBD has the function of authorization means that the local budget becomes the basis for
implementing income and expenditure in the year concerned.

3. APBD has a function of planning means that local budgets become the guideline of local budget as
a guide for management in planning activities in the money year concerned.

4. APBD has an allocation function means that local budgets should be directed to create jobs / reduce
unemployment and waste of resources, and improve economic efficiency and effectiveness.

5. APBD has a supervisory function which means that the regional budget becomes a guide to assess
whether the implementation of local government in accordance with in accordance with the
stipulated.
Budget Planning Mechanism

There are some advantages about planning system in local government:

1. Reducing the burden of the local government.

2. Provides an opportunity for an area to grow independently.
3. Increasing the quality of service for an area in structured manner.
4. If there is problem happen in an area, it would be easier to be solved.
5. Local government take full control of its authority area.

However, besides all of the advantages faced by an area caused the existence of planning system in
local government, there are also several disadvantages:

1. The developing of every area does not same each other (depend on the resources in every
area).
2. The resources which is given by central government unequally distribute.
3. Lack of control by central government.
4. More risk about the abuse of the authority.
5. It is difficult to maintain from the central government.