Minimal Budget Allocation and Restricted Deficit Regulation: Local Governments’ Compliance Assessment

Abstract

This study aimed to assess and evaluate the compliance and ability of Indonesian local governments to financial regulations  related to minimum budget allocations and deficit restriction. This study employed a qualitative based research method and involved 8 local governments in Aceh province. The data was collected through questioners, interviews and focus group discussions (FGD) participated by local government budgeting teams and budget officers in the education and health department.

 The data taken from July to September 2017. The study found that the local governments have mostly fulfilled the minimum budget allocation and maximum deficits while preparing their budget, although this task is not easy. Meanwhile, the minimum budget allocation regulation has been used by other departments to intervene budgeting in local governments and thus, a substantial allocation fund can be continue.