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Second Wave of Local Governments to Receive Basic Education Capacity Grants

November 23, 2009

Jakarta 23 November 2009 – Twenty-five local governments are set to receive grants for capacity development in basic education governance following the signing of Letters of Agreement for Grants Chanelling between the Ministry of Finance, the Ministry of National Education, and 25 Basic Education Capacity Trust Fund (BEC-TF) partner districts today. 

The grants are part of the Basic Education Capacity Trust Fund’s (BEC-TF) commitment to work with fifty local governments in nine provinces to manage education finance and information systems more effectively and transparently through 2012. The BEC-TF aims to support the Government of Indonesia in carrying out its education reform agenda, which includes: supporting an Education Thematic Dialogue Forum; improving governance, financial management, budgeting, and accountability in the education sector; and strengthening the education information management system. 

The BEC-TF capacity development grant comes from the Dutch Government (22 million Euro) and the European Commission (17 million Euro), managed by the World Bank and executed by the Ministry of National Education.  In September, the first wave of 25 local governments signed their agreements. The total of 50 districts was chosen through a selection and verification process within the Government.

Grant channeling to regional governments within the framework of central-region financial relation in the education sector, is highly appreciated by donor agencies.

“We believe that the BEC-TF will be major breakthrough in the way education support is provided to the district level. The new on-granting regulation is a big step forward and I would like to congratulate the Government with making this possible,” stated Dutch Ambassador Dr. Nikolaos van Dam.

“Basic education is the major sector of support for the European Commission in Indonesia. Our grant support to the BEC-TF aims in particular to help local governments in making efficient use of financial resources to improve education outcomes,” stated Julian Wilson, Ambassador/Head of Delegation of the European Commission.

Districts that are successful in developing their education governance will have the opportunity to receive performance-based grants provided by the SISWA (Sector Improvement through Sector Wide Approach) program in the future. SISWA is the Government of Indonesia’s basic education development framework in line with the medium term plan (RENSTRA) which covers key strategies and programs to improve access and quality basic education under the Ministry of National Education, Ministry of Religious Affairs, and Ministry of Home Affairs. By bringing development assistance under Government leadership to fund its own programs, SISWA will allow a harmonized approach which will strengthen the Government’s decentralized system by working through it.

According to Dr. Mae Chu Chang, Human Development Country Sector Coordinator for the World Bank, “We intend to maintain a strong focus on working with the Government to increasingly emphasize performance management and institutional strengthening, and this program which starts with Basic Education Capacity and will continue through SISWA is a great example of the way the World Bank would like to work with the Government in the future.”


Grant Channeling

The Ministry of Finance Ministerial Regulation No. 168/PMK.07/2008 on Regional Grant stipulates that the Central Government may channel foreign grants to District Governments to conduct activities that fall under the district government’s authorities, or activities to improve government functions, improve basic public services, and empower district government apparatus.  Meanwhile, the District Government is responsible for managing the fund and executing the related activities transparently and accountably, through the regional budget mechanism and in line with relevant laws and regulations.  The signed letter of agreement states the grant’s objective, amount, sources, recipients, requirements, how it is channeled and used, reporting, monitoring, the rights and obligations of both the donor and the recipient, and the related sanctions.  The grant’s objective, amount, and the amount of a particular district’s matching fund are tailored to the characteristics of each respective district that receives the grant.

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