Supervision of Village Funds Needs Strengthening

The case of alleged fictitious villages receiving village funds from the central government is a warning that the funds’ supervision and verification needs strengthening. The distribution of village funds contains loopholes that allow fraud.

KOMPAS/SAIFUL RIJAL YUNUS

Tanggundipo village head Bundusila shows a map of Uepai district on Wednesday (6/11/2019) at his residence in Tanggundipo village, Konawe, Southeast Sulawesi. The village is not on the regional map, and is instead said to be the nonexistent Uepai village, which has allegedly prompted a number of crooked individuals to misuse the village funds.

JAKARTA, KOMPAS – The revelation that nonexistent, fictitious villages in several regions are receiving the village funds is a warning that the supervision and factual verification processes in distributing the village funds urgently needs to be strengthened. This must be done to ensure that the village funds, which aim to promote equal welfare through community empowerment, are used effectively and contain no room for misuse.

The village funds, a government priority program, continue to increase from year to year, from Rp 20.8 trillion (US$1.49 billion) in 2015 to Rp 69.8 trillion in 2019, and to Rp 72 trillion in 2020 for around 74,900 villages in the country.

Finance Minister Sri Mulyani Indrawati initially exposed the issue of fictitious villages at the House of Representatives earlier this week (Kompas, 7/11/2019).

Thirty-four villages were deemed problematic in Konawe regency, Southeast Sulawesi. The village establishment decrees for 31 actual villages in the regency were found backdated to before the Home Ministry issued its moratorium, which is a violates eligibility procedures for the village funds.

Thirty-four villages were deemed problematic in Konawe regency, Southeast Sulawesi.

The three other villages – Ulu Meraka village in Lambuya district, as well as Uepai and Moorehe villages in Uepai district – were fictitious, but continued to receive the village funds. Konawe regency’s Village Empowerment Agency, however, claims that the central government’s village funds allocation was not disbursed to these villages.

The Home Ministry and the police are investigating Konawe to determine whether the case involved only administrative violations or were criminal.

The Corruption Eradication Commission (KPK) supports the Southeast Sulawesi Police’s move.

KOMPAS/SAIFUL RIJAL YUNUS

A weatherworn gate marks the entrance of Tanggondipo village, as seen on Wednesday (6/11/2019) in Uepai district, Konawe, Southeast Sulawesi. The Southeast Sulawesi Police are investigating Tanggondipo in connection with the village funds that have been distributed to the nonexistent Uepai village.

KPK chief Agus Rahardjo said in Kendari on Thursday (7/11/2019) that the antigraft body was monitoring the police investigation into the disbursement of village funds to fictitious villages.

The Home Ministry\'s Village Administration Management director, Nata Irawan, said separately that the ministry was prepared to remove the fictitious villages from the registry once the investigation by the ministry, the Southeast Sulawesi Police and the prosecutors\' office had concluded.

"If there are indeed data and administrative errors, we will erase the villages," Nata said.

Open loopholes

The Supreme Audit Agency (BPK) also highlighted problems in the allocation and management of the village funds. In its audit report for the second half of 2018, the BPK found that municipal and regency administrations were not using the latest data in allocating and distributing the village funds.

If there are indeed data and administrative errors, we will erase the villages.

Furthermore, the municipal and regency administrations were not considering the difficulty index on geographical terrain when allocating the village funds. As a result, the allocations did not meet the actual amounts that the villages should have received.

Regional Autonomy Watch (KPPOD) executive director Robert Endi Jaweng said that data gathering for villages was the source of the problem in the village funds being allocated to fictitious villages. Gathering data on villages was the responsibility of the Home Ministry, which manages the national village registry.

Robert said that the village funds allocation procedure was strict, but contained loopholes that could be abused. The village funds were disbursed in three stages – 20 percent in January, 40 percent in March and 40 percent in July – and that the next disbursement was remitted only when the village administration had submitted a budget report on the previous disbursement. The report must provide figures as well as activities under budgetary outputs.

KOMPAS/SAIFUL RIJAL YUNUS

An official of Lambuya district points to Meraka village on a chart listing the district’s villages and village heads on Wednesday (6/11/2019). The village funds registry lists Ulu Meraka village, which does not exist.

Robert said that the village funds distribution system was relatively good, but that problems persisted in its implementation. The verification of village funds budget reports was poor or nonexistent. This was why the problems in the distribution of village funds had only been uncovered now.

Indonesia Corruption Watch deputy coordinator Agus Sunaryanto said that in several cases, the misuse of village funds was due to a lack of supervision in its disbursement and use. Many stakeholders were only concerned about budget absorption and that they viewed accountability as a mere formality. "Supervision does not exist," he said.

KPK prevention deputy Pahala Nainggolan confirmed Agus’ statement, and said that the KPK had also discovered the disbursement of village funds to fictitious places. Accountability was treated as a mere administrative formality and did not involve field verification.

Village data collection

House of Representatives Commission II deputy chair Arif Wibowo, from the Indonesian Democratic Party of Struggle (PDI-P) faction, said that control was lacking from the Home Ministry in monitoring and verifying village data collection. Errors in data collection provided the loopholes that led to the disbursement of village funds to fictitious villages. This could even be a new means of corruption.

In addition, regional autonomy observer Djohermansyah Djohan said that new villages might emerge as a result of mismanagement in the village funds.

“Establishing villages [by] dividing existing villages would be prone to various distortions and deviations. This would then lead to [the emergence] of fictitious villages as a result of the haphazard establishment of villages," he said. (JAL/NIK/IAN/AGE/KRN/SHR)