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Lesson
Flexibility in design. Fiscal decentralization is the process of decentralizing revenue raising and expenditure of moneys to a lower level of government while maintaining financial responsibility. The process is complex and involves major changes to the legal and regulatory framework, institutional arrangements, and human capacity. Hence, sufficient time must be allocated to program implementation. Design flexibility is also a key consideration.

Project Number: 42208-013, 38264-013
Project Name: Second Local Government Finance and Governance Reform Program - Subprograms 1 and 2: Program Completion Report
Report Date:
Lesson
The adoption of the National Action Plan for Fiscal Decentralization (NAPFD) by the Ministry of Finance (MOF) laid the foundation for developing the Directorate General (DG) Fiscal Balance's blueprint for institutional transformation. The policy design of the blueprint has also benefited from inputs by ADB and other donors. Through the development of this blueprint, the government now has a set of long-term objectives to guide and shape medium-term policy design and implementation. ADB is currently a member of an informal development partners working group on decentralization.

Project Number: 42208-013, 38264-013
Project Name: Second Local Government Finance and Governance Reform Program - Subprograms 1 and 2: Program Completion Report
Report Date:
Lesson
Under LGFGR2, the government adopted legal, policy, and institutional measures, and established supporting infrastructure. Many of the concepts were relatively new and therefore required extensive consultation and coordination to ensure stakeholders' understanding, acceptance, and adoption of the new measures. Substantial technical assistance (TA) support was necessary to ensure that best practices were incorporated and then consolidated throughout implementation to achieve the intended results.

Project Number: 42208-013, 38264-013
Project Name: Second Local Government Finance and Governance Reform Program - Subprograms 1 and 2: Program Completion Report
Report Date:
Lesson
There may be merit in carefully reviewing donor coordination mechanisms to determine if there are more effective ways to coordinate structural and sector programs. If alternative approaches to achieving the same high level of coordination could be formulated, such techniques may allow more resources to be dedicated to each donor's programs and thereby increase the likelihood they will succeed.

Project Number: 43211-013
Project Name: Sixth Development Policy Support Program
Report Date:
Lesson
Numerical targets such as gross domestic product growth rate and poverty incidence should be used with caution, as a global financial crisis can adversely and unexpectedly affect achievement of these targets, as was the case under Development Policy Support Program - 6.

Project Number: 43211-013
Project Name: Sixth Development Policy Support Program
Report Date:
Lesson
The program framework has proven successful in enabling the use of a flexible medium term framework that promotes ownership by the government, as was evident in the Development Policy Support Program (DPSP) series. In addition, the medium-term framework allows changing government priorities to be successfully incorporated, as occurred under DPSP-6.

Project Number: 43211-013
Project Name: Sixth Development Policy Support Program
Report Date:
Lesson
No additional lessons

Project Number: 35144-012, 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
No additional lessons

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Although the project met performance targets and indicators, substantive support was provided by the Investment Loan Monitoring Unit (ILMU) and the technical assistance (TA) consultants to help the Ministry of National Education- Inspectorate General (MONE-IG) implement the scholarship program. The support ranged from administrative to monitoring and evaluation, and quality assurance. As such, it was essential to have good coordination between BAPPENAS, as the executing agency, and the MONE-IG, as the implementing agency.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Each year, the project encountered a delay in budget allocation or Daftar Isian Penggunaan Anggaran (DIPA) release, which resulted in delays in implementing planned activities. This could have been avoided if the government had allowed multi-year budget earmarking, given that the project was funded by a multi-year loan. Since this has been identified as a broad systemic issue affecting other projects, this is also being addressed in the Country Portfolio Review Mission jointly held by ADB and Badan Perencanaan dan Pembangunan Nasional (National Development Planning Agency) or BAPPENAS.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Project implementation would be driven more speedily by champions or agents of change. As experienced in other projects, strong ownership and leadership are the key to a successful project. Through strong support from the BPK, all outputs and outcomes were achieved satisfactorily. The Badan Pemeriksa Keuangan (Supreme Audit Board) or BPK was transformed through institutional and regulatory reform, supported by capable auditors.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
It was a challenge to administer the block grant mechanism for 50 BAWASDAs and Dewan Perwakilan Rakyat Daerah or Regional Parliament (DPRD) secretariats. All the BAWASDAs had to prepare institutional development plans (IDPs) for ADB approval in order to be eligible for grant funds. Subsequently, the BAWASDAs and the DPRD secretariats were required to coordinate with the MOHA-IG to ensure their budgets were included in MOHA-IG DIPA (the budget and the activities were prepared in accordance with the approved IDP). This process resulted in delays.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Too many project implementation units (PIUs) were operating, at both the central and regional level which implemented block grants.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
The other lesson learned was that this sort of vital reform measure, i.e., reorganizing the BPKP, should not have been pushed back as a condition for release of the second tranche. This appears to be a flaw in the program design. ADB should have insisted on reforming the BPKP step by step, making the government's agreement to reorganize the BPKP a condition for submitting the program for Board approval. Then government agreement to come up with a firm plan to reorganize the BPKP should have been made a condition for the release of the first tranche.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date:
Lesson
Implementing a reform program that involved cross-agency coordination and cooperation needed the country's highest political support, while this program was supported mainly by the Ministry of Finance (MOF) as part of its public financial management reform program. The MOF by itself appeared to lack support to push for downsizing the BPKP as contemplated under the program. In the end, the government appeared willing to sacrifice the second tranche in the interests of political expediency.

Project Number: 35144-013
Project Name: State Audit Reform Sector Development Program
Report Date: