TAKENGON — The Audit Board of Indonesia (BPK) has highlighted the policy of the Aceh Tengah Regency Government in allocating grant expenditure to vertical agencies amounting to Rp17.27 billion repeatedly over three consecutive fiscal years.
Based on BPK's Audit Result Report (LHP) compiled by AJNN, the state audit institution recorded that local grant funds were consistently disbursed to the same recipients from the 2023, 2024, to 2025 fiscal years. This budgeting practice is considered contrary to the basic principles of regional financial governance, specifically regarding restrictions on grant allocations, which should not be provided continuously every year.
Violation of Grant Management Regulations
BPK emphasized that regional grant expenditure schemes are fundamentally regulated to be selective, subject to strict requirements, and non-binding or non-recurring across fiscal years, unless provided otherwise by laws and regulations. The periodic disbursement of grants to vertical agencies by the Aceh Tengah Regency Government is deemed inconsistent with prevailing regional financial management regulations.
In the audit report, BPK highlighted that grant budget allocations from the Aceh Tengah Regency Government continuously flowed to the same entities or vertical agencies between 2023 and 2025. This condition indicates sub-optimal compliance with regional budget governance regulations as well as weak internal oversight in the formulation of the Regency Regional Revenue and Expenditure Budget (APBK).
Implications Amid Fiscal Pressure
The policy of allocating grants worth tens of billions of rupiah came under sharp BPK scrutiny as it was carried out while the fiscal capacity of the Aceh Tengah Regency Government was experiencing severe pressure. Disbursing large amounts of budget to institutions outside the scope of local government is considered to risk disrupting priorities in fulfilling public spending and basic services for the local community.
According to BPK findings, these recurring allocations have the potential to burden Aceh Tengah's APBK posture, particularly at a time when the local government is required to implement budget efficiency and rationalization. BPK underscored the importance of the Regency Government's commitment to prioritizing spending allocations that directly impact local community welfare rather than routinely funding the needs of vertical agencies.
Recommendations for Governance Reform
Following the audit findings regarding the Rp17.27 billion grant allocation, BPK urged the Aceh Tengah Regency Government to immediately conduct a comprehensive evaluation of its regional grant budgeting mechanism. The Aceh Tengah Regency Government was requested to realign the APBK planning and approval process to ensure full compliance with statutory provisions on regional financial management.
BPK also stressed the importance of strengthening the role of the Regional Government Budget Team (TAPD) alongside the Aceh Tengah Regency Inspectorate in tightening the verification of grant proposals before approval. This reform is expected to halt non-compliant recurring grant budgeting practices while restoring financial governance accountability in Aceh Tengah Regency.
Reference source: AJNN – BPK Finds Rp17.27 Billion Grant Funds Allocated to Vertical Agencies in Aceh Tengah
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