Wednesday, October 7, 2009


This artikel discusses the Public Sector Accounting (Akuntansi Sektor Publik), from its history to the Public Sector Accounting Implementation in Indonesia.

Public Sector Accounting History
The history of public sector organizations in fact have existed for thousands of years ago. In his book, Vernon Thurs (1989) explained that the public sector accounting practices have actually existed for thousands of years BC. More influenced by its appearance on the interaction occurs in society and social forces within society. Social forces of society, which generally form the government. These public sector organizations, can be classified in:
  1. The spirit of capitalization (Capitalistic Spirit).
  2. Political and economic events (Economic and Politic Event).
  3. Technological innovation (Inovation Technology).

Aspects Philosophy Public Sector

From the Anglo-American variety of books, public sector accounting is defined as private accounting mechanisms applied in the practices of public organizations. From various old books publications of Western Europe, public sector accounting is the accounting rule. And various occasions referred to as public financial accounting. Various recent developments, the impact of the implementation than Accrual base in New Zealand, this understanding has changed. Accounting for the public sector is defined as the accounting of public funds. Accounting for public funds can be interpreted as: "... the mechanism accounting techniques and analysis applied to the management of public funds". From the above definition should be interpreted as a public fund of funds owned by the community - not the individual, which is usually managed by organizations of the public sector, and also on cooperation projects of public and private sectors. In Indonesia, public sector accounting can be defined: "... the mechanism accounting techniques and analysis applied to the management of public funds in higher institutions and state departments below, local governments, enterprises, public enterprises, NGOs and social foundations, as well as in project - cooperation projects of public and private sectors ".

Broadly speaking there are two main approaches that have fundamental differences. Both approaches are:

1. Traditional budget or a conventional budget
2. The new approach is often known as the New Public Management approach.

Traditional budgetary approach is most widely used in developing countries today. There are two main features in this approach, namely: (a) how to prepare a budget based on incrementalism approach and (b) the structure and composition of besifat budget line-items.
Another feature inherent in the traditional budget approach are: (c) tend to be centralized; (d) is the specification; (e) annual and (f) use the principle of the gross budget. Traditional budget structure with these characteristics could not disclose the amount of funds spent for each activity, and even the traditional budget fails to provide information about the amount of activity plan. Because of the unavailability of such information, then the only measure that can be used for the purpose of compliance monitoring is the use of budget levels.



The emphasis and the primary purpose is the traditional approach to supervision and centralized accountability. Traditional budget is incrementalism, which is only adding or subtracting the number of dollars in budget items that have been there before with the previous year using data as a basis to adjust the size of the addition or subtraction without in-depth studies carried out.
The main problem of traditional budget is related to the lack of attention to the concept of value for money. The concept of economy, efficiency and effectiveness are often not taken into consideration in the traditional budgeting. In the absence of attention to the concept of value for money of this, often at the end of the fiscal year budget excess pengalokasiannya then imposed on the activities actually less important to implement.
As a result of the use of historical cost of these services is an item, program, or activity will appear again in next year's budget despite the fact that these items are not relevant required. Changes in the budget just touched the nominal dollar amount adjusted for inflation, population, and other adjustments.


Another feature is the structure of the traditional budget is the budget line-item basis based on the nature (nature) of revenues and expenditures. Method of line-item budget is not possible to eliminate the revenue items or existing expenditure in the budget structure, although in fact the real specific items are no longer relevant for use in the current period. Because it is so, the use of traditional budgets do not allow for accurate performance assessment, because the only criterion that can be used is solely on the submission of the proposed use of funds.

Budgeting using line-item structure based on the reason for the orientation of the budget system is intended to control spending. Based on this, the traditional budget prepared on the basis of the nature of revenues and expenditures, such as government income from employers, income from taxes, or expenses for salaries, expenses for purchases of goods, and so on, rather than based on the objectives to be achieved with the expenditure.

Era of New Public Management
Since the mid-1980s has been public sector management changes quite dramatically from the traditional management systems that seem rigid, bureaucratic, and hierarchical modeling of public sector management more flexible and accommodate the market. These changes are not just small and simple changes. This amendment has changed the role of government especially in terms of the relationship between government and society. New paradigm that emerged in the public sector management is the approach of New Public Management.
New Public Management focused on public sector management performance-oriented, rather than policy oriented. The use of New Public Management paradigm raises some consequences for the government include the demands for efficiency, cutting costs (cost cutting), and the tender competition.

One model of government in the era of New Public Management is a model of governance proposed by Osborne and Gaebler (1992) who stated in his view known to the concept of "reinventing government". New perspectives of government according to Osborne and Gaebler are:

  1. Government catalyst: a focus on providing guidance rather than the production of public services. Government should provide a variety of public services, but not necessarily directly involved with the production process (producing). Production of public services by government must be made as an exception, and not a requirement, the government only produce a public service that can not be done by non-governmental parties.
  2. Government's community: empowering the community rather than serve. Government should give authority to the community so that they can become people who can help themselves (self-help community).
  3. Competitive Government: inject the spirit of competition in the provision of public services. Competition is the only way to save costs while enhancing service quality. With competition, many public services can be improved to increase the quality without the cost.
  4. The government is driven by the mission: to change the organization driven by regulations to be an organization that is driven by the mission.
  5. Results-oriented government: funding inputs rather than results. In the traditional government, the amount of budget allocation on a work unit is determined by the complexity of the problems faced. Increasingly complex problems faced, the greater the funds allocated.
  6. Customer-oriented government: meeting customer needs, not bureaucracy.
  7. Government entrepreneurship: able to create income and not merely to spend.
  8. Anticipatory government: to prevent than cure. Government bureaucratic traditional focus on the production of public services to solve public problems.
  9. Decentralized government: from hierarchy to participation and teamwork.
  10. Oriented government (mechanisms) market: a change with the market mechanism (incentive system) and not by administrative mechanisms (procedures and enforcement systems). There are two ways of resource allocation, the market mechanism and administrative mechanisms. Of the two, the market mechanism proved to be the best in allocating resources. Traditional government uses administrative mechanism that is using the command and control, took out the procedures and standard definition, and then ordered the people to carry it out (in accordance with the procedure). Entrepreneurial government uses the market mechanism does not command and control, but developing and using an incentive system to keep people from doing activities that harm society.

Public Sector Accounting Implementation in Indonesia

One form of the application of accounting techniques in the public sector is state-owned organizations. In the year 1959 the old order of government began a policy of nationalization of foreign companies are transformed into state-owned enterprises (SOEs). But because it is not managed by professional managers and too much politicization 'or government intervention, resulted in the company only made as' milch cow' by the bureaucrats. So that history does not show the presence of good results and are not encouraging. This condition continues during the new order. More contrast at the time of issuance of Government Regulation No. 3 Year 1983 on the functions of the SOEs. By considering some of these functions, the consequences that must be borne by the state as a public company is highlighting its presence as an agent of development rather than as a business entity. In spite of it all, that the existence of public sector accounting practices in Indonesia with a clear legal status has been around for many years rolled by a legitimate government. One of them is the Public Telecommunications Company (1989)

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