Managing Grant Funds by Regional Governments in the Perspective of State Finance

Managing Grant Funds by Regional Governments in the Perspective of State Finance State finance has a very broad meaning, namely in addition to state property rights or state assets which do not solely consist of all rights also include all obligations. These rights and obligations can also be valued in money if implemented. In carrying out its duties, the government as the holder of the implementation of public services and development in Indonesia must carry out three main functions, namely the allocation function which includes economic resources in the form of goods and public service services, the distribution function which includes community income and wealth as well as equity and development, and the stabilization function which includes security, economy and monetary. The central government usually uses the stabilization function and distribution function more often, while the regional government is more efficient and effective in using the allocation function because in general they are more aware of the needs of public service standards. However, in its implementation, the three functions must first be seen in the situation and conditions of each region. The implementation of this task certainly involves many groups, especially the people of Indonesia, which in general can be regulated by the constitution or law. This legal relationship can determine the system of government of the country, in addition to the legal relationship of state finances can also determine the system of government and the type of country. This legal relationship, in addition to giving rise to rights and obligations for the state, also gives rise to rights and obligations for the Indonesian people, the basis of which is stipulated in the Constitution and its implementation is regulated in various forms of legislation. The definition of state finances has quite a variety of meanings depending on the parties interested in it. The success of the state in achieving its goals depends on several factors, one of the influential factors is how the state collects and processes taxes in order to carry out government functions. In other words, a country can achieve its goals and be categorized as a developed country depending on the state's finances, because government policies that were initially limited to taxation, but with the development of the country, these policies have developed more broadly into policies in the field of state finances. State wealth does not only include state finances but all wealth owned by the state, whether wealth is managed by officials or institutions included in the general government or managed by government banks, government foundations with public or private legal status, state-owned enterprises. Article 2 of Law No. 17 of 2003 states: State finances as referred to in Article 1 number 1, include: a) The state's right to collect taxes, issue and circulate money and make loans; b) The state's obligation to carry out general government service duties and pay third party tax bills; c) State revenue; d) State expenditure; e) Regional revenue; f) Regional expenditure; g) State wealth/regional wealth managed by itself or other parties in the form of money, securities, goods receivables, and other rights that can be valued in money, including wealth separated in state companies/regional companies; h) The wealth of other parties controlled by the government in the context of carrying out government duties and/or public interests, and i) The wealth of other parties obtained by using facilities regulated by the government. In essence, central and regional finances are state finances. Therefore, to understand state finances, we must first understand the meaning of the state. The views of experts regarding the purpose of the state, namely; Plato, the purpose of the state is to fulfill the diversity of needs that cannot be fulfilled by humans individually. Meanwhile, Aristotle, said that the purpose of the state is to organize a good life for all its citizens. The implementation of effective and efficient regional financial management requires legal regulations that are outlined in legislation. Thus, the existence of law is very important for the financial process both in the central and regional governments, because with the legal process, financial management is expected to have and guarantee a condition that is orderly, certain and fair. Guidelines for granting grants sourced from the APBD that are reminded in regional spending have been regulated in Permendagri No. 21 of 2011 and Permendagri No. 32 of 2011 as amended several times, most recently by Permendagri No. 14 of 2016, which are sourced from the APBD formed by the government have the intention of creating orderly administration, accountability and transparency in the management of grants and social assistance that apply to all regional governments. In order to be able to budget grant spending and social assistance in the APBD Regulation, Permendagri No. 32 of 2011 Permendagri No. 32 of 2011 as amended several times, most recently by Permendagri No. 14 of 2016, requires regions to make a regulation in the form of a regulation to regions regarding the mechanism for granting grants regarding the mechanism for granting grants and social assistance. Budgeting grant funds takes into account the financial capabilities of the local government. Grant budgeting can be done after prioritizing the fulfillment of mandatory spending and is intended to support the achievement of regional government program and activity targets by considering the principles of justice, compliance, rationalism and benefits for the community. Grant budgeting must at least meet the following criteria: • Its specific allocation has been determined; • It is not mandatory, not binding, and is not continuous every budget year unless otherwise specified by laws and regulations; and • It meets the requirements of the grant recipient.