Cash Management

blic Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

92214

Cash Management

Reform

in Indonesia:

Making the State Money Work Harder

Kementerian Keuangan

Republik Indonesia

Cash Management

Reform

in Indonesia:

Making the State Money Work Harder

Foreign Affairs, Trade and

Development Canada

Affaires ¨¦trang¨¨res, Commerce

et D¨¦veloppement Canada

The Ministry of Finance

Directorate General of Treasury

Directorate of Cash Management

Jl. Lapangan Banteng Timur No. 2-4

Jakarta 10710

Indonesia

Tel: +62 21 384 1067

depkeu.go.id

The World Bank Office Jakarta

Indonesia Stock Exchange Building

Tower 2, 12th Floor

Jl. Jenderal Sudirman Kav. 52-53

Jakarta 12190

Indonesia

Tel: +62 21 5299 3000

id

This book was prepared by the Directorate of Cash Management of the Directorate General of

Treasury at the Ministry of Finance of the Government of Indonesia, and the Governance Global

Practice (formerly Poverty Reduction and Economic Management) unit of the World Bank in

Indonesia. The Ministry of Finance team was led by Rudy Widodo (Director of Cash Management)

with team members Wibawa Pram Sihombing and Akhmad Budhisusetyo, with overall guidance

from Marwanto Harjowiryono (Director General of Treasury). The World Bank team was led by

Bernard Myers (Public Sector Management Cluster Coordinator/Senior Public Sector Specialist),

with team members Vijay Ramachandran, Hari Purnomo, Mark Ahern, Lina Lo, Prasiwi Ibrahim,

Dinni Prihandayani, Lieke Riyanti, and Sandra Sari, with overall guidance from Jim Brumby (Practice

Manager, Governance Global Practice, East Asia Paci?c). Key writers were Wibawa Pram Sihombing,

Akhmad Budhisusetyo, Vijay Ramachandran, and Hari Purnomo.

The teams would like to acknowledge the valuable inputs received from the various units within

the Ministry of Finance (Secretariat General, Directorate General of Treasury, Directorate General

of Debt Management, Directorate General of Budget, Fiscal Policy O?ce, Directorate General of

Tax, Directorate General of Customs and Excise, and Directorate General of Fiscal Balance), Bank

Indonesia, as well as the World Bank. Special thanks to peer reviewers John Gardner, Arturo Herrera,

Lars Jesson, Duncan Last, and Theo Thomas.

This work is funded under the Multi Donor Trust Fund for Public Financial Management, with

contributions from the governments of Canada, the European Union, the Netherlands, Switzerland,

and USAID.

The ?ndings, interpretations, and conclusions expressed in this work do not necessarily re?ect

the views of the Ministry of Finance of the Government of Indonesia, the World Bank, its Board of

Executive Directors, or the governments they represent.

All photos and data are from the Ministry of Finance, Government of Indonesia, with all rights

reserved.

Printed in October 2014

i

Contents

Foreword ............................................................................................ix

Voices of the Key Implementers .......................................................xi

Abbreviations and Acronyms ...........................................................xv

Executive Summary ...........................................................................xix

CHAPTER 1:

OBJECTIVES OF CASH MANAGEMENT AND THE

INSTITUTIONAL ARRANGEMENTS TO UNDERPIN

THE OBJECTIVES

1.1. Introduction ...............................................................................3

1.2. Cash Management in International Practices..........................3

1.2.1. Objectives and Features of Cash Management ......................................3

1.2.2. Regulatory Framework for Cash Management ......................................5

1.2.3. Coverage of Cash Management .................................................................7

1.2.4. Institutional Framework for Cash Management ....................................8

1.2.5. Procedural Framework for Cash Management .......................................9

1.2.6. Information Technology ..............................................................................11

1.2.7. Capacity Building for Cash Management ................................................14

1.2.8. Incentives and Sanctions ..............................................................................14

1.2.9. Sequencing and Implementation...............................................................16

1.3. Cash Management in Indonesia ...............................................17

1.3.1. Background......................................................................................................17

1.3.2. Objectives of Cash Management in Indonesia........................................21

1.3.3. Regulatory Framework for Cash Management in Indonesia...............22

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