Some Factors Causing Non-optimal Budget for Activities of Notary

Regional Supervisory Board in 2016 Budget Year

Dwi Wahyu Kurniawati

Magister Management of Airlangga University

Keywords: Budget, Notary Regional Supervisory Board

Abstract: The objective of this research is to understand, investigate and analyze some factors being the constraints to

non optimal budget for the activities of Notary Regional Supervisory in 2016 Budget Year, a study in East

Java Regional Office of Law and Human Rights Ministry. Budget planning is a part of subsystem strategic

planning, which is technically to be conducted based on performance of budget system that is preceded with

performance planning. The application of performance budget system in the preparation of planning is

initiated with formulation of strategic issues that are responded by a program and a relevant activity. In the

implementation phase, the process of performance planning is addressed in the description of the National

Medium-term Development Plan into Ministry/Institution Budget Work Plan. The non-optimal Budget for

Activities of Notary Regional Supervisory Board in 2016 Budget Year were caused by: personal factor,

coordination factor, non-responsive and low understanding on the reporting and Budget settlements.

1 INTRODUCTION

Budget problem is a classic issue in every

organization. Like a double-edged sword, , budget

can be a strength and opportunity while at the same

time it can be a barrier or threat for an organization.

Budget is essential for an organization. The budget

in a public sector organization always becomes a hot

topic for discussion, starting from preparation,

implementation up to evaluation stages as it loaded

with political content.

Talking about budget is identical to figures and a

number of estimation to carry out a number program

and activities. Such budget is formed through a

budgeting process This process will become the

success key for activities of budget preparation and

implementation. Budgeting is one of stages in the

planning process and managerial controlling for

public sector organization (Mardiasmo, 2009).

Target is set during the budget planning to achieve

the organization’s goal. The realization of target

achievement is then reported during evaluation to

assess the organization performance from various

including finance.

Budgeting and budget execution cannot be

separated from human participation, humans are the

ones who prepare and implement the budget they

have made. Human behavior arises in the process of

budget preparation and it is also human behavior

that encourages people to survive living with the

budget they have prepared (Lubis, 2014). Human

behavior will affect their perceptions, so the

differences in perception will certainly arise in the

process of budget preparation and implementation.

Motivations and needs of individuals or group differ

from other individuals’ and groups’. Participation,

commitment, coordination, communication and

cooperation from all parties in an organization are

needed in order to unite and synergize such

differences in motivation and needs. This is done so

that the decision making related to budget can be

carried out in an effective and efficient way in order

to achieve the organization’s goal.

A number of behaviorism consequences arise in

the budgeting and budget execution, some of which

are pressure, motivation, aspiration, and anxiety

(Lubis,2014). The consequence triggers the rise of

dysfunctional behavior in an organization. In

addition to that, there are many other factors that

also influence human behavior in doing the

budgeting and executing the budget in an

organization, some of them are size and organization

structure, leadership style, the type of control system

706

Kurniawati, D.

Some Factors Causing Non-optimal Budget for Activities of Notary Regional Supervisory Board in 2016 Budget Year.

DOI: 10.5220/0009500007060711

In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science (UNICEES 2018), pages 706-711

ISBN: 978-989-758-432-9

and environmental stability. As a public sector

organization, General Legal Administration (AHU)

& Intellectual Property (KI) sub-sector of East Java

Law Ministry and Human Rights Regional Office

also prepares and implements budget. The budget is

in the form of document of budget and budget

implementation. One of budgeting and budget

implementation documents. One of budgeting

documents is Work Plan and Ministry and Institution

Budget (RKA-K/L) and budget needed to carry out

the intended work plan. The work plan of

Ministry/Institution comprises of information about

vision, mission, objective, program, expected

milestone, activities, as well as expected output,

while budget comprises of information about cost

for each program and activity for the planned year.

The stage of budget preparation is an important

one because an effective budget yet does not focus

on performance can even mess up the programs that

have been prepared in advance. Often in common

practice, budget preparation seems to be a separate

part from strategic formulation and planning that a

success of budget application is not in line with the

success of program and the organizational goal.

Such budgeting cannot result in an effective budget

as a means of management to bridge the

achievement of organizational goal (Basri, 2013).

Budget Implementation for Some programs of

AHU & KI service sub-sector in the Law Ministry

and Human Rights of East Java Regional Office was

non-optimal as it was reflected by the Government

Institution Performance Accountability Report

(LAKIP) in the 2016 Budget Year, mainly for

Regional Supervisory Board Activities.

The supervision toward Notary in East Java area

becomes the authority of Regional Supervisory

Board based on authority delegation by Ministry of

Law and Human Rights of the Republic of Indonesia

in order to uphold the legal regulation upon every

violation to obligation as well as ban for Notary

position or Notary Code of Ethics, not limited to

carry out coaching authority. This supervision needs

to be done in a more effective way considering the

notary upon running their profession is prone to do

abuse of office authority and to perform notary

behavior that may cause disadvantage to community.

The provisions regulating Notary Supervisory Board

was contained in the Law No. 2 of 2014 on

Amendment of Law No.30 of 2014 on Notary

Positions and the decree of Ministry and Human

Rights of the Republic of Indonesia, No M39-

PW.07.10 Of 2004 on the Guideline for Duty

Implementation of Notary Supervisory Board.

Related to MPW authority, based on Article 73,

Law No. 2 of 2014 it includes: organizing hearings

of audit and decision making upon public report

through Regional Supervisory Board, Imposition

and Proposal of Sanctions, Temporary Discharge,

and Dishonorable Discharge that are proposed by

Central Supervisory Board and Issuance of Leave

permit to Notary.

Whereas based on Article 70, Law No. 2 of

2014, MPD, holds an authority of: organizing

hearings to examine the alleged infringement to

office authority performance and notary code of

ethics based on society report, periodically notary

protocol examination, issuance of leave permit and

decision on Acting Notary as well as report of the

whole MPD activities to MPW. MPW and MPD

carried out supervision duty to 1585 (One thousand

five hundred eighty five) notaries (Notary data as

per 31st of December 2014) in 38 Regencies/Cities

in the area of East Java Province Area.

The quality performance of Notary Supervisory

Board of East Java area is one of many important

factors that can influence either optimal or non-

optimal performance of 11 (eleven) Notary Regional

Supervisory Board that are notoriously undertaking

supervision function to 1585 ( One thousand five

hundred and eighty-five) Notaries as public serving

officials. Due to the great number of notaries in East

Java Province area as mentioned above, the Notary

Supervisory Board Organization should be

supported with adequate facilities and infrastructure

in order to run its authority optimally.

The implementation of Notary Local/ Regional

Supervisory Board activities with supervision object

coverage of the whole notaries in East Java area

needs support on financial administration,

correspondence system and accountable technical

supervision material that it is necessary to involve

relevant parties in the formulation and supervision of

activity implementation in the field.

2 THEORICAL FRAMEWORK

Robbin and Coulter (2010) stated that planning is a

process starting from defining organization goal,

which is to determine strategy for achieving the goal

in a comprehensive manner in order to integrate and

coordinate the whole organization work, so that the

organization goal is achieved.

Haryanto, et al (2007) in Asikin (2012) explained

that public sector budget is activity plan and

periodical finance (normally in annual period)

comprise of program and activities as well as

amount of fund obtained (revenue/income) and

needed (expenditure/shopping) in terms of achieving

organization goal. Mardiasmo (2009:61) in

Waworuntu (2013) mentioned that budget is an

estimation of performance that will be achieved for

some particular period and be stated in financial

Some Factors Causing Non-optimal Budget for Activities of Notary Regional Supervisory Board in 2016 Budget Year

707

unit”, whereas budgeting is an activity of allocating

limited financial resource for the funding of

organizational expenditure that tends to be limitless

(Haryanto, dkk: 2007) in (Asikin, 2012).

Within the budgeting system, all activities starts

from medium-term development plan that is

accommodated in the Budget Work Plan of

Ministries/Institution (RKAK/L). in the RKAK/L

there will be elaboration of activity program priority

and budget ceiling.

Budget planning is a part of subsystem strategic

planning, which technically to be conducted based

on performance of budget system that is preceded

with performance planning. The application of

performance budget system in the preparation of

planning is initiated with formulation of strategic

issues that are responded by a program and a

relevant activity. In the implementation phase, the

process of performance planning is addressed upon

elaborating the National Medium-term Development

Plan into Ministry/Agency Budget Work Plan.

Based on Law No 17 of 2003 on Financial State,

it mandates the transparency and accountability of

financial state that is manifested through description

of budget realization in each Ministries/Institution

in addition to presenting realization of revenue and

expenditure together with explaining work

performance achievement of Ministries/Institutions.

The implication of Law No 17, of 2003

implementation is it needs a program restructuring

and budget which management and budget

execution should be based on performance.

There are many experts providing definition of

budget. According to Munandar (2000: 19) the

definition of Budget is a plan that is prepared

systematically including the whole company

activities stated in monetary unit (unity) and be

commenced for certain time range.

Other definition relevant to budget according

Christina (2002: 25) stated that:

Budget is a plan prepared systematically in the

form of figure and stated in a monetary unit

including the whole company activities for certain

period of time in the future. Therefore, the prepared

plan is served in a monetary unit , and thus budget

often being called as financial planning. In a budget,

the unit of activity and the unit of monetary occupy

important position in the sense that all activities will

be quantified within one monetary unit, that

achievement of efficiency and effectiveness of

activities done is measurable.

Supervisory Board is a body that has authority

and obligation to conduct coaching and supervision

to Notary. Supervision to Notary is intended for

Notary to carry out their post duties based on and

followed the legislation governing the Notarial post.

Notary in running their post duties must inherently

hold on and base on legislation that regulates the

Notarial post, meaning everything that has been

mentioned in legislation regulating the Notarial post

shall be followed. Based on the provisions in Article

67 up to Article 81 UUJN, it has been regulated

about supervision to Notary.

Supervision and Coaching Institution

(Supervisory Board) to Notary that is formed by

Law and Human Rights Ministry needs to get done

more effectively and to be increased in quality,

because Notary is expected to perform their post

profession by always improving the professional

quality and law protection to community. The role

of Supervisory Board is very crucial in coaching and

supervising the Notarial post continually with regard

to personal behavior in running both their post and

beyond as a cutting edge to guarantee legal certainty

toward society who use notarial service. Local

Supervisory Board (hereinafter called MPD) is

formed in Regency /City to coach and supervise

Notaries with jurisdiction in Regency/City, if the

number of Notary does not compete with the number

of MPD members, it can form MPD consortium for

several regencies/cities based on the provisions in

Article 69, Paragraph 2a, UUJN

3 RESEARCH METHOD

This is a qualitative research that describes, records,

anlayzes and interprets current condition. The

research was conducted at Human Rights and Law

Ministries Provincial Office of East Java. The

research subject were 7(seven) personnel, where 4

(four) persons are the staffs in Human Rights and

Law Ministries Provincial Office of East Java and

3(three) persons were from the Notary Local

Supervisory Board of East Java. The data collection

technique used were observation, interview and

documentation technique utilizing observation

guideline and interview guideline tool. The data

analysis in a qualitative research is a process of

simplifying data into a form that is easily read and

interpreted and done through some steps of data

researching, interpreting and concluding.

4 ANALYSIS

This research is a follow up research from some

factors causing non optimal budget for activities of

East Java Notary Local Superisory Board in 2016

budget year.

UNICEES 2018 - Unimed International Conference on Economics Education and Social Science

708

AHU &KI Service Sub-Sector that is in line with

the Directorate General of General Law

Administration and Directorate General of

Intellectual Property, where that Directorate General

has shared PNBP in accordance with the portion and

returned to respective Human Rights and Laws

Service Division that are available in Indonesia

under Human Rights and Laws Ministries of

Republic of Indonesia.

Data of Budget Absorption for Activities of

Notary Regional Supervisory Board in 2016 Budget

Year.

Tabel 1: Budget Realization

Code Description Ceiling Realizati

D Notary

Regional

Supervisory

Board

974,260,000 714,879,

300

521211 Material

Expenditure

92,950,000

68,219,3

524111 Ordinary

Trip

Expenditure

171,960,000 126,960,

000

Source: SAS application , Human Rights and Laws

Ministry East Java Provincial Office of 2016, (2016)

Budget for Activities of Notary Regional

Supervisory Board in 2016 Budget Year comprises

of budget for material expenditure amounted to Rp.

92.950.000,- (ninety two million nine hundred and

fifty thousand Rupiah), budget for Ordinary Trip

Expenditure Rp. 171.960.000,- (one hundred and

seventy-one million nine hundred and sixty thousand

Rupiah).

In the beginning of budget preparation, a

disbursement plan was made, but over the time there

was a non-compliance to budget absorption that was

carried out so there was budget left over, if each of

Notary Regional Supervisory Board obeyed carrying

out the disbursement plan the risk of low absorption

could have been avoided.

As questioned what happened to the absorption

of MPD budget in 2016,some of which were because

MPD paid a little attention or not active, due to the

membership component of the MPD itself that

comprised of various components, in addition there

was another reason because the MPD Secretary that

so far being assigned has not managed well due to

another assignment the secretary has, so that in the

activity budget of MPD.

In addition, there is another constraint that was

called as low coordination factor, such thing was as

told by the informant. Based on the interview with

the informant, it was told that MPD didnot

understand about budgeting thing, let say a business

trip, while in dipa it was stated tath business trip was

done for two days , but during the practice, MPD

only did the business trip for 1(one) day that MPD

only made for 1 (one) day in budget settlement,

therefore there was a left over money.

In addition to the above mentioned constraints,

there was another constraint told by informant, while

this related to the official who signed the settlement

documents that sometimes were busy due to official

duty outside the office, that in the end the documents

should wait for signatories.

So far, MPD has not really understand the

budgeting problem, their non-understanding was

because most of MPD components came from

Notaries who do not understand about

administration and financial settlement.

5 RESULTS

The results of the research on the some factors

causing non-optimal budget for activities of notary

regional supervisory board in 2016 budget year

include: 1. Personal factor; 2. Coordination factor; 3.

Non Responsive factor; 4. Not understand about

reporting or settlement.

Based on the interview result with some

informants, it was acknowledged that one of cause

factors for non-optimal activities of Notary Regional

Supervisory Board was personal factor, as stated in

the interview result as follows:

“a question like this refers to technical matters,

the technique in the legal service itself, once we

have accepted dipa, see the posture and then we can

make it into a good order, it goes without saying,

and the last one before dipa was out there was a

development of disbursement plan, so, we have got

the data automatically, while on the other side we

have to focus, and obey, it means that during the

implementation there was no compliance, neither to

disbursement plan not prepared wor plan”.

(informant 1, 50 y.o)

The withdrawn conclusion is, the constraints

referred to technical matters in AHU & KI Service

sub-sector itself, when dipa was accepted, read and

then arranged, the budget executor should comply

with the disbursement plan being developed, but

what happens so far there is no compliance to

disbursement plan and work plan prepared.

Some Factors Causing Non-optimal Budget for Activities of Notary Regional Supervisory Board in 2016 Budget Year

709

In addition, there is another constraint that was

called as low coordination factor, such thing was as

told by the informant.

“ it was lack of coordination, not to mention that

the head of MPD was not so responsive, and he has

handed over fully to the secretary, it doesn't matter

about any absorption, that was that some times

happened”. (informant 3, 56 y.o)

“ it doesn’t work, not the whole, only some, if

we apply, the person in charge also doesnt

understand about budget thing, take SPPD as an

example, the two-day business trip, he made it into

one direct day, the payment was in consequence

only for 1 day, even though he has been examined

for two days, it was only claimed in the report for

only 1 day”. (informant 2, 34 y.o)

Based on the interview with the informant, it was

told that MPD didnot understand about budgeting

thing, let say a business trip, while in dipa it was

stated tath business trip was done for two days , but

during the practice, MPD only did the business trip

for 1(one) day that MPD only made for 1 (one) day

in budget settlement, therefore there was a left over

money.

In addition to the above mentioned constraints,

there was another constraint told by informant, while

this related to the official who signed the settlement

documents that sometimes were busy due to official

duty outside the office, that in the end the documents

should wait for signatories.

“ We have PPK, we don't have PPSM, so we

have to wait, PPSM is available, since KPA as the

proxy of budget user is not available yet, so it has to

wait, it has to wait for everyone to be available”.

(informant 2, 34 y.o)

So far, the AHU & KI Service Sub-Sector never

informs the constraints faced in carrying out the

Notary Regional Supervisory Board activities as it

was told by the informant as follows:

“ the reason was why, it was The sub-sector

itself from the same sector, they never informed that

their constraints were actually this, and since long

time ago up to now perhaps, the questionnaire or

report have never been applied, that’s all, that was

the only in compliance to tell you the truth”.

(informant 1, 50 y.o)

Based on the result of interview with an

informant, it was acknowledged that the head of

MPD was not responsive, where the head of MPD

handed over fully to his secretary, such thing was

told by the next informant as follows:

“ not to mention that the head of MPD was not

so responsive, and he has handed over fully to the

secretary, we don’t mind about what kind of

absorption it may, that was that some times

happened”. (informant 3, 56 y.o)

Not understand about Reporting or Settlement

So far, MPD has not really understand the

budgeting problem, this information was given by

informant as follows:

“ it doesn’t work, not the whole, only some, if

we apply, the person in charge also doesn't

understand about budget thing either, take SPPD as

an example, the two-day business trip, he made it

into one direct day, the payment was in consequence

only for 1 day, even though he has been examined

for two days, it was only claimed in the settlement

for only 1 day”. (informant 2, 34 y.o).

6 CONCLUSIONS

The implementation of MPD budget in 2016 budget

year was not yet optimal because during its

execution there was no strong commitment from the

leader nor compliance, do not comply with the

disbursement plan and work plan that has been

prepared since the budget preparation, in addition to

that, it needs controlling from the leader, where

every work being done by the staffs should be

monitored by the leader until the work is final:

1. In order to prevent any failure upon activities

done by Notary Regional Supervisory Board in

the following years, there are some solutions

needed to be taken some of which are by

holding workshop which invites all members of

MPD without any exception, if necessary a

pinch service by inviting the resource person to

each MPD;

2. To regulate the budget usage based on

disbursement plan and to carry it out obediently;

3. In the provincial area itself, It needs a peer

controlling between the Head of Division, Head

of Section and Head of Sub-sector. And the

Treasury to check what work has been done and

whether or not it is in line with the disbursement

plan;

4. The classical problem that are faced from year

to year is the non-knowledgeable about

settlement reporting, therefore the solution

given may be to develop a guideline or SOP

related to settlement of activities of Notary

Regional Supervisory Board.

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