A

t the outset of 2016, President Joko “Jokowi” Widodo signed Presidential Regulation No. 7/2016 on the treasurer certification program of the state budget working units.

 Playing a vital role in public financial management, state treasurers conduct a treasury function within government working units for budget execution purposes, as stated in Law No. 1/2004 on the state treasury. This treasury function includes receiving, saving, depositing, managing and reporting receipts and spending for the purpose of state budget execution within ministry working units.

The main purpose of the so-called certification policy is to determine eligibility and recognize and enhance competency of state treasurers to conduct treasury functions. The regulation mandates that by 2020, in order to become a state treasurer, a civil servant must be professionally certified by the Finance Ministry.

Similar to other professional certification programs, the government recognizes the competency of a treasurer by granting a specific registered number. The certification can be obtained by passing a professional examination organized by the Finance Ministry. Prior to taking an examination, all certification participants are required to undertake training in treasury practices. The professional certification expires within five years of its award, and can be renewed by undertaking continuing professional development and abiding to ethical rules.

The fresh certification policy took place against a backdrop of inadequate competence and unethical conduct among state treasurers. The issue is reflected in financial maladministration and illicit financial practice. Lack of treasurer capacity has been long lamented by the government. In fact, the capacity issue within government institutions have been dealt with many initiatives, yet without optimum success. In addition, the inexistence of a code of ethical conduct for state treasurers has resulted in a negligence of fortifying good governance in managing public finance.

Having said that, it is clear that the certification policy may boost the capacity of state treasurers, further equipping them with all necessary qualifications to be better able to manage public money. In addition, the benefit of the certification program for treasurers is crystal clear: Not only does certification offer recognition of a competency that can differentiate certified treasurers from the crowd, the certification program may give state treasurers a sense of pride and fulfillment, useful for career advancement. Indeed, as a catalyst for improved government financial management, the treasury certification program could have far-reaching financial outcomes and implications.

The government currently employs more than 30,000 state treasurers spread over approximately 24,000 working units under the central line ministries. As stated in the presidential regulation, the duty of the government to certify all current state treasurers has to be fully implemented between 2016 and 2020. It is a massive undertaking.

Given the deadline, it is important to put the policy into practice as early as possible. Nonetheless, whether the policy is implemented at its earliest state or not is not necessarily the point; what is more important is the ability of the government to follow it through, through careful implementation. What needs to be done then? The government should underscore the fact that as the policy has been enacted, the key ingredient for a successful certification policy lies in its implementation process.

In order for the policy to be successfully put into practice, the government ought to consider and act on at least a few critical implementation factors.

First, commitment of all parties involved in marshaling adequate resources to undertake the certification process is critical for the implementation. These resources may include the cost of dissemination programs, certification examination and training programs, not to mention any other resources including human capital, which necessitate a big chunk of the budget. The government’s challenge to generate resources is without question. To put it in another way, it is pointless to enact a good policy without willingness to deploy adequate resources for bringing the policy to pass.

Second, communicating the certification policy properly to all stakeholders may significantly facilitate and push further the implementation process of certification policy. Communication can be carried out through massive dissemination programs such as meeting and socialization or by utilizing other communication devices such as the internet and circular letters.

Apart from the treasurer as the main target of communication, the head of working units and financial managers within line ministries as the treasurer counterparts need to be educated about the policy. Notably, the urgent need of communicating policy addresses one of the major problems in public finance, namely the reluctance of civil servants to become government financial managers.

There have been various cases of reluctance and unwillingness on the part of civil servants to take up the treasury position and its related jobs, for the following reasons: (1) insufficient incentives for treasurers against the risks they face, and (2) the lack of capacity-building programs provided to empower treasurers to manage daily chores. Being a state treasurer, one faces a considerable risk related to administered money. Paradoxically, compared with the risk and responsibility, the additional income earned by treasurers in a state organization is assumed to be far too low.

Appointed by the head of a working unit, a state treasurer has a personal responsibility over state payments made. Consequently, for the certification policy to be effective, the program should entail a rise in pay as a recompense for improved competence and greater risk. Like other professional certification programs, the spirit of certification should lie in appreciation through increased tangible incentives received by the certified treasurer.

For instance, the 2010 Association of Government Accountant (AGA) Compensation Survey Report revealed that those who had earned a Certified Government Financial Manager (CGFM) certification received a higher average salary than those who had not. Likewise, in Indonesia, the teacher certification program has doubled the salary of certified teachers against uncertified teachers.

Another important cause of the unwillingness of a civil servant to be appointed as a state treasurer may also stem from the paucity of training programs provided by the government. Inadequately empowered by the necessary knowledge and skills in handling daily routines, treasurers tend to be incapable of managing their jobs, raising another issue related to money management.

Last but not least is the existence of new systems and procedures fitted to the implementation contextual factors. The fact that one size doesn’t fit all has made flexible systems and procedures, yet maintaining the quality of the government certification program is urgently needed to invigorate the policy implementation process.
________________________________

The writer works for the Finance Ministry and holds a PhD in economics and management from the University of New South Wales, Australia. The opinions expressed are her own.