THE EXPERIENCE OF PERFORMANCE MEASUREMENT IN ASIAN COUNTRIES: THE CASE OF THE REPUBLIC OF INDONESIA

Transcription

1 THE EXPERIENCE OF PERFORMANCE MEASUREMENT IN ASIAN COUNTRIES: THE CASE OF THE REPUBLIC OF INDONESIA Paper presented at the Second International Conference on Performance Measurement and Government Innovation Hosted by the OECD Asian Centre for Public Governance in cooperation with Shejiang University Hangzhou, July 9-12, 2007 by Komarudin STATE MINISTRY OF ADMINISTRATIVE REFORM THE GOVERNMENT OF THE REPUBLIC OF INDONESIA 2007

2 Performance a. Condition that should be known and informed to the stakeholders so that the level of achievement to the vision and mission of an institution is also known. b. Necessary in order to identify the positive and negative impacts of certain policy taken during the process. c. Performance information: management tool to observe and evaluate the progress that have been achieved so far or in a certain period of time: take necessary actions as revising the policy, aligning the core activities to the organization s main duties, plan and determine the desired level of organization s achievement, and decide an action, etc.

3 PERFORMANCE MEASUREMENT Six Categries: (1) finance; (2) operation; (3) quality; (4) safety; (5) personnel; and (6) customer satisfaction. (Chun-Ho Ko, 1998) PM can be divided into input, process, output, outcome, benefit, and impact. To be measured: financial, internal business operation, customer-employee-community satisfaction, stakeholders, and time. Performance Indicator: process, output, outcome, benefit, and impact. PM Success Strategy: leader commitment, sense of urgency, alignment to strategic dirction, framework, communication, employee involvement, custmer oriented strategic plan (logic model, techniques, SWOT analysis, just in time. accountability, data collection, reporting, statistical process operations research, quality control, evaluation, report to customer and stakeholders, and develop performance cycle.

4 Five Stages: strategic plan, performance indicator, Data Performance System, Improvement of Performance Measure, and Integration with Management Process. GOAL OF PM: Effectiveness, Efficiency, Quality, Timeliness, Productivity. And safety. The final result: good public government (comparison of mission and goal with output/outcome) and good corporate government profit.

5 Government Agency Performance Accountability System (SAKIP): inspired by the Government Performance Result Act (GPRA) 1993 of the US, followed by some related regulation: a. Presidential Instruction No. 7/1999, Government Performance Accountability (INPRES 7/1999) b. Law 25/2004 on National Development Planning System c. Law 17/2003 on State Finance d. Law 1/2004 on State Treasury e. Law 15/2004 on Control of the Management and Responsibility of Treasury f. Law 22/1999 jo 32/2004 on Regional Governance g. Presidential Instruction 5/2004 on the Acceleration of Corruption Eradication h. Presidential Regulation 8/2005 on Finance Report and Performance Report.

6 GOVERNMENT PERFORMANCE ACCOUNTABILITY SYSTEM (SAKIP): A decree of the Indonesian People Consultative Assembly No. XI/MPR/1998 on Administering Clean and Free of Corruption, Collusion, and Nepotism. Followed by Law 28/1999 on Law No. 28/1999 on The State Organizer Who is Clean and Free From Corruption, Collusion, and Nepotism. Presidential Excecutive Order (Instruction) No. 7/1999 on Performance Accountability of Government Institution (Inpres No. 7/1999 on Government Performance Accountability, Akuntabilitas Kinerja Instansi Pemerintah, AKIP ).

7 Government Performance Accountability System is intended to: a. recover and sustain the people trust to the government; b. drive transparency and responsiveness of government institutions; c. encourage people participation in national development programs; d. make government institutions operate effectively, efficiently, as well as economically and responsively to the people needs and requirements; e. drive the development of proper evaluation system through the development of performance management; f. establish positive and healthy working atmosphere as well as improved disciplines; and g. encourage the impromenet of service quality to the people.

8 The Orientation of SAKIP not only covers the indicators of input and outpout but also widens to the indicators of outcome, benefit, and impact as well as indicator of process to alter the orientation of the previous performance measurement of government institutions, while monitoring their implementation processes. SAKIP employs strategic management approach (including performance measurement) in order to stimulate the changing a. from the orientation of inputs and processes to the effectiveness of outputs and outcomes (outcome oriented); b. from the short-term orientation (yearly) to the measurable and sustainable middle-term orientation (five yearly); and c. the quality improvement of accountability reports.

9 The main focus of SAKIP is to enhance accountability by boosting the government performance and avoiding authority misuses. SAKIP also emphasizes an integrated and non-separable performance accountability cycles from: a. Strategic Planning; b. Performance Planning; c. Performance Measurement (including performance e d. Performance Reports. These cycles reflects a strategic management approach w

10 SAKIP addresses the importance of focusing on high priority strategic goals (in terms of result) and defining right programs to achieve the goals or objectives (efficiently and effectively). The new features introduced by the system to the public governance in Indonesia are performance measurement and performance evaluation, utilizing performance indicators and measures. Both performance measuremet and performance evaluation were about barely been done under neither act nor government regulation in the past. The system was aimed to help both central and regional/local government agencies to sustainably improve performance and accountability simultaneously.

11 Presidential Instruction No. 7/1999 (INPRES 7/1999): requires Ministries, Chief Commander of National Army, Central Bank Governor (is no longer required to comply with the President Instruction due to Act No. 23/1999 on Bank Indonesia), Attorney General, Police Chief, Head of Non-Departmental Agencies, Secretary of the Highest and High State Institutions (Secretary General of People Consultative Asssembly is no longer required of comply with the President Instruction due to Constitution Ammendment the third, 2001), Governors of the Province, Regents (Districts) and Mayors (Municipalities) to implement performance accountability system: a. to prepare a practical guideline on performance accountability to report as well as to disseminate the guidelines; b. to evaluate performance accountability report; c. to coordinate and to monitor the implementation of the INPRES 7/1999.

12 DISSEMINATION SCENARIO, EFFORTS, AND PROGRESS OF SAKIP: Development of SAKIP: learning based approach; adopting some good performance management practices which are considered applicable in Indonesian environment. Benchmarking through hunting any performance management models in website. Study of relevant subjects: Strategic Management System, Performance Based Management, Performance Based Budgeting, Reinventing Government, Change Management, etc. Dissemination: seminars, workshops, pilots, and socialization; intended to communicate (regulations or guidelines) and gathering feedback from public particular participants. First National Seminar: pilots in some ministries and regional governments. The pilots done until the President Instruction No. 7/1999 was issued in June 1999.

13 Feisal Tamin, Minister of Adminisrative Reform ( ): increases the task and function in terms of accountability and control. Taufiq Effendi, Minister of Adminisrative Reform (2004 up to now): developed cooperation between the Ministry, Governor, and the Legislative Body of the Province, witnesses by the Corruption Eradicating Commission to implement ISLAND OF INTEGRITY. The Minister also develops coordination, monitoring, and evaluation of the implementation of INPRES No. 5/2004 on The Acceleration of Eradicating Corruption. The prime public services were the end of bureaucratic reform to achieve good governance, clean govenment, and avoiding corruption, collution, and nepotism.

14 RECENT DEVELOPMENTS Cooperation between the Ministry of Administrative Reform and Corruption Eradication Committee to prevent corruption, collusion, and nepotism. Good mentality and behaviour of government officials along with the implementation of SAKIP could make them avoid breaking laws. Annual Performance Agreement is required between a government official, a subordinate, and his or her superior, starting from budget year President Instruction No. 5/2004 on Acceleration of Corruption Eradication: along with the statement of Performance Agreement, have to be attached a summary of Annual Performance Plan revealing the main programs that must be accomplished by the signing official, strategic objectives that were expected to attend, performance indicators (outputs and or outcomes), and the budget of each program. Socialization 5 Modules: Accountability and Governance; Strategic Planning; Performance Measurement; Performance Evaluation; and Reporting.

15 Act or Law No. 17/2003 on State Finance intends to integrate performance accountability system with budgeting system, so the state budget becomes a performance based budget, or either central government or regional/local government. Implementation of performance based budgeting have been started for budget year 2005.Fully implementation of it is expected to be done in the next couple years. Act No. 1/2004 on State Treasury intends to include performance achievement information accompanying financial report and statements in the government annual report. Transparency of government agencies performance information is being encouraged. Act 32/2004 on Regional Governance intends to include regulation in autonomy and decentralization.

16 Act 25/2004: National and Regional Development Planning INPRES 7/1999: Government Performance Accountability (Accountability, Control, and related Performance Measurement and Management) INPRES 5/2004: Acceleration of Corruption Eradication Government Regulation No. 79/2005 on Guidance and Control of Regional Governance. Government Regulation No. 8/2006 on Finance Report and Performance Report Government Regulation No. 3/1007 on Regional Development Report, Responsibility Report, and Information of Regional Development Report.

17 INPRES 5/2004 on ACCELERATION OF CORRUPTION ERADICATION Ten General Instruction to Government Officials: Regular report, reporting-registering-announcing, and controling; Signing Performance Contract; Increasing the quality of public services; Integrity Act and Island of Integrity to buid free of corruption region; Implement Presidential Decree No. 80/2003 on Goods and Services Provision without corruption; Efficient, effective, and low profile character of government officials; Support law enforcement handled by Police, Judge, and Anti Corruption Agency; Increasing coordination and cooperation with all law enforcement bodies or agencies; and Avoiding corruption habits and increasing guidance and control to government officials.

18 Eleven Special Instruction to he Ministries and Related Chairman of Institution: 1. To develop and implement E-Procurement for government goods and services provision.. 2. Increases control of taxes, customs, and avoid corruption eradication in financial activities. 3. Develops National Action Plan of Corruption Eradication (RAN-PK) through coordination with related institutions. 4. To develop public services policy, performance agreement, implementation of good governance characteristics, develop government employee system, and coordinate, monitor, and evaluate the implementation of Inpres No. 5/ To prepare the amendment of Law and revise the Act on Corruption Eradication. 6. To make guidance for the implementation of good corporate governance. 7. To design education curriculum cover anti corruption 8. To socialize and campaign anti corruption program 9. To increase coordination among law enforcement institution 10. To increase awareness and coordination on corruption eradication 11. To implement good governance, to create public services and increase coordination All government officials should implement this Presidential Instruction with full responsibility and report to the President regularly. Signing on December 9, 2004.

19 Performance Indicator: a. Increase efficiency and effectiveness, public services, Human Development Index (HDI), Human Poverty Index (HPI), citizen participation, transparency, accountability, and perception corruption index (IPK). b. Key Success Factors in implementing Island of Integrity and Performance Measurement: commitment from the leader, law as guidance, system or systemic, internal initiative, coaching, close monitoring and evaluation, and can do spirit. c. Best Practices of Island of Integrity covers role of leader (strong leadership), increasing capacity of regional government, institutional arangement, system and procedure, management system, human resources development, the prime and quality of public services, performance-based governance management, and the acceleration of corruption eradication. d. Island of Integrity Program already implemented in 2006 in the Province of (Riau, South Kalimantan, Central Kalimantan, and Gorontalom and in 2007, this program will be implemented in another some provinces.

20 BUREAUCRATIC REFORM: SIMPLE UNDERSTANDING 1) CHANGE OF MIND, SET, (PATTEN OF THOUGHT, ACTION, ATTITUDE, CHARACTER AND IDENTITY, 2) SHIFT FROM AUTHORITY PARADIGM TO SERVANT PARADIGM 3) PUTTING ROLE AHEAD OF AUTHORITY 4) OUTCOME ORIENTED 5) PERFORMANCE-BASED MANAGEMEN 6) ADOPTION OF BEST PRACTICES IN MATERIIALIZING GOOD GOVERNANCE, CLEAN GOOVERNMENT, AND FREE OF CORRUPTION, COLLUSION, AND NEPOTISM. 7) PUBLIC SERVICE DELIVERY SHOULD MAKE VERY CLEAN THE REQUIRMENT, COST, AND TME OF COMPLETION TO SPEED THE ERADICATION OF CORRUPTION AND ESTABLISHMENT OF AD HOC COMMISSION TO HELP CLAMP DOWN CORRUPTION AGENCIES 9) START FROM THE END, AND END AT THE BEGINNING. (FROM UPSTREAMS: A RIVER AS AN EXAMPLE) RIVER STARTS ITS FLOW. 10) ENCOURAGE THE IMPLEMENTATION OF INTEGRITY PACT (COMMITMENT OF HONESTY). 11) APPLICATION OF GOOD GOVERNANCE, GOOD PUBLIC GOVERNANCE, GOOD CORPORATE GOVERNANCE

21 BUILDING A CREDIBLE, TRANSPARENT, ACCOUNTABLE, AND PROFESSIONAL NATION CORRUPTION ERADICATION SHOULD START FROM OURSELVES, FAMILY, MORALITY. ISSUANCE OF SUCH REGULATION a. A BUREAUCRATIC REFORM IN INSTITUTION SERVICE DELIVERY b. SUPERVISION and ACCOUNTABILITY c. SYSTEM AND PROCEDURE d. HUMAN RESOURCE e. PUBLIC SERVICE DELIVERY g. SHIFTING PARADIGM and CHANGE OF MIND-SET WORK ETHICS: COMMITMENT AND CONSISTENCY, AUTHORITY AND RESPONSIBILITY, HONESTY AND SENSITIVITY, INTEGRITY AND PROFESSIONALISM, CREATIVITY, LEADERSHIP AND EXEMPLARY, TOGETHERNESS AND GROUP DYNAMICS, PRECISION AND ACCURCY, FASTNESS AND RATIONALITY, DEDICATION AND LOYALLY, EMOTIONAL QUOTIENT, FIRMNESSAND TOUGHNESS, DISCIPLINE AND WORK REGULARITY, BREVELY AND WISDOM, SPIRIT AND MOTIVATION, DILIGENCE AND AND PATIENC, JUSTICE AND OPENNES, AND MASTERY OF SCIENCE AND TECHNOLOGY.

22 Good Public Governance (GPG) 1) equity 2) supervision/control 3) law enforcement 4) responsiveness 5) effectiveness and efficiencies 6) participation 7) professionalism 8) accountability 9) strategic vision 10) transparency Good Corporate Government (GCG) GCG covers transparency, accountability, responsibility, independent, and fairness to be implemeted in government entrepresises.

23 REGIONAL GOVERNANCE BEST PRACTICES Best Practices as basic for innovation (criteria and parameter) UN HABITAT, as initiative which is create significant contribution (outstanding contribution) in increasing the quality of life in urban, rural or other environment or circumstances. Best Practices (UN; Dubai Municipality, 2003): big impact in increasing the quality of life, result of good an effective coordination, partnership within the government, private sector, and communities, and sustainable in terms of social, culture, economic, and environment. Stressed of best practices focused on outstanding contributions from initiatives, success of initiative, increase quality of life, reality, impact, process, and sustainabiliy, and transfer to other environment, and peer to peer learning.

24 CRITERIA OF BEST PRACTICES BY THE UN Five criteria: Impact, partnership, sustainability and leadership, community empowerment,gender equity and social inclusion, innovation within local context and transferability or replication. Seven parameter of Best Practices: situation of region, motivation, innovation, result measurement, sustainability, lessons learned, transfer or replication to other area.

25 BEST PRACTICES OF PROVINCIAL LEVEL OUT OF 33 PROVINCES AND 462 DISTRICTS/MUNICIPALITIES, THERE WERE SOME PROVINCES/DISTRICTS/MUNICIPALITIES COULD BE SEEN AS BEST PRACTICES Provinces: Gorontalo, East Java, Special Region Yogyakarta South Kalimantan, Central Kalimantan, Riau, Riau Island Districts and Municipalities: Solok, Jembrana, Sragen, Karanganyar, Pekanbaru, Parepare, Tarakan, Banjarbaru, Palangkaraya, etc.

26 DEVELOPING NEW ACT ON ADMINISTRATIVE REFORM 1) RUU on Public Services, 2) RUU on Governance Administration, 3) RUU on State Ministries), 4) RUU on Ethic of Government Employee, 5) RUU on Government Employee, 6) RUU on Responsibility of Central and Regional Government and Their Interrelation, 1) RUU on Non-Profit Public Services, 2) RUU on Pension of Government Employee, 3) RUU on National Control System, and 4) RUU on Accountability (SAKIP).

27 SUGGESTIONS TO IMPLEMENT BUREAUCRATIC REFORM, INCREASE TRANSPARENCY AND ACCOUNTIBILITY, AND CORRUPTION ERADICATION 1) Clear and accurate vision, mission, policy, strategy and action plan. 2) Implementing 4-W (well planned, well-organized who brings what, well-arranged, and well controlled/supervised). 3) Implementing 4-C (clear, comprehensive, and innovative Concept, Competence, Connection, and Commitment meaning, know your mission, know your men, and keep them involved). 4) Consistency and Seriousness 5) Shifting mind-set and culture-set, ethics and code of conduct, and shifting paradigm. 6) Starting to rewrite Indonesia, rewrite the Republic, and rewrite the Nation. 7) Developing attitude, knowledge, motivation, and knowledge-based society and knowledge-based economy.

28 OBSTACLES TO THE DEVELOPMENT AND IMPLEMENTATION OF SAKIP 1. Political and Systemic: SAKIP AS AN INSTRUMENT; 2. Organisational Culture: IF YOU WANT, EXACTLY YOU CAN! 3. Performance Measurement AND Performance Indicator 4. Connotation: there are still varies in describing performance. SAKIP defines that performance means result in terms of output and or outcome. 5. Legal Base: Government Regulation, Law/Act? 6. Budget Constraints 7. General Problems: institutional and organizational management, system, procedure, mechanism, and management system, performance-based human resources management and development, public services, understanding of accountability, and control/supervision; discipline, ethic code, character, and shifting paradigm.

29 VI. CONCLUSION Good Governance: laws and regulations, transparent public policies, people s participation and public accountability. The indicator of successful performance of government institution: emphasized on the successful organization s vision and mission accomplishment, and not by inflexible standardized indicators. The government bureaucracy is encouraged to have clear pre-defined vision, missions, goals, and objectives which can later be used as the basis of performance measurement and accountability information to its stakeholders. Accountability and transparency, the core elements of good governance on public administration system, have been implemented through, among others, the development of performance accountability of government institution system (INPRES 7/1999). Accountability and transparency is based on classification of managerial responsibility on each level of the government organization as means of measurement of the organization s success or failure in achieving its predefined vision, mission, goals, and objectives.

30 We should increase our understanding (definition) about performance measurement and accountability: What kind of material to be meassured? (financial, customer satisfaction, internal business operation, personal satisfaction, community satisfaction (shareholders and stakeholders), time frame, and requirements of the success of performance measurement.

31 What is the strategy of the success of performance measurement? full commitment from the leader (top management), sense of urgency, alignment with strategic direction, conceptual framework, communication, involvement of employee, customer-based strategic plan (logic model, using techniques), SWOT analysis, start doing performance measurement norm, revise tomorrow, Improve performance measurement, goal and objective, achieve performance accountability, data collection, consistent reporting, analysis and revise performance data, evaluate and use performance information, regular report to customer and stakeholders, and manage performance measurment cycle (strategic plan, integration with management process, improve performance measurement, develop accurate data and information, and perfornace indicator). The target of performance measurement and accountability is the reality of good governance, clean government, and free of corruption,collusion, and nepotism.

32 Komarudin, Expert Staff to the Minister of Administrative Reform, Indonesia Jalan Jenderal Sudirman Kav. 69, Jakarta Selatan 12190, Phone ; Fax Home: Phone , ; Fax HP