Local Government Accounting System

With the passing of Law Number 22 Year 1999 regarding, Regional and Law No. 25 of 1999 on Financial Balance of the Central Government and the Regions, and the rules for its implementation in particular Regulation Number 105 Year 2000 on the Financial Management and Accountability of the starting fiscal year 2001, there has been a renewal in financial management area. With this autonomy, the area is given broad authority to take care of their own household with minimal government intervention. Local governments have the right and authority to use the vast financial resources in accordance with its needs and aspirations of communities that developed in the area. However, with broad authority, it is not meant that local governments can use the financial resources they have at will, without a clear direction and purpose. Extensive rights and powers granted to the region, in essence a mandate that must be accounted for in an accountable and transparent, both to the people in the region and the central government has been distributing the balance funds to all regions in Indonesia. Renewal of local financial management in the era of regional autonomy, characterized by a very fundamental change, ranging from the budgeting system, treasury up to the responsibilities financial statements. Before the passing of autonomy, accountability regional financial reports to be prepared by the Local Government Budget Calculation just a report and Calculation Memorandum and the system used to generate the report is MAKUDA (Regional Financial Administration Manual) in force since 1981. Full implementation of regional autonomy in the form of implementation of the logical consequences of governance and development based on sound financial management. In accordance with Government Regulation No. 105 of 2001, governments at district has the authority to establish financial management systems and procedures in the form of local regulation area. Such a system is needed to meet