Local financial management
Local financial management in terms of allocation of capital expenditure is associated with long-term financial planning, particularly financing for the maintenance of fixed assets resulting from capital expenditure. According to the concept of multi-term expenditure framework (MTEF), that the capital expenditure policy should pay attention to expediency (usefulness) and the financial capacity of local government (budget capability) in the management of these assets in the long run. Capital expenditures intended to get a local government fixed assets, such as equipment, buildings, infrastructure and other fixed assets. Theoretically there are three ways to acquire fixed assets, namely: (1) build your own, (2) exchange with other fixed assets, and (3) purchase. Most of the cases in the government, usually the way it does is build it yourself or buy.
The issue now is the limited financial resources to build asep remain, on the other fixed assets is needed. Therefore, the Government will certainly look for other sources, such as investors, loans to third parties, and are much easier today with the publication of the Regional Bond (OD).
Government Regulation (PP). 105/2000 and the Decree of the Minister of Home Affairs provides confirmation that the area has the authority to determine the allocation of resources into expenditures by embracing the principles of propriety, necessity, and local capability. Local governments, in cooperation with the House of Representatives as the legislature, first determine the general policy direction (ME) and budget priorities as guidance in the allocation of resources in the budget. ME and budget priorities is a synthesis of the aspirations of the people crawl in order to obtain an adequate description of the policy of short-term (annual) and long-term policy (five-year) related to financial management policies.
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Tags: Asset, Business, Capital IQ, Cost, Finance, Fixed asset, Fixed asset turnover, Local government