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Kapuas Hulu ends grants to central government agencies

KAPUAS HULU, thekabarnews.com—The Kapuas Hulu Regency Administration in West Kalimantan will stop allocating regional grants to local offices of central government agencies beginning in the 2027...

Mikail Hafeez

August 6, 2026 2 Min Read

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KAPUAS HULU, thekabarnews.com —The Kapuas Hulu Regency Administration in West Kalimantan will stop allocating regional grants to local offices of central government agencies beginning in the 2027 budget year. Regent Fransiskus Diaan announced this decision.

The decision follows written guidance from the Home Ministry and an anti-corruption directive from Indonesia’s Corruption Eradication Commission (KPK).

It will cover vertical agencies such as the National Police (Polri), the Attorney General’s Office, the Indonesian Military (TNI) and the courts.

“We have received the official letter from the Home Ministry. We will evaluate grants to vertical agencies going forward. The KPK has also directed us to do this work, and we will comply,” Fransiskus said.

Vertical agencies are regional offices of national ministries or institutions. They report to the central government rather than the regional administration. The national budget (APBN) generally funds their core duties and operations.

Fransiskus said the Kapuas Hulu administration had previously provided grants because the assistance supported joint field activities and operational requirements.

The local government, for example, had supplied official vehicles to help certain agencies carry out activities with regional authorities.

“I can confirm that next year we will no longer provide grants to vertical agencies,” he said.





KPK Chairman Setyo Budiyanto urged regional leaders in May 2026 to stop providing holiday allowances and additional grants to vertical agencies.

He said central government institutions already received financing through the national budget.

The warning followed KPK concerns that grants to law enforcement, judicial and defense institutions could create conflicts of interest, duplicate national and regional spending or weaken the independence of oversight agencies.

A KPK study on corruption risks in regional grant spending found that regional governments provided Rp9.21 trillion in grants to agencies handling functions under the central government’s exclusive authority during 2023 and 2024.

That amount represented 77.37 percent of all grants to vertical agencies during the period.

The study also identified approximately Rp1.06 trillion in grants for activities that did not directly support public services. These activities included official residences, vehicles, gardens, fences, multimedia equipment and office furniture.

KPK recommended that regional governments restrict grants to activities directly connected to public services.

Such grants should also receive approval from the recipient’s central institution or internal supervisory body. They must not duplicate national budget allocations.

Kapuas Hulu will implement the policy by removing grants for vertical agencies from its upcoming regional budget planning.



The regency will also review existing assistance arrangements.

The administration said the change would strengthen transparency, accountability and compliance in managing its regional budget, known as the APBD.

It will also allow Kapuas Hulu to direct more public funds toward responsibilities that fall under the regency government. This includes essential services and local development priorities.

The decision only applies to grants for vertical government institutions. It does not automatically remove other legally required or eligible grants, including funding governed by separate election or public-service regulations.

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