At present, there are 3,981 Case Files of State Receivables (BKPN) with a value of more than Rp469 billion. Given the high value of bad debts, it is necessary to have a strong collaboration between the Ministry of Finance as the state financial manager with the ministry, Institutions and regional administrations.
For this reason, the Minister of Finance stipulates regulation No. 137/PMK.06/2022 on the Elimination of Regional Receivables that Cannot be Submitted to the State Receivables Affairs Committee (PUPN).
Regional receivables are regulated in this ministerial regulation as follow:
- regional receivables at regional administrations, regional general treasurers, regional public service agencies
- regional retribution receivables with bad categories that cannot be handed over to PUPN. These receivables consist of regional receivables with a maximum remaining obligation of Rp. 8,000,000 per debtor or equivalent and no collateral is submitted or the collateral has no economic value. Subsequently, regional receivables that do not meet the requirements are submitted to PUPN.
Category of Regional Receivables
Regional receivables with bad categories that cannot be handed over to PUPN will be resolved by the Regional Financial Management Official in accordance with statutory provisions. Regional receivables with bad categories that do not meet the requirements to be submitted to PUPN are regional receivables whose existence and amount are legally uncertain.
Regional receivables that fall into this category are:
a. regional receivables that are not supported by adequate source documents so that it cannot be proven who is the legal subject who must be responsible for its settlement.
b. regional receivables whose amount cannot be ascertained because there are no or unclear source documents or supporting evidence.
c. regional receivables that are still the object of a dispute in a judicial institution.
d. regional receivables that have been submitted to PUPN but returned or rejected by PUPN based on statutory regulations.
Accounts Receivables Write-Offs
The regional accounts receivables write-offs that cannot be submitted to PUPN include conditional write-offs and absolute write-offs. Conditional write-offs and absolute write-offs of regional receivables that cannot be handed over to PUPN can be carried out after a Statement of Optimal Regional Receivables (PPDTO) is issued by the Regional Financial Management Officials.
Collection efforts must be done prior to the issuance of PPDTO. Collection can be done in writing with a bill and/or with optimization activities that consider aspects of efficiency and effectiveness in accordance with statutory regulations.
Regional receivables in the bad debt category are designated as PPDTO with the following conditions:
a. the debtor does not have the ability to settle or his residence is unknown.
b. no collateral is submitted or the collateral has no economic value.
c. the remaining obligation is Rp. 8,000,000- at the maximum.
Issuance of PPDTO
The issuance of PPDTO is based on the following requirements:
- collection letter has been submitted in accordance with the regulations
- bad quality of receivables
- the recorded receivables is more than 5 years and there are no installment or there are installments but less than 10% of the obligations to be paid
- the debtor does not have the ability to settle the debt as evidenced by one or more documents such as a poor family card, bankruptcy verdict, a certificate from the kelurahan/village head office/neighborhood head office/office of the authorized agency/Regional Financial Management Official stating that the debt insurer does not have the ability to settle the debt or the place of residence is unknown, proof of receipt of health insurance for the poor, and proof of collection visits by officers within the regional financial management officer agency.