Rizka Adinda 288594

Responsibility Center in Local Government

To support the operation of government, a good design of management control system is needed. Management control system must be supported with good organizational structure. Responsibility centers is one form of organizational structure that can be applied in local government. Responsibility centers is the organization unit headed by a manager (leader) that is responsible for the activities of his/her unit. Objectives of the responsibility centers:

As a basis of planning, controlling, and evaluating the performance of managers and organizational units they lead To make it easier to achieve organizational goals Facilitate the formation of goal congruence Delegate tasks and authority to units that have the competence, thereby reducing the burden of the central task manager Encouraging creativity and innovation subordinates As a tool to implement the strategy of the organization effectively and efficiently; As a means of controlling the budget.

Responsibility centers manager's responsibility is to create an optimal relationship between inputs used with the resulting output is associated with performance targets. Four types of responsibility centers:

Expense Center: Managers are assessed based on the cost of that has been issued. In the public sector, the output are often interchangeable, but not measured or only measured in physically interchangeable and not within the rupiah.

Examples: Department of Production, Social Services, & Public Works Department.

Revenue Center Managers are judged on their achievements in resulting earnings. Examples: the Department of Revenue & Marketing.

Profit Center Responsibility center who compare the input (expense) with output (revenue) in the monetary unit. Manager's performance judged on profits acquired. Examples: BUMN/BUMD, the local government-owned tourism objects, airports, & harbor.

Investment Center Managers are judged associated with the investments in their unit. For example: Dapartemen Research & Development, and Balitbang.

Local governments may be regarded as a responsibility center. Responsibility centers can be broken down again into the centers with smaller liability to the level of services or programs, such as offices and Sub. The centers are then becomes the basis for planning and budgetary control and performance assessment in the unit concerned. Responsibility center manager, as the budget holder, has responsibility for implementing the budget. Responsibility center obtain the input of resources in the form of labor, materials, thus the input is expected to produce output in the form of goods or services at the level of quantity and quality. The budget reflects the rupiah value of inputs allocated to the centers of accountability and the expected output or level of activity generated. Control of the budget include measurement of real output and expenditures done in comparison with the budget. The existence of the difference or variance between the results achieved with the budgeted then analyzed for a known cause and sought who is responsible for the variance, so that corrective action can be done immediately. Ideally, the structure of responsibility center is as a tool of budget control in line with the program or activity structure of the organization. In other words, for each responsibility center assigned to implement a particular program or activity, and incorporation of the programs of each responsibility center is supposed to support program of responsibility centers on a higher level, so in the end the general purpose of the organization can be achieved.