<![CDATA[This article employs a normative and comparative legal approach to analyze the legal challenges in addressing village fund corruption cases in Indonesia through the criminal justice system. In practice, prosecuting small-scale cases has prioritized legal certainty but has imposed disproportionate financial and temporal costs compared to the modest value of the offenses. Lengthy trials that end in criminal punishment undermine the cost–benefit principle in criminal justice process and conflict with the ideals of a swift, simple, and low-cost judicial process. Moreover, such proceedings often fail to restore state financial losses effectively. The novelty of this study lies in the proposed threshold-based Deferred Prosecution Agreement (DPA) model, specifically designed to address cases of village fund corruption with limited financial losses. This study argues that resolving village fund corruption outside the courtroom, with a primary focus on restitution of state losses and active involvement of relevant stakeholders, offers greater benefits. Such an approach would better serve the state and society as victims, while also addressing the rehabilitation of offenders. Yet out-of-court settlement mechanisms currently lack a clear statutory basis, creating legal uncertainty in their application. A legal breakthrough is therefore needed by providing explicit regulation for alternative mechanism to resolve village fund corruption. One viable model is the DPAs, which enable prosecutors to suspend criminal proceedings in exchange for restitution, fines, or corrective measures. This study proposes incorporating the DPA model into Indonesia’s anti-corruption framework for cases involving losses of less than 150 million rupiah. Such reform would not only close the legal gap but also enhance the efficiency and effectiveness of efforts to recover state losses from small-scale village fund corruption.]]>
