The Subdistrict Fund policy was introduced to reduce development disparities and strengthen community empowerment in urban administrative areas. This study aims to analyze the effectiveness of the implementation of West Kotawaringin Regent Regulation Number 18 of 2021 in Arut Selatan District and to identify the factors supporting and inhibiting its implementation. Using a descriptive qualitative design, data were collected through in-depth interviews, field observations, and document analysis involving government officials, community institutions, and community representatives across four selected urban villages (kelurahan). The empirical data were analyzed interactively using George C. Edwards III’s top-down policy implementation framework. The findings indicate that policy implementation remains suboptimal. Policy communication is characterized by fragmented transmission of regulatory guidance, with implementing officials relying primarily on higher-level regulations rather than the Regent Regulation as the principal operational reference. Limited budget allocations and insufficient managerial capacity among implementing officials constitute the main constraints. Furthermore, a discrepancy was identified between strong implementer commitment and weak administrative compliance in participatory planning processes. Structural oversight also remains largely confined to formal compliance audits. The study concludes that resource constraints and weak administrative enforcement reduce policy effectiveness, although the program has generated tangible physical benefits that are directly experienced by local communities.