This research aims t o analyses the effect of Pendapatan Asli Daerah (PAD) and Dana Alokasi Umum (DAU) on Capital Expenditure in Regency of Ogan Komering Ilir. The results of this research shows that during periods ofyears 2002-2008, PAD and D A U has a strong and significant on Capital expenditure, even in some exact years i t has declining. Declining on effect of PAD and DAU on Capital Expend…