Analysis of Regional Financial Conditions in Local Governments of Enrekang Regency, South Sulawesi Province, Indonesia

Abstract

Purpose: The aim of this study was to examine the local financial condition of Enrekang Regency for the 2015-2019 fiscal year as an overview of the ability and success of local governments in managing their own local finances. Theoretical framework: The Regional financial condition is the ability of a local government to fulfill its obligations to anticipate unexpected events, as well as to execute their financial rights effectively and efficiently (Ritonga, 2014). The measurements carried out in this study are based on the dimensions of condition measurement proposed by Ritonga 2014, namely short-term solvency, budget solvency, long-term solvency, financial flexibility, financial independence, and service level solvency. Design/methodology/approach: The method used in this research is the descriptive method with a quantitative approach. The data used is secondary data sourced from the Local Government Financial Report Examination Results of Enrekang Regency for the 2015-2019 fiscal year, obtained from the Information and Documentation Management Officer. Findings: The results of this satudy are the financial management in Enrekang Regency is quite good so as to produce a fairly good financial condition as well. Enrekang Regency has a good financial condition in terms of short-term dimensions, budget solvency, financial flexibility and service level solvency. Meanwhile, the regional financial condition of Enrekang Regency is still not good in terms of regional financial independence due to the low local revenue. The regional government still relies heavily on funding sources from outside or relies on transfer funds from the central government. Research, Practical & Social implications: The results of this study are useful as a source of information in making decisions for the local government of Enrekang district and related parties, especially in making policies related to governance, especially in effective, efficient and economical financial management. Originality/value: The value of this research is very useful for the local government as a guide in assessing the condition of government financial health.