Abstract
Budgetary slack occurs because of the potential difference with the revenue budget target. the difference in potential revenue with the revenue budget target indicates the occurrence of individual behavior lowering the income target to facilitate the achievement of the government budget. The purpose of this study is to empirically prove the effect of budget participation, information asymmetry, and job insecurity that trigger budgetary slack. The population of this research is officials of the Indonesian: Regional Working Unit in the province of East Java, Indonesia. The sampling technique used is proportional sampling, the research respondents were 84 people. The results show that budget participation, information asymmetry, and job insecurity have a positive effect on budgetary slack. The high budget participation of public sector employees can trigger budgetary slack. Information asymmetry motivates budget implementers to take action to reduce revenue targets and increase government spending. High job insecurity in the work environment creates pressure on employees so that budgetary slack is created.
Highlights
A budget is a plan regarding the activities of an organization which is stated quantitatively for a certain period and in currency (Choe & Kan, 2021)
The study of (Aditia & Nasution, 2020; Banding et al, 2021) proves that information asymmetry has a positive effect on budgetary slack
The results of the study indicate that the more individuals who participate in budget preparation, the higher the intensity of budgetary slack or employee participation in the budget, will make employees free to determine what will be achieved for their interests, not the interests of the organization or institution (Ariani & Budiasih, 2021)
Summary
A budget is a plan regarding the activities of an organization which is stated quantitatively for a certain period and in currency (Choe & Kan, 2021). Performance appraisals based on budget targets in public sector organizations result in tight budgetary pressures resulting in dysfunctional behavior that will affect the budget process in the coming period Budgetary slack in public sector organizations can be anticipated with budgetary participation policies, minimizing information asymmetry and reducing job insecurity. Information asymmetry in public sector organizations is one of the factors causing the weakness of implementing performance-based budgeting, because everyone is competing to achieve their performance targets in various ways, sometimes in unethical ways. The purpose of this study is to empirically examine the effect of budget participation, information asymmetry, and job insecurity on budgetary slack.
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