Design and Analysis of Financial Condition Local Government Java and Bali (2013-2014)

Abstract

This research aims to identify financial condition of local government in Java and Bali year 2013-2014. It is due to government financial condition, according to several researchers, provides an image on the ability of a government in fulfilling their obligations whether in the form of debt or service fulfillment in timely manner. According to assessment upon financial condition, local government is able to identify how to fulfill public needs, how to utilize resources and how to proceed resources so that it can be more productive. As for the measurement method of financial condition itself, the standard method cannot be determined. Therefore, indicator used for measuring local government financial condition is Brown's (1993)[2] indicator development adjusted to Indonesian government. In order to develop the indicator, this research employs qualitative method by comparing GASB No.34, SAP Government Regulation (“Peraturan Pemerintah ” - PP) 71 Year 2010, SAP PP 24 year 2005 and literature studies and expert validation. In order to obtain a balanced comparison, this research also employs clusters developed by Baidori (2015)[1] for government in Java and Bali. Results of this research showed that among 7 analyzed clusters, there are variations of results, even though each cluster has similar socioeconomic condition to each other. This variation upon Indonesian local government financial condition is caused by regional autonomy.