Abstract
This study is based on the low success of local governments' financial performance in West Java Province, as evidenced by the fact that financial reports of local governments that receive unqualified opinions are still being found. The detection of numerous frauds in local governments is responsible for the majority of incidents of poor financial performance in local governments. Local government financial performance is related to local government size, dependence on central government, local spending, and audit findings. The purpose of this study was to examine the influence of local government characteristics and audit findings on the financial performance of local governments. Techniques analyzing data used regression model selection test with STATA version 16. This study builds on agency theory to develop a conceptual framework that connects local government size, dependence on central government, local expenditure, audit findings, and financial performance. The results of this study show that the size of local government, local spending has a significant effect on local government financial performance based on independence ratio and operating expenditure activity ratio, local government financial performance is unaffected by the dependence of central government or audit findings. Contributions to the West Java Provincial Government are required to be taken into account when making decisions and policies for the improved financial performance of local government.
Highlights
The public sector in Indonesia shows significant enthusiasm in the well-being of the community through, the various services provided, this is reflected in the number of local governments that actively realize the wellbeing of their regions by proving good annual performance reports
The purpose of this study was to examine the influence of local government size, dependence on central government, local expenditure, and audit findings on financial performance
Local governments' financial success is unaffected by their reliance on the federal government. This means that whether the level of reliance on the central government rises or falls, the financial performance of local governments does not suffer in the same way, implying the opposite of reliance on the central government
Summary
The public sector in Indonesia shows significant enthusiasm in the well-being of the community through, the various services provided, this is reflected in the number of local governments that actively realize the wellbeing of their regions by proving good annual performance reports. The high enthusiasm of the public sector in Indonesia is due to the implementation of various policies and development programs. The community demands local governments in terms of improving financial and non -financial performance through various more creative and innovative programs to optimize the various local potentials available. The government must be responsible for reporting all activities carried out so that its performance can be evaluated by the parties concerned and the community. If the government's performance is felt to have good implications for the development of public services, the growth of positive value-added from investment is higher.
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