Psychological Capital Strengthens the Effect of Budget Participation on Budgetary Slack?

Rini Lestari ,Nurleli ,Edi Sukarmanto ,Velda Violeta Ayulestari

doi:10.7176/jesd/12-14-07

Abstract

This research is based on a phenomenon in the Bandung City Government, where there is still a reasonably significant difference between budget targets and budget realization. The existence of budgetary participation and psychological capital are essential factors that are expected to reduce budgetary slack. For this reason, this study aims to examine the effect of budgetary participation on budgetary slack and the effect of budgetary participation on budgetary slack moderated by psychological capital. This research was conducted in 22 Bandung City Regional Offices using verification research methods and quantitative approaches. This study uses primary data collected through the distribution of questionnaires and the determination of respondents is based on non-probability sampling and purposive sampling. By the established criteria, questionnaires were given to treasurers and parties who participated in budgeting at 22 Bandung City Regional Offices. The proposed hypothesis was tested using moderated regression analysis (MRA). The results showed that budget participation had a positive effect on budgetary slack, and psychological capital strengthened the influence of budgetary participation on budgetary slack. This research has implications especially for the Bandung City Government to pay more attention to setting more measurable budget targets, increase more significant influence, and increase confidence in individuals involved in budgeting. Keywords: Psychological capital, budget participation, budgetary slack DOI: 10.7176/JESD/12-14-07 Publication date: July 31 st 2021

Highlights

Performance measures in general are the results that have been obtained by a person or group of people in a company by the authority and responsibility given
The Effect of Budget Participation on Budgetary Slack Based on the results of the t-test that has been carried out above, the results show that the value of the significance level (Sig) of the budgetary participation variable is 0.000
Based on the results of the research and discussion that have been described previously, it can be concluded: 1) Budget participation has a positive effect on budgetary slack

Summary

Introduction

Performance measures in general are the results that have been obtained by a person or group of people in a company by the authority and responsibility given. To achieve this performance, the planning function is indispensable for the company, one of the planning functions is a company budget. Problems often arise in the budget preparation, which is too high, causing the budget too large. It can be shown from the low absorption of the budget itself. Of the budget realization report data budget year 2014 - 2017, from the target of budgets that have been realized over four years is always the differences between the budget that has been set with the realization that has been done, as presented in Table 1 below: Year

Objectives

Methods

Findings

Discussion

Conclusion