Local Government Financial Performance Research Articles

REGIONAL REVENUES, AUDIT OPINIONS, LOCAL GOVERNMENT FINANCIAL PERFORMANCE: THE MODERATING ROLE OF CAPITAL EXPENDITURE

The existence of regional autonomy policies causes regional governments to have their respective authorities in administering government. It encourages increased performance and accountability. In addition, the Covid-19 outbreak that has hit has made people increasingly pay attention to the performance of local governments. This research examines the factors influencing the financial performance of local governments in districts/cities in South Sulawesi. The independent variables used are regional revenue and audit opinion. This study also aims to investigate the effect of capital expenditure as a moderator in the connection between the independent and dependent variables. This study employs secondary data from www.djpk.kemenkeu.go.id and https://e-ppid.bpk.go.id/, as well as multiple linear regression analytic approaches. This research finds that regional revenue significantly negatively affects local government financial performance. In addition, audit opinions significantly positively influence financial performance. However, capital expenditure does not have a moderating role in these two relationships.

Political Budget Cycles and Mayoral Influence in Latvian Municipalities: An Examination of Revenue, Expenditure, and Electoral Dynamics

Budget allocation and budget planning can be used in different ways. In addition, it can be part of a political budget cycle. Previous research has highlighted the political budget cycle's existence in European countries, demonstrating its impact on public revenue and expenditure near elections. However, citizens often lack awareness of this phenomenon, underscoring the need for vigilant scrutiny. In addition, elected politicians increasingly rely on voters for support, targeting them during budget allocation and election campaigns. In Latvia, the mayors have a role in budget planning because they work full-time and are the head of the financial commission. In Latvia, despite a lack of trust in local politicians, there is a tendency for most of the mayors to be re-elected. The article aims to examine what kind of role the council’s chairperson has in the local government's budget allocation process and what factors affect the budget allocation process in Latvia. The article’s scope encompasses the years 2009 to 2017, spanning two election terms (2009-2013; 2013-2017), and focuses on eight state cities in Latvia, excluding the capital city, Riga. Notably, local governments with a higher percentage of council members from the mayor's party tend to exhibit higher expenditure levels. The findings of this study suggest that various socio-economic and political factors impact the financial performance of local governments in Latvia. These results underscore the significance of population and unemployment in shaping local government expenditures. Simultaneously, this research has highlighted the importance of political factors such as the majority in the local government and time spent in the mayor’s position. Moreover, it reveals that long-serving mayors and a majority in the council also influence budget allocation decisions. This article's implications can guide policymakers in making informed decisions regarding municipal budget expenditures and revenues.

Pengaruh Pendapatan Asli Daerah, Dana Perimbangan dan Belanja Modal terhadap Kinerja Keuangan Pemerintah Kabupaten/Kota di Pulau Sumatera Tahun 2021

This study aims to analyze the effect of local original income, balancing funds, and capital expenditure on the financial performance of district/city governments on the island of Sumatra in 2021. This study used a quantitative approach. The samples taken in this study were based on predetermined criteria. The results of the sample selection of 106 regional governments which are Regency / City regional governments on the island of Sumatra in 2021. Multiple regression analysis to test the hypothesis was carried out using SPPS 29 which showed the results of the study that local original revenue had a significant positive effect on local government financial performance, while balancing funds and capital expenditure had a significant negative effect on local government financial performance.

The Development of Local Government Financial Performance Research in Indonesia in the VUCA Era: A Conceptual Review

This study aims to provide empirical evidence on the development of Government financial performance research in Indonesia. Researchers identified articles with financial performance cause-and-effect relationships. This study analyzed 18 articles on government financial performance in Indonesia obtained from 13 nationally accredited journals indexed by the Ministry of Research, Technology and Higher Education (Kemenristedikti), namely Sinta 1 and Sinta 2. The researcher classified the articles based on the variables used, then analyzed them using the charting field method. This study found that financial factors such as expenditure, intergovernmental revenue and leverage are more frequently used in research. In addition, there are some variables that give inconsistent results and should be studied further to find these inconsistencies. VUCA indirectly creates new trends that are important for practitioners and academics.

Determinan Kinerja Keuangan Pemerintah Daerah dengan Belanja Modal sebagai Variabel Moderating (Studi Empiris Pada Kabupaten/Kota di Provinsi Jambi)

Regional Budget of Revenue and Expenditure Management in Jambi Province is not yet optimal, due to the inadequate ratio between direct and indirect expenditure. The purposes of this research are to: 1) examine the impact of District Own-Source Revenue and equalization fund 1individually towards local government financial performance on regency/city of Jambi Province 12016-2020; 2) examine the significance of District Own-Source Revenue and equalization fund impact simultaneously towards local government financial performance on regency/city of Jambi Province 12016-2020; dan 3) examine whether capital expenditures is capable to become the moderating variable 1between District Own-Source Revenue and equalization fund with local government financial performance on regency/city of Jambi Province 2016-2020. This research uses the type of causal research. The population of this research is regency/city government in Jambi Province which consists of 9 regencies and 2 cities. Data analysis technique that is used in this research is multiple linear regression analysis. The result indicates that: 1) individually District Own-Source Revenue gives positive and significant impact towards local government financial performance, meanwhile equalization fund gives negative and significant impact towards local government financial performance; 2) both District Own-Source Revenue and equalization Fund significantly impact local government financial performance; and 3) based on residual test results, it shows that capital expenditures is the only variable that is able to moderate the correlation between District Own-Source Revenue towards local government financial performance.

The Effect of Capital Expenditure on Regional Financial Performance With Local Original Income as an Intervening Variable in Districts and Cities in NTT Province in 2017-2021

The research aims to analyze the influence of capital expenditure for local government financial performance through local government revenue as intervening variables. The sampling technique in this study is to use the purposive sampling method. The object of this research is all districts and cities in NTT, with a sample of 22 districts and cities. The data used is a type of secondary data, which was obtained from the realization of the 2017-2021 district and city revenue and expenditure budget (APBD) in NTT. The results of this study indicate that capital expenditures have an influence on local government revenue, and local government revenue has an influence on local government financial performance. Apart from that capital expenditures have a local government financial performance, with all of them having a positive correlation. The local government revenue is able to mediate the relationship between capital expenditures on local government financial performance.

COMPARISON OF THE FINANCIAL PERFORMANCE OF REGIONAL GOVERNMENTS IN INDONESIA BEFORE AND DURING THE COVID-19 PANDEMIC: A LITERATURE REVIEW

This journal manuscript is the result of a literature review analyzing approaches to evaluating regional government financial performance in Indonesia before and during the COVID-19 pandemic. This research uses a systematic literature review method with a sample of 20 articles. The results of the analysis show that the independence, efficiency and effectiveness ratios are the main ratios used in evaluating regional government financial performance. The COVID-19 pandemic has had a significant impact on financial performance with the majority of studies recording a decline in performance in 2020, although some cases experienced an increase. Further research is needed to understand the long-term impact of the pandemic on the financial performance of local governments in Indonesia.

Analysis of the financial performance and financial ratio analysis of the regional government of North Sumatra province for the 2016-2022 fiscal year

Regional autonomy is the right, authority, obligation of regions to regulate and manage their own households in accordance with applicable laws and regulations in accordance with Article 1 of UU No. 32 of 2004. The implementation of the regional autonomy system requires regional government officials to be able to manage finances in their regions. effectively and efficiently. The aim of this research is to compare government financial performance in districts/cities in North Sumatra. By examining the results of previous research, and wanting to see the differences between each study in using theory and research methods. The research was carried out by SLR method with content analysis techniques and literature review methods, namely reviewing the differences in the content of each article. The research population is all articles related to the financial performance of regional governments in North Sumatra. The research sample was 4 articles related to the financial performance of local governments in North Sumatra and the sample was selected using purpose sampling.

Fiscal Independence of the Regional Government of Kupang Regency in the Implementation of Regional Government Affairs

The financial performance of the Kupang Regency regional government is important information in making regional financial management policies. One tool for analyzing local government financial performance is by analyzing financial ratios. This research aims to analyze the fiscal independence of the Kupang Regency regional government in 2017-2021. This research is a case study research conducted at the Regional Financial and Asset Management Agency. Data collection using interviews and documentation The results of the research show that the degree of fiscal decentralization over the five year period (2017-2021) is on average 7.5% and Fiscal Independence is on average 6.52% which based on the criteria is categorized as very low This means that regional financial capacity to finance its activities is still very lacking and is dependent on the central government.

Factors affecting financial performance in regional governments, legislative measures & audit findings of The Financial Audit Agency (BPK)

The aim of this research is to identify the determinants of financial performance of both the central government and regional governments. This research uses a meta-analysis approach with a sample of several articles, both from academic journals, theses or theses that examine government financial performance published from 2015 to 2022. The results of the research show that there are several factors that determine regional government financial performance, namely the level of wealth regions, size of local government, leverage, local tax revenues, audit findings. On the other hand, the level of dependence on central government, capital expenditure and legislative size are not proven to be factors that influence local government financial performance.

Analysis of Financial Ratios to Assess Performance Regional Government Finance of Kediri City and Trenggalek Regency 2019-2021

The research aims to analyze financial ratios to assess the financial performance of local governments in Kediri City and Trenggalek Regency in 2019-2021. Research results 1) The independence ratio of the Kediri City Government in 2019-2020 shows a low independence ratio with a percentage of 26% and 27%, while for 2021 the independence criteria shows medium with a percentage value of 42%. The results with the Trenggalek Regency Government from 2019-2021 show a very low independence ratio. The effectiveness ratio in the city of Kediri in 2019-2021 shows the same result, which is very effective. The percentage results in 2019-2020 have the same value, which is 17%, while in 2021 it has a percentage of 15%. 2) The effectiveness ratio in the Kediri City Government in 2019-2021 has a percentage value greater than 100% so that it can be interpreted that the effectiveness ratio in this government is very effective. in 2019 it has a percentage of 107%, in 2020 it has a percentage of 110% and in 2021 it has a percentage of 168%. The results of the Trenggalek Regency Government in 2019 and 2021 have percentages of less than 100%, namely 95% and 91%, which means they are quite effective, while in 2020 they have a percentage of 101%, which means they are very effective. 3) The Efficiency Ratio in the City Government of Kediri in 2019 has a percentage of 94% which means efficient, in 2020 it has a percentage of 94% which means efficient and in 2021 it has a percentage of 89% which means efficient.

INFLUENCE OF GENERAL ALLOCATION FUND, SPECIAL ALLOCATION FUND, AND CAPITAL EXPENDITURE ON FINANCIAL PERFORMANCE OF LOCAL GOVERNMENT

The goal of the research is to ascertain how capital expenditures, special allocation funds, and general allocation funds affect government financial performance as evaluated by regional financial independence. Through capital expenditure, special allocation funds, and general allocation fund, local governments can build infrastructure that will provide long-term benefits, provide services to the public, and develop regional investments. The Minister of Finance of the Republic of Indonesia in 2021 highlighted the very low realization of the regional government budget reports. The data used is the Financial Reports of the Regional Government, namely the budget as well as realization report, transfer to the region and village fund report, and regional government budget reports from Regencies and Cities of North Sumatra Province for 2017-2022. The population is 33 regencies aswell as cities in North Sumatra, with a total sample size of 198. Panel data regression using saturated sample approaches is the analytical approach used. Measurements for capital expenditures, special allocation funds, as well as variable general allocation funds are made using realized values represented in rupiah. This research also provides an international perspective to show that general allocation funds and capital expenditure have a significant positive influence on local government financial performance, and special allocation funds have a significant negative influence on local government financial performance.

Analisis Kinerja Keuangan Pada Anggaran Pendapatan Dan Belanja Daerah (APBD) Kabupaten Kebumen

Measuring financial performance is very important in assessing the accountability of local governments in managing local finances. The development of government financial performance can affect the community, because the greater the ability of a region to explore regional potential, not only to provide funds for the implementation of governance and regional development, but also to realize maximum services for the community. In analyzing the financial performance of local governments, it can be done by looking at the performance of the Budget Realization Report (LRA). This study aims to analyze the financial performance of the local government of Kebumen Regency in 2017-2021 based on the Ratio of Degrees of Fiscal Decentralization, Regional Financial Dependence, Regional Financial Independence, Effectiveness of Regional Original Revenue and Efficiency of Regional Original Income. The analysis technique used is quantitative descriptive. The data used is secondary data in the form of Kebumen Regency APBD and LRA reports for 2017 – 2021 obtained from the official website of www.djpk.kemenkeu.go.id. The results of this study show the financial performance of the local government of Kebumen Regency in 2017 – 2021 based on the Fiscal Decentralization Degree Ratio with an average of 15.09%, based on the Regional Financial Dependence Ratio with an average of 23.49%, based on the Regional Financial Independence ratio with an average of 64.59%, based on the average Regional Original Revenue Effectiveness ratio of 117%, and based on the Regional Original Revenue Efficiency ratio with an average of 98.87%.

New Public Management Practices and Financial Performance of Local Governments in Cameroon

During the previous two decades of this millennium there has been a succession of reforms from New Public Management (NPM) to New Public Governance (NPG) in public organisations in line with the strategic development visions of governments the world over. Central to this is the adoption of private style management techniques to enhance efficient performance in public sector development endeavours. Consequently, a handful of private management practices such as accrual accounting, professionalism, outsourcing, and the use of ICT were introduced in the Local Government of Cameroon. This study sets out to assess the relationship between these NPM practices enshrined in the governance processes of councils and financial performance in Local Governments of Cameroon. The study employs a mix of survey-based research with a triangulated method of data collection. Questionnaires and documentary research are used to collect both financial and non-financial data. From a population of 374 councils in Cameroon, 50 councils and their financial statements as well as books of original account entries are sampled and grouped according to statutory council categories. Both descriptive and inferential techniques are used to know the levels of NPM practices and their effect on financial performance. The results show that professionalism and outsourcing have a positive performance outcome, while accrual accounting and the use of ICT are negative. However the combination of all NPM practices in general is positive. For an efficient performance in the public sector there is need to gradually sequence the integration of NPM practices in the governance and management processes, based on the budget size of public sector entities. There is no one-size fits all policy for the wellbeing of public sector entities.

Analysis Of Local Government Financial Performance Based On The Method Value For Money

The purpose of this study was to determine the financial performance of the Makassar City Government based on the Value For Money (VFM) method, namely to analyze the measurement of economic ratios, efficiency and effectiveness (3E). The type of research used is quantitative with a quantitative descriptive approach, namely collecting data, compiling, interpreting, and analyzing it so as to provide conclusions about local government financial performance using Value For Money. The data used is secondary data, namely data on the financial reports of the Regional Revenue and Expenditure Budget (APBD) of the Makassar City Government. The results of the indicate that the economic and efficiency ratios have met the Value For Money standard so that the budget can be more targeted and enjoyed by the community, while the effectiveness ratio has not met the Value For Money standard but there is still a need for continuous improvement in public services so that the effectiveness of government performance is achieved even better in the coming year. But the performance of Makassar City Government as a whole is good.

Determinants of Local Government Financial Performance in Indonesia

Regional autonomy is expected to promote financial performance and people’s welfare. This study investigates factors that affect local governments’ financial performance in Indonesia, where performance is defined as the ability to generate local revenues. To test our hypothesis, we used panel data regression analysis. From 2012 to 2019, this study collected 3,747 observations on municipal governments. The dependent variable is local government financial performance, while the independent variables include region size, capital spending, financial reporting quality, audit recommendations, and the horizon problem. We find that the size of the local government, financial reporting quality, and the follow-up on audit recommendations positively affect financial performance. Larger local governments have more resources to generate revenues. High financial reporting quality and accountability are supposed to improve public trust and increase their willingness to make contributions through local tax payments. Capital expenditure, on the other hand, is associated with lower financial performance. This study contributes to the literature on financial performance, especially in the public sector, by providing empirical evidence on factors affecting local government financial performance. This study provides insight to stakeholders by providing evidence on the role of size, capital spending, audit opinion, and follow-up of audit recommendations in accelerating the improvement of financial performance. 
 
 Received: 13 July 2023 / Accepted: 25 August 2023 / Published: 5 September 2023

Asymptotic Significance Test on Financial Performance in Papua Province Government

Purpose: This study analyses the financial performance of Papua Province's regency and city administrations from 2015 to 2021 in terms of regional independence, dependency, and harmony. Theoretical framework: Every local government should consistently, somewhat, equitably, and democratically enhance the services it provides to the community. The effectiveness of controlling these potentials can also be used to gauge the local government's financial performance. The regional budget serves as the government's indicator for assessing its capacity to finance the execution of development initiatives. Design/methodology/approach: Uses secondary archive data (APBD) retrieved from the DJPK database for the years 2015-2021. Various assessments, including the dependency ratio, the independence ratio, and the harmonization ratio, are used to evaluate the financial success of the previous years. The Asymptotic Significance with Kolmogorov-Smirnov test is used to determine the difference in financial performance. Findings: (1) Papua Province's financial performance between 2015 and 2021 shows that the ratios of independence are still deficient (below 25 percent) with the relation pattern with the central government in the instructional category, that regional dependency still revolves in very high criteria, and that the harmonization ratio is an average of 22.40 percent, with a perception of higher than national level 5-20 percent. (2) From 2015 to 2021, there is no substantive distinction between the regency and city's financial performance in the province. Research, Practical & Social implications: The imperative for in-depth research on regional financial performance in Indonesian provinces are linked to other variables such as regional loans or government policy that makes loans one of the regional sources of income. Improve the amount and quality of human resources in regional financial management, which naturally alters the regional financial management system. Originality/value: To improve the region's financial performance, the local government must increase local income through polling business more intensively and effectively. Local governments must establish more income targets with projections, modify rules relating to PAD improvement activities, and identify new PAD sources.

Declining financial performance of local governments in Indonesia: An empirical study during Covid-19

This research focuses on assessing the financial performance of Regency/City Governments in Central Java Province after refocusing their budget during the COVID-19 pandemic in 2021. Budget Refocusing is a government policy to cope with the impact of the COVID-19 pandemic. This policy certainly has an impact on the financial performance of local government. The calculation process to measure the financial performance of local government using formulas adopted from the research and development section of the Ministry of Home Affairs as well as the Faculty of Social and Political Sciences, Gadjah Mada University, and applied in previous research to calculate financial ratios such as the local government fiscal decentralization, local government financial dependency, regional original income (PAD) effectiveness, and capital expenditure ratios. The results showed that 71.43% of local governments have financial capability in the less category, 62.86% in the moderate category, and 45.71% have a PAD effectiveness ratio in the very effective category. Moreover, the average capital expenditure ratio for the governments was found to be 11.47%.

Pengaruh Leverage, Jumlah Penduduk dan Umur Pemerintah Daerah terhadap Kinerja Keuangan Pemerintah Daerah: Studi Empiris pada Kabupaten/Kota Provinsi Sumatera Barat Periode 2016-2020

This study aims to determine the effect of leverage, population and age of local government on local government financial performance. The population in this study is Regency/City in West Sumatra Province in 2016-2020. This study uses secondary data. The sampling technique used the total sampling method with a sample of 19 districts/cities with a period of 5 years. This study uses multiple linear regression analysis on hypothesis testing. The results showed that the leverage and age of the local government had a positive and significant effect on the financial performance of the local government. While the population has a negative and significant effect on the financial performance of local governments.

ANALYSIS OF REGIONAL REVENUE AND EXPENDITURE BUDGET FOR KEDIRI REGENCY DURING THE COVID-19 PANDEMIC

The existence of the Covid-19 pandemic has had an impact on all economic sectors including the financial performance of local governments. Regional financial analysis is a tool that can be used as a benchmark to assess the extent to which local government performance is managing its finances. Regional ability to manage finances is described in the form of APBD which directly or indirectly reflects the ability of local governments to finance the implementation of governmental tasks, development and community social services. The purpose of this study was to determine the financial management performance of the Regional Government of Kediri Regency based on the analysis of financial ratios in the Kediri Regency APBD. This research is a data series research, namely the Realization of APBD data for 2020 to 2022 in Kediri Regency. The analysis used is normative juristic with a descriptive approach case study method. The analysis tools used are tax ratio, per capita tax, regional fiscal space, regional dependency ratio, ratio of personnel expenditure to total regional expenditure, ratio of capital expenditure to total regional expenditure, ratio of capital expenditure to population, ratio of financial aids expenditure to total regional expenditure, idle funds, growth ratio, effectiveness ratio, and efficiency ratio. From the results of the analysis it is known that the majority of APBD performance during the Covid-19 pandemic had fluctuations.