Local Governments In Indonesia Research Articles

The Effect of Budget, Audit and Government Performance: Empirical Evidence from Indonesian Regional Governments

The development of public sector accounting was now propelled by stakeholder demands on bureaucratic performance, accountability and transparency, to pay close attention to tax revenues and expenditures with due regard to financial governance through positive auditing results. The Indonesian government enacted a new rule of Government Accounting Standard No. 71 of 2010 which fundamentally changed the form of government accounting books. The impact of these changes on budgeting, auditing and government performance in the early days of their implementation is crucial as a basis for reference for later reforms. This study aims to examine empirically the effect of audit opinion on the performance of Indonesian local governments by considering the mediating effect of revenue and expenditure realisation based on legitimacy and public choice theories. Data from 32 provinces in Indonesia during the 2010-2014 period with a total number of 150 observations (province-years) was analysed by least square regression. The research found that, in line with legitimacy theory, the previous year’s audit opinion had a significant and positive effect both directly and indirectly through the realisation of regional expenditure as a mediating variable on the performance of local governments. However, regarding public choice theory, the results must be carefully interpreted as the mediating effect of the realisation of expenditure on how audit opinions affect the performance of the provincial government depending on the measurements used. The result may be used by the government, provincial government, local parliament and the Audit Board of Indonesia in policy setting, supervision and inspection in improving the performance of the provincial government. Audit opinion, in relation to the realisation of government expenditure and its function, indirectly boosts the performance of local government in developing countries.

Examining the factors influencing Indonesia's local government’ intentions to use financial management information systems: the case for an extended TAM

This paper examines the factors that influence the intention to use FMIS in Indonesia’s local governments, especially in East Java region. The study model used the Technology Acceptance Model (TAM) that focuses on two specific salient beliefs-perceived ease of use and perceived usefulness. However, this has not discouraged researchers from incorporating additional constructs to the original model in their quest for increased predictive power. Here, an attempt is made to explain local governments' intention to use FMIS. Besides perceived ease of use and perceived usefulness, compatibility, external technical support, and management support are included in an extended TAM. The research data was obtained through questionnaires to 180 respondents of planning and financial managers at 9 local governments of the East Java region. The data analysis method used SEM-PLS with the SmartPLS 3.0 application. The results of this study showed that perceived usefulness and perceived ease of use are influenced by compatibility, external technical support, and management support. Compatibility also influenced intentions to use FMIS, and perceived ease of use influenced perceived usefulness. Intention to use FMIS was also affected by perceived usefulness and perceived ease of use. Lastly, perceived usefulness and perceived ease of use did not create a mediating effect between external variables and intention to use FMIS. This study concludes that TAM and external variables affect interest in using FMIS.

The Moderating Role of Natural Resources Between Fiscal Decentralization, Government Internal Audit, Law Enforcement and Corruption: Evidence from Indonesian Local Government

This research is a quantitative study which aims to examine the level of corruption in the Indo- nesian local government with its influencing determinants, namely fiscal decentralization, gov- ernment internal audit, and law enforcement and natural resources as moderating variables. The population in this study is the district and city governments in Indonesia. The sample in this study consisted of 81 district governments and 33 city governments based on the purposive sampling method with the criteria of district and city governments having permanent legal force corruption cases in 2019. Testing the hypothesis in this study using Moderated Regression Analysis (MRA) with the SPSS Version 24 program. The results showed that fiscal decentralization had a significant effect on the level of corruption, government internal audit and law enforcement had no significant ef- fect on the level of corruption, natural resources had a significant effect on moderating the effect of fiscal decentralization on the level of corruption. This research was conducted to examine and analyze the factors that can influence the level of corruption in local governments. In addition, with this research, it can be seen how local governments carry out their government affairs and the role of local governments in suppressing the level of corruption.

An Institutional Explanation of the Role of Legislature Accountability in Local Government Budgetary Decision-Making

Legislature plays an important role to ensure accountability in the budgetary decision-making of the Indonesian local government. The legislature's accountability role in budgetary decision-making concerns the Indonesian local government. Thus, this research investigated the legislature’s accountability role in the budgeting process and institution's budgetary decision-making. It also examined the planning and budgeting documents in the budget policy-making by the legislature from the Institutional perspective. This research used a qualitative approach and selected three (3) local governments in Indonesia as case study sites. The three case study sites selected represented local governments with high, medium and low fiscal capacity. Data were collected using interviews with 19 budget actors from the three case study sites. The findings revealed institutional weaknesses in the form of norms and rules about legislature in their regional decisions. The regional decision-making and discussions or forums on budget spending and financing among the legislature were found to be politically driven and lacked focus on technical matters such as value for money. The findings of this research provide some basis for strengthening the regulation by central government authorities regarding the role of the legislature in decision-making based on the principles of transparency and accountability. Keywords: legislature, local government, budgetary decision

COMPARATIVE LOCAL GOVERNMENT RESPONSE TO COVID-19 IN DIFFERENT COUNTRIES: CASE IN GAMBIA AND INDONESIA

This study aims to evaluate the performance of two different local governments in two different nations using decentralization and policy implementation theories. It will also provide a general overview of the situation in these two nations at the time that Covid-19 began to spread. Using a comparative case study (CCS), this study compares local government response to Covid-19 in Gambia and Indonesia. In this study, the pandemic Covid-19 was given the same effect in each country but produced different results depending on government activities in each country. When the first Covid-19 cases appear in their countries, Gambia and Indonesia face a similar problem, but they also have a similar strategy for dealing with this pandemic outbreak. The Gambian government provides food, personal protective equipment (PPE), and essential sanitary items, as have several local governments in Indonesia. Gambia and Indonesia also establish a task force (both central and local government) to control virus spread, which becomes a key action in both countries' management of the Covid-19 outbreak. This research find that the role of local government in translating policy from the central government becomes critical to a region's success. A country's central government must not only maintain good performance in areas where it already excels, but also provide education and strong attention to local governments that are still struggling in order for them to improve their performance.

Financial Statements Disclosure On Indonesian Local Government : IPSAS And PSAP Disclosure Approach

The objective of this research is to assess and analyze the effect of political culture, government financial, government size, and economic growth on Indonesian local government’s financial reporting disclosure. The financial reporting disclosure of government, particularly the locals, is an important aspect for the fulfillment of users’ need for information. The sample of this research is 320 research data from 64 Indonesian local governments that meet certain criteria. The multiple regression analysis performed on the data has led to findings political culture expressed with the level of openness of local governments and large measures of government is a factor for informants to disclose information in accordance with the provisions of international standards and local governments to be more open. While government finance and economic growth do not influence local governments to disclose information. This is because governments that have better financial conditions tend to have less information disclosure rate. This research can be used by local governments to evaluate their information disclosures and to improve them by referring to applicable standards, guided by IPSAS, and can be used by the committee to enhance the related standard rules.

Ideational Factors in the Paradiplomacy Activities of Indonesian Cities

Indonesian local governments conduct paradiplomacy activities after the central government implements the regional autonomy regulation. Several cities in Indonesia have established cooperation with other cities in other countries, including nongovernment organizations. Economic factors such as trade and investment, and local development are the driving factors of this cooperation. However, ideational factors, such as identity, cultural similarity, and historical aspects, may influence the decision of Indonesian cities to conduct paradiplomacy. This study discusses ideational factors for explaining paradiplomacy activities in Indonesia and focuses on city identity by examining the sister city cooperation of Bandung and Surabaya. By adopting the constructivist perspective in international relations (IR), this study finds that personal identity (corporate and type identity of city) influences local governments’ selection of city partners and cooperation fields. However, corporate identity is the driving factor for a sister city, and the type identity becomes the identity that is projected, constructed, and strengthened in the activities of the sister city. Theoretically, this study supports the adoption of IR theories that mainly explain the behavior of the state to elucidate these sub-national actors’ behavior in their international activities.

TRANSFORMASI DIGITAL PEMERINTAH DAERAH DI ERA SOCIETY 5.0: STUDI KASUS DI PROVINSI JAWA BARAT

Society 5.0 relies heavily on the Internet of Things, Big Data, Artificial Intelligence, and Robotics to address a variety of social concerns and issues. The government, particularly local governments, faces the problem of maximizing the use of digital technology to improve public services and governance. Better governance facilitated by digital transformation will not only have an effect on public services, but will also increase citizen involvement and stimulate economic growth. This study examines the local government of West Java province's digital transition towards a digital province in the era of society 5.0. This study employs a qualitative approach and descriptive methodologies. The findings of the study indicate that digital transformation in local government in Indonesia lags behind other nations, particularly those in Southeast Asia. This is due to various constraining factors, including a lack of implementation uniformity, insufficient human resources, inconsistent infrastructure, a lack of community participation, and a lack of government commitment. The regional government of the province of West Java is undergoing a digital transformation, which includes the implementation of the West Java Digital Service (JDS), which includes a digital village as one of its initiatives.

Maturity of Internal Control System, the Capability of Internal Auditors, and Performance Accountability in Local Governments

While research on the accountability of local government performance has grown significantly, little attention has been paid to the critical success factors, particularly the role of the maturity of the government's internal control system and the capability of the government's internal auditors. This study examines the effect of the maturity of the government's internal control system and the capability of the government's internal auditors on the accountability of local government performance, with control variables, namely audit opinion, local own-source revenues, and proliferation status. It aims to fill the gap using the Indonesian case. This study uses secondary data with sample selection using the purposive sampling method. Local governments in Indonesia from 2017 to 2019 are used as samples. The results of this study indicate that the government's internal control system's maturity, internal auditors' capability, and audit opinions positively affect local governments' performance accountability. In contrast, local own-source revenues and proliferation status negatively impact local governments' performance accountability. The implication of this study is to increase the accountability of local government's performance and continue to improve the maturity of the government's internal control system to achieve at least level 3 (Integrated). The capability of internal government auditors needs to achieve at least level 3 (Defined); thereby, the internal control function of local governments can be optimal.

Analysis of potential factors of financial statement disclosure: Evidence from Indonesian local government

This study explores the relationship between the number of local parliamentarians, local government budget expenditures, Java/non-Java jurisdiction, liabilities, and Local Own-source revenue and financial statement disclosure. It relies on multiple theoretical frameworks and uses a sample of 180 local government financial reports in Indonesia for 2021 that have been audited by the Indonesian National Audit Board. Using the SPSS Version 25 program, multiple regression analysis was used in this study to assess hypotheses. The results found that Java/non-Java jurisdiction (β = 0.259; p < 0.05) and Local Own-source revenue (β = 0.321; p < 0.05) affect the disclosure of financial statements. In addition, the number of local parliamentarians (β = 0.071; p > 0.05), local government budget expenditure (β = 0.038; p > 0.05), and liability (β = 0.005; p > 0.05) does not affect the disclosure of financial statements. The contribution to local government is to analyze potential aspects related to the government’s increased pressure to make financial statement disclosure. The use of information technology to meet social demands more effectively and efficiently is one option for regional governments to disclose their financial statements.

EFEKTIVITAS PENYELENGGARAAN DEKONSENTRASI SEBAGAI WEWENANG GUBERNUR DALAM KEDUDUKAN SEBAGAI WAKIL PEMERINTAH PUSAT DI DAERAH

Deconcentration is an important element in the administration of the state. Its existence is not only in administrative law order, but also in Constitutional law because - like decentralization - it concerns the foundations and organization of the state. If decentralization gave birth to local government (autonomous region), then deconcentration gave birth to local state government (administrative area). These administrative areas are headed by what is known theoretically as a Prefector. For the Indonesian context, the prefector is held by the governor in such a way that the governor has a dual position, namely as the head of the autonomous region of the province as well as the prefector. The laws governing local government in Indonesia use the term representative of the center in the regions for the designation of prefector. Since the reformation until now, the administration of government from the center to the regions seems to have marginalized deconcentration as the governance structure. There was a strong impression during the reform era that looked at deconcentration as if were the antithesis of democracy. The impression was so strong that deconcentration and administrative areas were no longer included in the post-amendment 1945 Constitution. The deconcentrative authority possessed by the governor to revoke Regency/City Regional Regulations (Perda) that are contrary to higher laws, public interests, and decency, was annulled by the constitutional court in its decision in 2016. Furthermore, budgeting and regulation and formation the apparatus that assists the governor as the central representative in the regions appears to be running slowly. In this way the question arises: is the implementation of deconcentration effective by the governor as the representative of the central government in the regions? To answer this question, research was carried out on the implementation of the deconcentration. The results of the research show that the implementation of the deconcentration has not been effective due to various limitations: limited tools, limited rules, and limited authority

The Influence of Local Government Financial Factors on the 2021 Budget Forecast Error: Studies on Local Governments in Indonesia

The APBD aims to coordinate financing within local government and create transparency in local government budgets. The components of the APBD consist of regional income, regional spending and budget financing . In the process of preparing the APBD, the structure and contents of the APBD are adjusted to the needs of government administration and regional government revenues within one fiscal year. This type of research uses a quantitative approach with a research design of hypothesis testing studies . In sample research, this research uses purposive sampling with the aim of obtaining a representative sample according to the criteria, namely the Provincial Government which has the highest SILPA in 2021. The dependent variable Budget Forecast Errors has an average of 1.39 and a maximum value of 9.45. The minimum value is 0.91 and the standard deviation value is 1.79. These results can be explained that the Regional Original Income variable has a high average value when compared to the standard deviation, which is 103.74 greater than 12.84. The independent variable Balancing Fund has an average value of 100.62, a maximum value of 106.85, a minimum value of 95.66, and a standard deviation value of 3.26. These results can be explained that the average value of the Other Legal Regional Income variables is relatively high when compared to the standard deviation, which is 114.74 greater than 43.78. The independent variable Direct Spending has an average value of 91.21, a maximum value of 115.34, a minimum value of 58.88, and a standard deviation value of 13.42.

FORMULASI RASIO KINERJA KEUANGAN PEMERINTAH DAERAH DI INDONESIA PERSPEKTIF MAQASHID SYARIAH

This study aims to formulate ratio to measure the financial performance of local governments in Indonesia with a maqashid sharia perspective. This research is qualitative research with an exploratory approach. The results show that there are eleven elements of the ratio that can be used in measuring the financial performance of local governments in Indonesia with the maqashid sharia perspective. Objective of Individual education are measured by the ratio of education spending, the ratio of planning and research spending, the ratio of spending on human resource development, and the ratio of communication and information spending. Objective of creating justice, it is measured by the ratio of financial flexibility, functional distribution ratio, and the ratio of interest-free products. Meanwhile, objective of public interest, it is measured by budget solvency ratio, financial independence ratio, local government transfer ratio, and investment and fixed asset ratio.

Local government officials’ susceptibility to corrupt behavior: some Indonesian evidence

PurposeThis paper aims to investigate the factors affecting local government officials’ susceptibility to corrupt behavior among Indonesian local government officials.Design/methodology/approachThis study uses a self-report survey and collected 449 questionnaires from 65 village government districts in Central Java province, Indonesia. This study uses a simple and partial correlation to measure the relationship between the susceptibility to corrupt behavior and the independent variables. Binary logistic regression was used to investigate which independent variables were best to explain the local government officials’ susceptibility to corrupt behavior.FindingsThe results show that the factors that best explain corrupt behavior’s susceptibility are the officials’ moral conviction to refrain from corrupt behavior, the perceived opportunity of corruption and the perceived benefit of engaging in such behavior. Further, this study finds an appealing crossover interaction between the perceived cost and social norms on corrupt behavior, such that when officials perceive the cost of engaging in corrupt behavior as low, they will rely more on social norms to decide whether to commit corrupt behavior.Practical implicationsThis study provides actionable information for policy formulation. In particular, this study indicates that improvement of internal control can deter corrupt behavior. In addition, the findings of this study also suggest that changing the way we convey the message about corruption might be a promising intervention to mitigate corrupt behavior among government officials. More specifically, a more persuasive-positive-tone message that emphasizes the benefit of not engaging in corrupt behavior or that most people are against corruption can deter corrupt behavior.Originality/valueThe present study provides empirical evidence on the determinants of local government officials’ corrupt behavior from Indonesia’s perspective, which is currently limited.

The Role of Human Development in Improving Local Government Performance Through Good Government Governance

The quality of audit opinion results of local government financial statements in 2015–2020 has increased. Still, non-compliance with laws and corruption cases has increased, indicating that the implementation of Good Government Governance (GGG) has not gone well. This paper provides empirical evidence of the role of human development in realizing GGG and its effect on the performance of local governments in Indonesia. The research was designed as associative quantitative research, an organizational unit of analysis. The total population is the regency and city government in Indonesia, as many as 514 local governments, and the sampling technique is purposive sampling. The qualified samples were 268 local governments, with data observed from 2018 to 2020, or 3 years, so the number was 804. The data was sourced from the Regional Government Implementation Performance Evaluation report. The GGG variables were measured using indices and local government performance variables use scores. The main analysis uses SEM PLS and additional analysis with panel regression. The results showed that GGG had a significant effect on the performance of local governments. Novelty, the dimension of human development can strengthen the GGG variable so that its influence on the performance of local governments is even greater. This research has theoretical, managerial, policy, and practical implications. In addition, the completeness of the research data, which is still lacking in information, is a limitation of this study. Furthermore, recommendations for local governments so that human development receives special attention to increasing competitiveness by increasing the allocation of labor budgets.

Examining Flypaper Effect in Indonesia: Evidence After Transferring Urban-Rural Land and Building Tax to Locals Government

In order to increase the tax power of local governments, the central government implemented a major reform in 2010 by transferring the Urban-Country Land and Buildings Tax (PBB-P2) to local governments. Although the tax contributes a significant portion of local government revenues, the spending behavior of local governments is questionable, and it is unclear whether public spending has been increased. This study examines the effect of strengthening PBB-P2 policy on increasing local revenue (PAD) and its impact on regional spending patterns, specifically whether there are still flypapers after policy reform. Applying a fixed-effects panel data method to Indonesian local governments from 2005 to 2020, we found that strengthening PBB-P2 policy had a significant positive impact on PAD. The positive effect was found to be significant one year (year +1) after policy implementation in each region, including for the province, district, and city, with the issuance of regional ordinances related to PBB-P2. Interestingly, the significant increase in PAD impacted regional spending patterns. Thus, the flypaper effect phenomenon did not exist from 2005 to 2020. This implies that the central government can selectively empower local governments to levy appropriate local taxes and user fees. This can be done by providing new local tax sources, restructuring tax types, simplifying usage fee types, and harmonizing regional government regulations with the central government.

Antecedents of the Accountability in Indonesian Local Government Financial Reporting

Purpose: This study aims to analyze the role of the government’s budget supervision on financial accountability to reduce fraud against the local government budgets. Theoretical framework: The theoretical framework from Gabrini (2013) highlights the importance for organizations to design and manage financial reports and audits to maintain legitimacy, along with the increasing demands for transparency and accountability of public organizations today. Design/methodology/approach: To achieve this goal, the data used in this study is secondary data sourced from the central and regional government’s auditing board between 2016 to 2019. Findings: The results showed that budget supervision negatively affects the accountability of local government financial reports. Moreover, a follow-up audit has a negative effect on the fraud against the local government budget and has a positive effect on financial accountability. The results also demonstrated a negative effect of financial accountability on the fraud against local government budget. Research, Practical & Social implications: As the implication, the government is expected to draft an implementing regulation as a technical guideline to avoid fraud against the government budget. In order to encourage an increase in the target of unqualified opinions, it is expected that the central government can provide incentive funds to regional governments that get unqualified opinions to maximize their capacity to increase financial accountability. Originality/value: This research is among the first in empirically examinating the full mediating effect of financial accountability in the relationship between budget supervision and the fraud against local government budget in Indonesia.

Climate change adaptation through policy integration by local governments in Indonesia

Climate change adaptation through policy integration by local governments in Indonesia

The Effect of Internal Factors on Performance Measurement in Indonesian Local Government

This study is motivated by the many problems found in performance measurement, especially in district/city governments in Indonesia. This study aims to examine the influence of internal factors, namely the participation of internal stakeholders, internal political support, and the organizational capacity of local government on performance measurement. The data for this study was gathered via a Google form, with 43 questionnaires addressed to the secretary and head of Serang City's program, evaluation, and reporting subdivision. Purposive sampling was used in this investigation, which took a quantitative approach. Structural Equation Modeling (SEM) with Smart Partial Least Square version 3.0 was used as an analytical technique. The results of this study indicate that internal stakeholder participation and the organizational capacity of local government have no significant effect on performance measurement. Internal political support has a significant effect on performance measurement. Meanwhile, the results of this study have several implications for local governments, especially district/city governments, namely as an evaluation material related to performance measurement at the district/city government level as well as providing information for the State Civil Apparatus (ASN) involved in Government Agency Performance Accountability Reports (LAKIP) to always improve their skills in measuring performance and paying attention to the outcomes to be achieved.

Determinants of Mandatory Disclosure for Local Government Financial Statements

This study sought to objectively investigate the impact of local government financial disclosure levels on the amount of income in the municipality, general allocation fund, number of local parliaments, and human development index (LKPD). All financial accounts from local governments in Indonesia make up the study's population. 455 district/city administrations across the island of Sumatra were used as the purposive selection sample for this study from 2017 to 2019. In this work, multiple linear regression analysis with STATA version 16 is used for hypothesis testing. The level of disclosure of LKPD is unaffected by the income level of the municipality or general allocation funds, according to the examination of the data. While having an impact on the level of disclosure of local government financial statements (LKPD) are the number of local parliaments and the human development index. This study offers data on variables that will impact the amount of disclosure in financial statements for local governments. A higher level of disclosure will signify that local governments are managing their finances with a high degree of accountability and openness.