Local Governments In Indonesia Research Articles

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.

Internal audit function, political characteristics, and compliance with government accrual-based accounting standards in Indonesian local government

Internal audit function, political characteristics, and compliance with government accrual-based accounting standards in Indonesian local government

PENGARUH SISA LEBIH PERHITUNGAN ANGGARAN (SiLPA) DAN FINANCIAL DISTRESS TERHADAP MANIPULASI AKRUAL PADA PEMERINTAH DAERAH DI INDONESIA

This study aims to examine the effect of Calculation of Budget Excess (SiLPA) and Financial Distress on Accrual Manipulation in Indonesian Regional Governments. The object of this research is all district/city governments in Indonesia. The selection of the object of this research is based on the number of cases in local governments in districts and cities that cause problems. Researchers cannot see problems from one district or one city because this research is to see as a whole whether all local governments experience accrual manipulation, so this study takes the object of all local governments in Indonesia. The data used is secondary data from the audited district/city financial statements. The sample in this study amounted to 438 districts/cities for the 2019 fiscal year. Multiple linear regression models were used to test the hypothesis. The results showed that the two independent variables, namely SiLPA and Financial Distress had a positive effect on Accrual Manipulation.

Flexible work arrangement and work-related outcomes during the Covid-19 pandemic: Evidence from local governments in Indonesia

The Covid-19 outbreak has forced various organizations to adjust work designs to comply with health protocols. Flexible work arrangement is a model that is widely used, including flextime and work from home. This study analyzes the impact of flexible work arrangements on affective commitment, job satisfaction, organizational citizenship behavior, and work engagement, which lead to employee happiness. A total of 405 respondents who work in local governments in Indonesia participated in an online survey using the snowball sampling technique. Data were analyzed using partial least squares. This study found a significant effect of flexible work arrangements on affective commitment and organizational citizenship behavior. It means that employees perceive a flexible work arrangement policy as an organizational effort to protect employees from Covid-19. Thus, it makes employees showing their affective commitment and willingness to have organizational citizenship behavior. In addition, job satisfaction, organizational citizenship behavior, and work engagement have been shown to affect employee happiness. This finding has implications for leaders to develop flexible work arrangements as alternative work designs, especially during times of crises such as a pandemic. Further research recommendations are emphasized to examine other flexible work arrangements according to contextual needs.

The impact of financial accountability, public monitoring and local head tenure on local government performance: Empirical investigation in Indonesia

The study aims at examining the effect of financial accountability, public monitoring, and local head tenure on local government performance in Indonesia. Employing secondary data obtained from the governing bodies in Indonesia, the research generates 508 local governments during 2018-2019 with total of 1016 observations analyzed with panel data regression. Overall, the local governments in Indonesia in average has been able to reach high level performance despite there are still several local governments with only medium level. The empirical analysis reveals that local government financial accountability and public monitoring have positive effect on local government performance. However, local head tenure has no significant effect on local government performance. The study provides several recommendations to improve local government performance. Firstly, local governments should put various efforts in realizing proper financial accountability by improving the governance from budgeting, realization, and financial reporting while also having adequate internal control and procedures. Secondly, the public should have considerable attention on local government activities in performing its functions and responsibilities in which public participation and democratic environment should be maintained.

Factors affecting the disclosure level of local government financial statements: Role of audit opinion

This study empirically examines the factors that influence the level of disclosure of local government financial statements, with audit opinion as a moderating variable. The ratio of financial independence, capital expenditure, intergovernmental revenue, and legislative size are independent variables in this study. The dependent variable is the degree of disclosure of local government financial statements (LKPD). The population used in this study is the financial statements of local governments in Indonesia that have been audited by BPK RI. The sample on this study consisted of 338 district/city governments on Java Island in 2018–2020 with purposive sampling. The test carried out is Multiple Linear Regression analysis using STATA version 16. Based on the results that have been analyzed, it can be concluded that the ratio of financial independence and intergovernmental revenue has a significant effect on the level of LKPD disclosure. Meanwhile, capital expenditure and legislative size have no significant effect on the level of LKPD disclosure. Audit opinion moderated the ratio of financial independence and legislative size on the level of disclosure of LKPD. Meanwhile, audit opinion does not moderate capital expenditure and intergovernmental revenue on the level of LKPD disclosure. This study provides information on the factors that influence the level of disclosure of LKPD in local governments, both districts/cities. A high level of LKPD disclosure indicates an accountability and transparency carried out by local governments.

Quality of Public Services in Local Governments in Indonesia : A Study of Capital Expenditures and Government Internal Control Systems

Regional autonomy is a policy the central government gives to local governments to regulate their regions. One of these authority policies is public service. Public services are a series of activities in the form of services following the law's mandate in the form of goods and services to fulfill general needs for the welfare of society. Public services for the community come from the realization of local government budgets with an internal control mechanism to regulate the fulfillment of public services. Increased budget realization can support regional infrastructure to provide better public services. Capital expenditure is not a service; if it is used as a service, it is necessary to have a supervisory mechanism such as an internal supervisor of the local government to support the fulfillment of better public services and improve the welfare of the community. The increase in capital expenditure, where the output is assets, is the most tangible thing that is felt by the community; it is necessary to have internal control within the local government, namely the maturity of the SPIP to run effectively and efficiently. This study examines the effect of capital expenditure and SPIP maturity on public services. The sample and population used in this study were 514 local governments with up to 1887 all local governments in Indonesia during 2016 – 2019. The results of this study are that capital expenditure variables have a positive effect on public services, and SPIP maturity has a positive effect on public services.

Quality of Public Services in Local Governments in Indonesia : A Study of Capital Expenditures and Government Internal Control Systems

Quality of Public Services in Local Governments in Indonesia : A Study of Capital Expenditures and Government Internal Control Systems

The Effect of Planning, Management Commitment, and Human Resources Competency on The Absorption of The Goods and Services Budget in The Local Government of Cilacap Region, Central Java

This study aimed to examine the influence of planning, management commitment, and human resources competency on goods and services budget absorption of Cilacap Local Government, Central Java. This study uses primary data by distributing questionnaires to the head of working units in the Cilacap regency with a number of respondents as many as 51 people during June-July 2020. Data analysis was performed by using SPSS (Statistical Package for Social Science) version 24. The results showed that the planning with a significant value of 0,035, management commitment with a significant value of 0,012, and human resource competencies with a significant value of 0,021 positively influence the absorption of good and service expenses of government Cilacap. With these findings, this study contributes to providing empirical data on factors influencing budget absorption on Local governments in Indonesia;

Do Regional Heads Utilize Capital Expenditures, Grants, and Social Assistance in the Context of Elections?

This study empirically analyzes the alleged existence of political budget cycles in Indonesian local governments. Using panel data, this quantitative study concentrates on capital expenditures, grant expenditures, and social assistance expenditures in the election year and the year before the election. The purposive sampling method is used to take the sample—a local government that experienced two election cycles from 2012 to 2018. The sample consists of 1306 observational data points on capital expenditures and grants, and 636 observational data points on social assistance. The study tests its hypothesis using multiple regression analysis. The results indicate that the election year negatively affects capital expenditures, positively affects grants, and has no effect on social assistance. The year before the election negatively affects capital expenditures, but positively affects grants and social assistance. The incumbent positively affects social assistance but does not affect capital expenditures and grants. Transfers have a negative effect on capital expenditures, a positive effect on grants, and no effect on social assistance. The interactions of the election year and year before the election with the incumbent is not proven in this study.

ANALISIS KESEHATAN FISKAL DAERAH: STUDI PADA APBD KABUPATEN MOJOKERTO 2018

Fiscal health is an abstract fiscal condition which cannot be directly observed and measured accurately. Local governments in Indonesia have the authority as a result of regional autonomy to regulate and manage budgets. However, not all regions are able to utilize this authority properly. The purpose of this article is to see how healthy budgeting practices are in one of the regions in Indonesia, in this case, Mojokerto Regency. The method used is qualitative with content analysis in the 2018 Mojokero Regency Revenue and Expenditure Budget. The results of this study are that the Mojokerto Regency government faces problems related to budget deficit estimation. Other problems also include regional dependence on the central government. The limitation of this research is that the analysis is carried out with the 2018 budget documents, so further analysis is needed with the latest documents.

Measuring Good Public Governance in the Local Governments of Indonesia: A Multidimensional Index

This study aimed to fill the gap by measuring and examining the level of GPG for local governments in Indonesia. The study used a multidimensional index by incorporating information from the Indonesia Governance Index (IGI) principles indicators, the Evaluation of local government performance reports, the annual reports of local governments financial statement and the Central Bureau of Statistics from 2015 to 2017. The Two-staged Factor Analysis was employed for weights assignment. The results are presented based on comprehensive scores and ranks for five district and city levels of the local governments which had have the highest and lowest values for each GPG principle and overall GPG index. The findings showed that there was evidence of an increasing trend on the implementation of GPG principles in the local governments. There were also evidence on the lack of information regarding which indicators needed to be improved, due to lack of awareness among the local governments on importance of quality application of the GPG principles in the government system. It implies that the central government focused on performance evaluations, rather than implementation of GPG in local governments. The findings suggest that it is useful for the local governments to measure the level of good public governance using the multidimensional GPG index rather than using a single dimension. Keywords: good public governance, multidimensional index, local government of Indonesia

Evaluation of Smart Mobility Indicators in Responding COVID-19 Pandemic in Indonesia

The COVID-19 outbreak cuts the number of trips and people’s movement during the day. Not only because of the community’s awareness for the disease transmission but also because of the enforcement from the government to apply the mobility policy. This changing trip behavior is predicted to happen throughout the time of pandemic and post-pandemic. On the contrary, when mobility is decreasing, the role of ICT in community activities is increasing. This condition leads to an interesting question for the smart city, especially the smart mobility concept, whether the smart mobility concept has been properly addressed and responded to the pandemic and post-pandemic era or not. This paper aims to explore how far smart mobility planning has been applied by local governments in Indonesia, especially in response to community activity during the pandemic era. Our approach in this paper is a qualitative study in evaluating online local government planning documents as our main data. We choose the study cases in three cities that got high tier ranks in the smart city awards in 2019 (based on Rating Kota Cerdas Indonesia/Indonesia’s Smart Cities Rating), which are Semarang, Samarinda, Magelang. We review literature on smart mobility indicators and those smart mobility indicators used in planning documents. Then, we evaluate the relevance of those indicators to the condition of pandemic and post pandemic era. We found that smart mobility indicators have not been received much concern as the main aspect of smart city in Indonesia.

Non-compliance to SAP on local governments in Indonesia: The impact of internal control weaknesses in internal control in accounting and financial reporting and regional complexity

This study attempts to analyze the impact of internal control weaknesses in accounting and financial reporting as well as local government complexity on the non-compliance with Government Accounting Standard (SAP) implementation in Indonesian local governments. Using secondary data from the audit results from the Supreme Audit Board (BPK) on Local Government Financial Reports (LKPD), this study finds that there are still non-compliance with SAP in a number of local governments in Indonesia since the application of accrual-based accounting was required in 2015. On the bright side, the number of non-compliance continues to decrease from year to year. Further, this study reveals that the weakness of internal control in accounting and financial reporting as well as regional complexity has a positive effect on non-compliance with SAP implementation. This research encourages local governments to evaluate and make improvements to the existing internal control weaknesses and accommodate the high complexity level through the development of adequate accounting competencies as well as effective and efficient accounting and financial reporting systems. Thus, local governments can produce LKPD that are compliant with SAP with more reliable and relevant financial information.

Philosophical understanding of the dynamics and control of occupational fraud in the public sector: contingency analysis

PurposeThis study aims to examine the roles of organisational control, structure, culture and technology in preventing occupational fraud. This study is essential in the current time. It brings a significant impact on both theory and practice. In the existing studies, there is a lack of clarity on a specific mechanism to prevent organisational fraud. The problem is that they tend to generalise the types of organisational fraud. Conceptually, organisational fraud may include corruption, double funding, asset misappropriation, bribery or falsification of documents. However, many scholars tend to neglect such diversities. Consequently, many occupational fraud cases become unstoppable, particularly corruption. To deal with this topical issue, the current study applies the term “occupational fraud” cited by the Association of Certified Fraud Examiners, consisting of corruption, asset misappropriation and fraudulent financial statement.Design/methodology/approachThis study surveyed three Indonesian Local Governments. This study focussed on management levels that have strong power for coordinating governmental activities. The author chose these local governments because their local leaders (the regents) were jailed due to corruption scandals. As expected, this study gives us different perceptions of how fraud mitigation should be designed in the organisation.FindingsThe results suggest that corruption is a little bit complex than other types of occupational fraud. It is improbable to be prevented through technological and administrative approaches. As such, organisations need to think of extra efforts that could perfectly tailor the organisational control and organisational culture, organisational structure and technological advancement. The benefit of this effort is related to diagnosing the fit or misfit of organisation designs in addressing the dynamic dimensions of corporate governance. Then, it can also strengthen the efficacy of preventive measures to deal with occupational fraud.Originality/valueThis study provides a provocative discussion regarding the public perception of occupational fraud, consisting of corruption, asset misappropriation and financial statement fraud. And this study also offers a new refined conceptual analysis of how to deal with such types of occupational fraud by incorporating contingency theory and the Committee of Sponsoring Organizations of the Treadway Commission (COSO’s) internal control components.

Karakteristik Legislatif dan Ketepatwaktuan Anggaran: Studi Empiris pada Pemerintah Daerah di Indonesia

This study aims to examine the effect of local legislative characteristics on the timeliness of local government budgets in Indonesia. Using secondary data from the authorized institutions, this study generates 2032 observations covering all local governments in Indonesia during 2015-2018 that were analyzed using multiple linear regression. The research findings show that most local governments in Indonesia have been able to validate the Local Revenue and Expenditure Budget (APBD) on time, although there are still several local governments that are late by exceeding the deadline of the APBD validation date. Furthermore, the analysis results reveal that legislative political competition has a negative effect on local government budgeting timeliness while legislative size has a positive effect. However, this study finds no significant effect of legislative gender representation considering the relatively low political representation of women in the Regional People's Representative Council (DPRD). From the analysis results obtained, this study emphasizes that the DPRD as the people’s representation must always maintain the quality of supervision in the preparation of the budget even though there is political competition and differences in interests. The people should also increase the representation of women in the DPRD to support equality and support the implementation of DPRD functions. In addition, local governments must also have an adequate number of DPRD members as needed. Thus, local governments can fulfill the timeliness of the APBD validation as a form of local government financial accountability.
 Keywords: local government; budgeting timeliness; political competition; gender representation; legislative size

KOMPLEKSITAS DAERAH, PENGAWASAN INTERNAL DAN DAMPAKNYA TERHADAP KETEPATWAKTUAN PELAPORAN KEUANGAN PADA PEMERINTAH DAERAH DI INDONESIA

This study aims to examine the effect of the complexity of local government and local government internal control on the timeliness of local government financial reporting in Indonesia. This study produces panel data with a total of 1524 observations from 508 local governments in Indonesia. Data analysis was performed by panel data regression. This study found that there were still local governments in Indonesia during the 2016-2018 period that had not been able to submit their financial reports on time with an average delay of 2 days from the specified reporting deadline. Furthermore, the empirical findings of this study reveal that the complexity of local government does not affect the timeliness of local government financial reporting, while internal control shows a positive influence. This study also recommends local governments to continuously improve the quality of internal control to be more effective and efficient in order to oversee the local government financial reporting process so that it can be completed on time.