Characteristics Local Government and Government Performance : An Empirical Examination of the Local Government in Indonesia (original) (raw)

Financial Performance of Local Governments in Indonesia

European Journal of Business and Management Research, 2019

This study aims to identify the effects of local revenue, audit opinion, legislative size, and intergovernmental revenue towards the financial performance of Local Governments in Indonesia. This study uses all districts/cities within the island of Java as a sample. The sample identification uses the purposive sampling method. Secondary data used in this study originates from the report of examination of the local government financial report and the summary of examination published per semester by the national audit board of the Republic of Indonesia. A total of 108 samples were retrieved, resulting in a total of 120 samples. The hypothesis testing was done using the multiple linear regression analysis method. The results of this research show that local revenue, national audit board opinion, and legislative size has a significant relationship on the financial performance of local governments in Indonesia. However, Intergovernmental Revenue does not have a relationship on the financial performance of Local Governments in Indonesia.

Governance Government On Local Government In Indonesia

2016

The purpose of this study is to examine the effects of size of local government, expenditure of grant, and level of local dependence on central government on quality of local government financial reporting. This study also to examine impact quality of local government financial reporting on local revenue. Population in this study is all local government in Indonesia which includes a number of 497 district and cities. This research uses a purposive sampling design, the exact type of quota sampling. This type of sampling design can ensure that certain groups are fairly represented in the study through a quota. which is set for each sub group based on the number of each group in the population. The number of samples are 106 local governments. The collected data was processed by using path analysis. The results indicate that size of local government and expenditure of grant influenced on qualiy of local government financial reporting, while level of local dependence on central governmen...

Determinants of Local Government Performance in Indonesia

Proceedings of the 6th International Accounting Conference (IAC 2017), 2018

The purpose of this study is to analyze the determinants of the performance of local governments in Indonesia. We hypothesize that organizational commitment, management incentives, monitoring, legitimacy, and institutional incentives have positive effects on local government performance. Organizational commitment is measured by follow-up of all audit recommendations and the number of audit findings, while intergovernmental revenue and proportion of non-routine expenditure is used to measure management incentives. Monitoring is measured by political competition and legislature size. Number of voters is used to measure size, while size and wealth of local government is used as the proxy for institutional incentives. Unit analysis of this study is local governments in Indonesia from 2009-2012. The results show that follow-up of audit recommendations, level of dependency, proportion of non-routine expenditure, number of legislature members, number of voters and local government wealth have positive effects on the performance of local governments. Based on these results, local governments should increase their commitment to follow-up of all audit recommendations and increase their proportion of nonroutine expenditure and own-source revenue in order to improve performance. The legislative board can contribute to improved performance by performing effective monitoring.

Factors Affecting Financial Condition of Local Government in Indonesia

Journal of Accounting and Investment, 2019

Fiscal decentralization causes variation in local governments (LGs) financial conditions. Such variation creates need for their stakeholders to know what factors affecting the variation. Therefore, the objective of this study is to determine factors affecting LGs financial conditions. The theory used to achieve the objective is supply and demand theory. This study utilises quantitative research method. There are seven factors examined as independent variables: population, population density, age profile of the community, wealth of the community, revenue-base of a LG, financial efficiency, and cost of services and goods provided by LG. Based on the multiple regression model, the results show that four factors (financial efficiency, cost of services and goods, population, and revenuebase) significantly influence the financial condition of LG, whereas other three factors (population density, age profile of community, and wealth of community) are not. Findings of this study will contribute benefits to the stakeholders of LG. Based on findings, the central government, LG executives and legislators could utilise the evidence to make effective policy pertaining to the financial conditions of LG. As a result, the quality of decision-making regarding LG financial management would be improved in the future. For Indonesian scholars, this study will represent the first attempt to assess the financial condition of LG in Indonesia.

Measurement of Regional Government Financial Performance in Indonesia

Jurnal Bisnis dan Akuntansi

This study aims to determine the financial performance of all local governments in Indonesia. This study uses financial data from all the districts/cities and provinces in Indonesia from 2013 to 2015. The data collection techniques used in this study is documentation. This research used descriptive and quantitative analysis methods. The results of the study show that the government's financial performance in Indonesia has been effective but inefficient. This is evident from the ratio of the financial effectiveness ratio of local governments in Indonesia in 2013-2015 in the range of 102-121%, but the ratio of financial efficiency of local governments in Indonesia in 2013 to 2015 was in the range of 99% -104%. Financial performance that is not optimal from this local government is because during 2013-2015 the contribution of taxes and regional retribution on Regional Original Income was low so that in the end it caused the level of income received by the regional government to be ...

Local government’s revenue, audit opinion of BPK and financial performance of local government: Indonesia evidence

2013

Decentralization or local autonomy is directed to stimulate the equalization distribution of development, improve the people’s welfare, encourage initiative and active participation of the society in a real. This study focuses on the impact of local goverment revenues (PAD) and audit opinion of BPK in financial performance. The Local government revenue’s (PAD) components consist of local taxes, local retribution, separated local asset and the others legal local revenue. While BPK’s audit opinion is dummy variable. The sample used in this study are 31 local government were categorized high level fiscal capacity during the period 2011-2012. Samples obtained from the local government financial statements (LKPD) BPK RI.Research result indicates that audit opinion of BPK is statistically significant to the financial performance of the local governments. While the local taxes show the negatives effect on financial performance, which is contrary to existing theories. This result shows tha...

Assessing Regional Finance Independence in Indonesian Local Governments

European Journal of Business and Management Research

This study aims to identify the effects of local tax, tax revenue sharing, special allocation fund, and capital expenditure on the regional finance independence in Indonesia’s local governments. This study uses all districts/cities within the Central Java as a sample. The sample identification uses the purposive sampling method. Secondary data used in this study originates from the report of examination of the local government financial report and the summary of examination published per semester by the national audit board of the Republic of Indonesia. A total of 161 samples were retrieved, resulting in a total of 175 samples. The hypothesis testing was done using the multiple linear regression analysis method. The results of this research show that local tax, tax revenue sharing revenue, has a significant relationship on the regional finance independence in Indonesia’s local governments. While, allocational fund and capital expenditure does not have a relationship on the regional...

Financial characteristics, human development index, and performance: a study of local governments in Indonesia

Jurnal Akuntansi & Auditing Indonesia, 2018

This study aims to examine whether the financial characteristics and human development index (HDI) are associated with the performance of local governments administration in Indonesia. The sample consists of 385 local governments classifying expenditures into operating and capital expenditures (Sample 1) and 53 local governments classified expenditures into direct and indirect expenditures (Sample 2). Regression result for Sample 1 indicate that special allocation funds (dana alokasi khusus, DAK) have a positive relationship with performance while general allocation funds (dana alokasi umum, DAU) and land expenditure are negatively related to performance. For Sample 2, revenue risk and DAU are negatively related to performance, whereas revenue sharing funds (dana bagi hasil, DBH) have a positive relationship with performance. Audit opinion and human development index are positively related to performance either for Sample 1 or Sample 2. These findings suggest that financial characteristics and human development index can be used as a consideration in determining financial policy and evaluation of local governments.

Structure of local government budgets and local fiscal autonomy: Evidence from Indonesia

Public and Municipal Finance

This study aimed to investigate the critical aspects of Indonesia’s local government budget structure. The impact of the budget on local fiscal autonomy was also examined by separating the sample of provinces in Java Island and Bali versus Non-Java Island and Bali. The unbalanced panel data was collected on 34 Indonesian provinces from 2013 to 2020. The results showed that locally-generated revenue and general allocation funds positively affect the regional fiscal autonomy index. These results indicate that local revenue and general allocation funds have improved regional fiscal autonomy. When the provincial sample is separated, general allocation funds positively and significantly affect the regional fiscal autonomy index in the provinces of Java Island and Bali. Furthermore, locally-generated revenue, as well as general allocation and profit-sharing funds, play a significant role in increasing the regional fiscal autonomy index in provinces outside Java and Bali, such as Sumatra, ...