Incumbent Performance Analysis: Comparison of Regional Government Financial Management Before vs. After Regional Head Elections

Putri Lindra Kartiningsih (), Andi Chairil Furqan, Betty and Megawati
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Putri Lindra Kartiningsih: Tadulako University
Andi Chairil Furqan: Tadulako University
Betty: Tadulako University
Megawati: Tadulako University

A chapter in Proceedings of the 8th International Conference on Accounting, Management, and Economics (ICAME 2023), 2024, pp 466-483 from Springer

Abstract: Abstract This research aims to analyze differences in financial management performance of Regional Governments led by re-elected regional heads between before and after Regional Head Election (PILKADA). Financial management performance is measured based on LHPS Financial Audit Agency (BPK), namely Audit Findings, Audit Opinions and Follow-up Audit Recommendations, as well as measuring regional government financial sustainability, namely Regional Financial Independence, Financial Flexibility, Short-Term Solvency and Service Solvency. conducted in Indonesian areas in 2015, 2017, 2018, and 2020 where regional heads were re-elected in a second term in simultaneous regional elections; the final sample was 391. It indicated that Audit opinions and follow-up to audit recommendations in regions led by incumbents were better after PILKADA than before PILKADA. Meanwhile, Audit findings show no change after PILKADA. Regional financial independence and service solvency improved, but short-term solvency and financial flexibility worsened. This finding shows that although the incumbent shows a high commitment to completing follow-up audit recommendations after PILKADA, there are no efforts to make the implementation of the Government Internal Control System (SPIP) more effective, especially to mitigate and reduce audit findings after PILKADA. This condition can also be seen from the decline in financial flexibility after PILKADA, which shows a lack of mitigation in providing financial resources, especially in increasing income or debt capacity. The Results of this research provides new insights regarding regional government financial management under the leadership of elected regional heads over two periods.

Keywords: Incumbency; Regional Election; Financial Performance; Sustainable Finance (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-400-6_35

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