This research aims to identify financial condition of local government in Java and Bali year 2013-2014. It is due to government financial condition, according to several researchers, provides an image on the ability of a government in fulfilling their obligations whether in the form of debt or service fulfillment in timely manner. According to assessment upon financial condition, local government is able to identify how to fulfill public needs, how to utilize resources and how to proceed resources so that it can be more productive. As for the measurement method of financial condition itself, the standard method cannot be determined. Therefore, indicator used for measuring local government financial condition is Brown's (1993)[2] indicator development adjusted to Indonesian government. In order to develop the indicator, this research employs qualitative method by comparing GASB No.34, SAP Government Regulation ("Peraturan Pemerintah" -PP) 71 Year 2010, SAP PP 24 year 2005 and literature studies and expert validation. In order to obtain a balanced comparison, this research also employs clusters developed by Baidori (2015)[1] for government in Java and Bali. Results of this research showed that among 7 analyzed clusters, there are variations of results, even though each cluster has similar socioeconomic condition to each other. This variation upon Indonesian local government financial condition is caused by regional autonomy.

The financial condition of the government, according to some researchers provide an overview of the government's ability to meet its obligations in the form of debt or fulfillment services in a timely manner. Through an assessment of the financial condition of the local government can figure out how to meet the needs of the public, how to use the resources, and how to process the resources so that more productive. The Indonesian government itself through DJPK has performed an analysis of financial condition using the method of Brown (1993), although there are some drawbacks. Therefore, this study also develop indicators of financial condition in accordance Brown (1993) that has been modified in accordance with the conditions of government in Indonesia. The means used to develop indicators in this study by comparing the GASB 34 with SAP PP No. 71 of 2010 and SAP PP No. 24 of 2005 and coupled with the study of literature and expert validation. Results from this comparison was obtained on 10 indicators of financial condition in accordance with the conditions or the policy of the Government of Indonesia. The purpose of the analysis was to assess the financial condition of financial condition are balanced in each local government. Therefore, this study uses clustering techniques dikembankan by Baidori (2015).