Determinants of Local Government Accountability

Abstract

This research aims to examine the factors that determine local government accountability as a dependent variable measured by the audit opinion of the financial statements. Specifically, the focus of this research was based on a local government located in Central Java, Indonesia, where the determinants include several variables, such as management control systems, economic growth, local government size, complexity, fiscal decentralization, human development index, and the population. Meanwhile, 138 financial statements were used in this research, which were provided by the local governments in Central Java province during the 2015-2018 observation. Regression is used to test the effect of determinant variables on local government accountability and the result of the statistical test shows that local government size, economic growth, and fiscal decentralization have a significant effect on local government accountability. While the total assets and economic growth have a positive effect on accountability, fiscal decentralization has a negative effect. Management control systems, human development index, and complexity, on the other hand, have no significant effect on accountability. Therefore, this research concludes that it is important to consider these determinant variables for local government accountability.

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

“…Accountability relates to the central government delegating its affairs to local governments (Setiawan, Winarna, & Nugroho, 2022); therefore, local governments have both authority and obligation. Yilmaz and Venugopal (2013) reveal the importance of accountability in the Philippines, while several studies emphasize the importance of accountability for local government performance in Indonesia.…”