Analysis of Regional Financial Conditions in Local Governments of Enrekang Regency, South Sulawesi Province, Indonesia
Keywords:Financial Condition, Financial Management, Local Government
Purpose: The aim of this study was to examine the local financial condition of Enrekang Regency for the 2015-2019 fiscal year as an overview of the ability and success of local governments in managing their own local finances.
Theoretical framework: The Regional financial condition is the ability of a local government to fulfill its obligations to anticipate unexpected events, as well as to execute their financial rights effectively and efficiently (Ritonga, 2014). The measurements carried out in this study are based on the dimensions of condition measurement proposed by Ritonga 2014, namely short-term solvency, budget solvency, long-term solvency, financial flexibility, financial independence, and service level solvency.
Design/methodology/approach: The method used in this research is the descriptive method with a quantitative approach. The data used is secondary data sourced from the Local Government Financial Report Examination Results of Enrekang Regency for the 2015-2019 fiscal year, obtained from the Information and Documentation Management Officer.
Findings: The results of this satudy are the financial management in Enrekang Regency is quite good so as to produce a fairly good financial condition as well. Enrekang Regency has a good financial condition in terms of short-term dimensions, budget solvency, financial flexibility and service level solvency. Meanwhile, the regional financial condition of Enrekang Regency is still not good in terms of regional financial independence due to the low local revenue. The regional government still relies heavily on funding sources from outside or relies on transfer funds from the central government.
Research, Practical & Social implications: The results of this study are useful as a source of information in making decisions for the local government of Enrekang district and related parties, especially in making policies related to governance, especially in effective, efficient and economical financial management.
Originality/value: The value of this research is very useful for the local government as a guide in assessing the condition of government financial health.
Al_kasasbeh, Omar., Alzghoul, Amro., Alhanatleh, Hasan. (2022). The Impact Of Fiscal Policy And Trade Liberalization On Economic Growth: Evidence From Structural Breaks For Jordan, International Journal of Professional Business Review, Vol.7 No.6 https://doi.org/10.26668/businessreview/2022.v7i6.850
Arif, A. & Maksum, I.R. (2017). Functional Decentralization Construct in Decentralization Policy in Indonesia (A Study of Irrigation Education and Free Trade Sectors). Jurnal Kebijakan dan Administrasi Publilk, Vol. 21, No. 1, pp. 59-81.
Casal, R.C., Buch, G.E.J. & Liste, A.V. (2014). Financial Situation and Political Parties in Local Governments: Empirical Evidance in the Spanish Municipalities. Investigaciones Europeas de Direccion Economia de La Empresa, Vol. 20, No. 3, pp. 110-121.
Cohen, S., Doumpos, M., Neofyto, E. & Zopounidis, C. (2012). Assessing Financial Distress Where Banruptcy is Not An Option: An Alternative Approach for Local Municipalities. European Journal of Operational Research, Vol. 218, No. 1, pp. 270-279.
Hasthoro, A., Moi, M.O.V. & Baswir, R. (2016). Fiscal Distress of Local Government: Study on Regencies and Cities in The Provinces of East Nusa Tenggara, Maluku and North Maluku. Dinamika Akuntansi, Vol. 8, No. 2, pp. 151-158.
Hendrick, R. (2004). Assesing and Measuring the Fiscal Health of Local Government: Focus on Chicago Suburban Municipalitties. Urban Affairs Review, Vol. 40, pp. 78-114.
Honadle, B.W. & Lloyd Jones, M. (1998). Analyzing Rural Local Governments Financial Condition: An Exploratory Application of Three Tools. Public Budgeting & Finance, Vol. 18, No. 2, pp. 69-86.
Hussin, N. S. N., Aziz, Z. A. (2021). Socioeconomic development on poverty alleviation of women entrepreneurship, , International Journal of Professional Business Review, Vol. 6 No. 1 (2021), https://doi.org/10.26668/businessreview/2021.v6i1.283
Jones, S. & Walker, R. (2007). Explanators of Local Government Distress. Abacus, Vol. 43, No. 3, pp. 396-418.
Kaldani, D., Carter, A., Kaye, Z.E., Aroskar, J., Ang, K., Ravi, M. & Liu, J. (2016). Developing a Framework for Ranking State and Municipal Governments on Fiscal Sustainability. European Journal of Sustainable Development, Vol. 6, No. 3, pp. 285-296.
Kamnikar, J.A., Kamnikar, E. & Deal, K.H. (2006). Assessing a State’s Financial Condition. Journal of Government Financial Management, Vol. 55, p. 30.
Kloha, P., Weissert, C.S. & Kleine, R. (2005). Developing and Testing A Composite Model to Predict Local Fiscal Distress. Public Administration Review, Vol. 65, No. 3, pp. 313-323.
Maizunati, Nur Afiyah .2017. Analisis Kondisi Keuangan Pemerintah Daerah Kota Magelang Dalam Klaster Kota di Jawa-Bali. Riset Akuntansi Keuangan. Volume2, No. 2
Murmana, Mozes. 2017. Analisis Kondisi Keuangan Pemerintah Daerah Pada Pemerintah Daerah Papua dan Papua Barat Tahun 2011-2015. Skripsi. Universitas Gadjah mada. Yogyakarta.
Nollenberger, K., Groves, S.M. & Valente, M.G. 2003. Evaluating Financial Condition: A Handbook for Local Government, Washington, DC, International City/County Managers Association.
Ramsey, T.K. (2013). Measuring and Evaluating the Financial Condition of Local Government. Thesis. California State University: California, USA.
Ritonga, I.T. 2014. Modelling Local Government Finansial Conditions In Indonesia. Tesis. Melbourne: Victoria University.
Ritonga, I.T., Clark. C. & Wickremasinghe, G. (2012). Assesing Financial Condition of Local Government in Indonesia: an Exploration. Public and Municipal Finance, Vol. 1, No. 2, pp. 37-49.
Rivenbark, W.C., Roenigk, D.J. & Allison, G.S. (2010). Communicating Financial Condition to Elected Officials in Local Government. Popular Government, Fall, pp. 4-13.
Rusmin, R., Astami, E.W. & Scully, G. (2014). Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition. Business and Finance Journal, Vol. 8, No. 82, pp. 88-109.
Sijabat, R. (2016). Fiscal Decentralitation and Sustainable Development: Lesson From Local Government Levels in Indonesia. OIDA International Journal of Sustainable Development, Vol. 9, No.3, pp. 39-76.
Suryani. 2016. Analisis Kondisi Keuangan Daerah Kabupaten/Kota di Aceh Dan di Sumatera Utara. Jurnal Bisnis dan Ekonomi. Vol. 23 No.1.
Wang, X., Dennis, L. & Tu, Y.S.J. 2007. Measuring Financial Condition: A Study of US states. Public Budgeting & Finance, Vol. 27, No. 2, pp.1-21.
How to Cite
Copyright (c) 2023 Nirwana, Rahmawati Haji Seseang, Aida Salsabila
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Authors who publish in this journal agree to the following terms: the author(s) authorize(s) the publication of the text in the journal;
The author(s) ensure(s) that the contribution is original and unpublished and that it is not in the process of evaluation by another journal;
The journal is not responsible for the views, ideas and concepts presented in articles, and these are the sole responsibility of the author(s);
The publishers reserve the right to make textual adjustments and adapt texts to meet with publication standards.
Authors retain copyright and grant the journal the right to first publication, with the work simultaneously licensed under the Creative Commons Atribuição NãoComercial 4.0 (http://creativecommons.org/licenses/by-nc/4.0/), which allows the work to be shared with recognized authorship and initial publication in this journal.
Authors are allowed to assume additional contracts separately, for non-exclusive distribution of the version of the work published in this journal (e.g. publish in institutional repository or as a book chapter), with recognition of authorship and initial publication in this journal.
Authors are allowed and are encouraged to publish and distribute their work online (e.g. in institutional repositories or on a personal web page) at any point before or during the editorial process, as this can generate positive effects, as well as increase the impact and citations of the published work (see the effect of Free Access) at http://opcit.eprints.org/oacitation-biblio.html