Impact Implementation of Fiscal Decentralization and
Regional Government Performance on the
Accountability of Financial Reporting in Kupang
Regency
Nonce.F. Tuati, D. W.Manuain, S.Samadara
{nonc3tuati@yahoo.com, dece0169@gmail.com, selfisamadara@gmail.com}
Politeknik Negeri Kupang, Indonesia
Abstract. This study aims to empirically prove the influence of Fiscal Decentralization,
and the Performance of Local Government Organizations on the Financial Reporting
Accountability of the Kupang Regency Regional Government. The sample used in this
study was Judgment Sampling with a population of civil servants in the Revenue,
Financial Management and Asset Management District of Kupang Regency. The method
of data analysis uses multiple linear regression analysis using Statistical Package for the
Social Sciences (SPSS). The results showed that Fiscal Decentralization had no effect on
the Accountability of Regional Government Financial Reporting and the Performance of
Local Government Administration positively influenced the Accountability of Regional
Government Financial Reporting. Simultaneous testing (together) proves that Fiscal
Decentralization and the Performance of Local Government Organizations affect the
Financial Accountability of the Regional Government of Kupang Regency.
Keywords: fiscal, decentralization, financial, reporting, accountability
1 Introduction
Decentralization is defined as a process of political, fiscal devolution and decision making
from the central government to regional governments [1]. The transfer of power to local
governments aims to improve the stability of the democratic system, increase effectiveness
and efficiency, stimulate the formation of a local and national economic development base,
increase government transparency and increase community involvement in decision making
(Moisiu, 2013). Fiscal decentralization is defined as the transfer of expenditure and income
functions from the central government to regional governments [2]. Liu, 2007 and Syahrudin
(2006) have proven that fiscal decentralization produces economic benefits for the country
such as increased growth rates, increased effectiveness and efficiency in resource management
and increased community participation in decision making [3].
The implementation of fiscal decentralization raises various problems because regions
have different capacities and capabilities in terms of finance, infrastructure availability and
human resource capacity (Syahrudin, 2006). With fiscal decentralization there was a
significant flow of funds from the central government to regional governments. Local
governments are required to increase accountability in the management and financial reporting
of their governments. Ideally fiscal decentralization can improve efficiency, effectiveness,
transparency and accountability in the management of government finances (Moisiu, 2013).
ICESC 2019, October 18-19, Indonesia
Copyright © 2019 EAI
DOI 10.4108/eai.18-10-2019.2289975