Understanding the forces and critical features of a new reporting and budgeting system adoption by Indonesian local government

2020 ◽  
Vol 16 (1) ◽  
pp. 145-167
Author(s):  
Harun Harun ◽  
David Carter ◽  
Abu Taher Mollik ◽  
Yi An
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Dominant Role ◽  
New Technology ◽  
National Level ◽  
Accounting System ◽  
Local Authorities ◽  
Content Type ◽  
Policymaking And Implementation

Purpose This paper aims to critically explore the forces and critical features relating to the adoption of a new reporting and budgeting system (RBS) in Indonesian local governments. Design/methodology/approach The study is based on an intensive analysis of document sources and interview scripts around the institutionalization of RBS by the Indonesian government and uses the adaption of Dillard et al. (2004) institutional model in informing its findings. Findings The authors find that at the national level, the key drivers in RBS adoption were a combination of exogenous economic and coercive pressures and the wish to mimic accounting reforms in developed nations. At the local government level, the internalization of RBS is a response to a legal obligation imposed by the central government. Despite the RBS adoption has strengthened the transparency of local authorities reports – it limits the roles of other members of citizens in determining how local government budgets are allocated. Research limitations/implications The results of the study should be understood in the historical and institutional contexts of organizations observed. Practical implications The authors reinforce the notion that accounting as a business language dominates narratives and conversations surrounding the nature of government reporting and budgeting systems and how resource allocation is formulated and practiced. This should remind policymakers in other developing nations that any implementation of a new accounting technology should consider institutional capacities of public sector organizations and how the new technology benefits the public. Social implications The authors argue that the dominant role of international financial authorities in the policymaking and implementation of RBS challenges the aim of autonomy policies, which grant greater roles for local authorities and citizens in determining the nature of the budgets and operation of local authorities. Originality/value This study extends institutional theory by adapting the Dillard et al. (2004) model in explaining the forces, actors and critical features of a new accounting system adoption by local governments.

scholarly journals Commercial property tax in the UK: business rates and rating appeals

2016 ◽  
Vol 34 (6) ◽  
pp. 602-619 ◽  
Author(s):  
Paul Michael Greenhalgh ◽  
Kevin Muldoon-Smith ◽  
Sophie Angus
Keyword(s):  
Local Government ◽  
Service Sector ◽  
Central Government ◽  
Detailed Examination ◽  
Multiple Perspectives ◽  
Local Authorities ◽  
Content Type ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of the introduction of the business rates retention scheme (BRRS) in England which transferred financial liability for backdated appeals to LAs. Under the original scheme, business rates revenue, mandatory relief and liability for successful appeals is spilt 50/50 between central government and local government which both share the rewards of growth and bear the risk of losses. Design/methodology/approach The research adopts a microanalysis approach into researching local government finance, conducting a case study of Leeds, to investigate the impact of appeals liability and reveal disparities in impact, through detailed examination of multiple perspectives in one of the largest cities in the UK. Findings The case study reveals that Leeds, despite having a buoyant commercial economy driven by retail and service sector growth, has been detrimentally impacted by BRRS as backdated appeals have outweighed uplift in business rates income. Fundamentally BRRS is not a “one size fits all” model – it results in winners and losers – which will be exacerbated if local authorities get to keep 100 per cent of their business rates from 2020. Research limitations/implications LAs’ income is more volatile as a consequence of both the rates retention and appeals liability aspects of BRRS and will become more so with the move to 100 per cent retention and liability. Practical implications Such volatility impairs the ability of local authorities to invest in growth at the same time as providing front line services over the medium term – precisely the opposite of what BRRS was intended to do. It also incentivises the construction of new floorspace, which generates risks overbuilding and exacerbating over-supply. Originality/value The research reveals the significant impact of appeals liability on LAs’ business rates revenues which will be compounded with the move to a fiscally neutral business rates system and 100 per cent business rates retention by 2020.

Local government modernization in Albania

2018 ◽  
Vol 31 (4) ◽  
pp. 466-506 ◽  
Author(s):  
Elona Guga
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Historical Development ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Single Case ◽  
Administrative Reform ◽  
Current Debate ◽  
Content Type ◽  
The Impact

Purpose An attempt will be made to shed light on the course and pattern of the decentralization process by analyzing the historical development of local government and the territorial-administrative reform of 2015-2020 in Albania and the factors that have been shaping it. The scope is to understand the impact of the reform elements on the subnational governments and in general their overall impact on the government. The purpose of this paper is to fill the gap in the existing literature for Albania and at offering some insights on the administrative-territorial reform. Furthermore, it will contribute to the current debate on fiscal decentralization in South Eastern European (SEE) countries and the public management model implemented after the last reforms. Design/methodology/approach The first section analyzes the historical development of local government reforms from the 1990s to today and will help to identify if there is instrumentalism advocacy. The second section explains the determinants of the local government’s fiscal autonomy in Albania of the period from 2003 to 2016. Three indicators are used as proxies for fiscal decentralization: the proportion of subnational expenditure over national expenditure, of total subnational revenues over total revenues of central government and the indicator of own subnational revenues over total revenues of the central government. The data from the budget and the revised budgets are then compared. Findings Despite Albania’s commitment to decentralize its government functions, there is still work to do. The territorial and administrative reform has not generated the expected results. Almost 90 percent of the revenues still come from the central government’s unconditional transfers. Therefore, the Albanian Government should build capacities and skills, and train the employees of each level of government that currently benefit from international assistance. Research limitations/implications The analysis represents a single case study on the territorial-administrative reform in Albania. Its implementation started in 2015 and it is probably too early to discuss outcomes. However, it might be useful to analyze the first results after a two-and-a-half-year period of implementation of reforms. Despite contributing to the existing gap in the literature, additional research will be necessary to better understand the decentralization process not only in Albania, but in all SEE countries. Practical implications It is necessary to first understand the lack of initial output, as well as the various challenges faced, in order to take the corrective measures on time. Originality/value This paper discusses in detail the reform adopted and the progress made by the Albanian local government units. The reform attempts to develop better relationships between the central and local governments and hence improve their service delivery, transparency and accountability. This paper is the first one that is attempting to analyze the initial output of the territorial-administrative reform of 2015-2020.

scholarly journals Analyzing Relationship Between Internal Auditor Capability and Financial Management Quality: A Study at Indonesia Local Governments

2020 ◽  
Vol 10 (2) ◽  
pp. 302
Author(s):  
Nur Fajri ◽  
Irwan Taufiq Ritonga
Keyword(s):  
Local Government ◽  
Financial Management ◽  
Local Governments ◽  
Central Government ◽  
Dominant Role ◽  
Group Discussion ◽  
Assessment Process ◽  
Internal Auditor ◽  
Factors Affecting ◽  
The Relationship

The purpose of this study is to analyze whether there is relationship between level of local government internal auditor (LGIA) capability and local government financial management (LGFM) quality. Furthermore, this study also identifies factors affecting the presence or the absence of a significant relationship between LGIA capability and LGFM quality. This research uses in-depth interviews and focus group discussion to identify factors affecting the presence or the absence of relationship between LGIA capability and LGFM quality. The results show that there is no relationship between LGIA capability and LGFM quality. The absence of the relationship is caused by dominant role of Local Government Working Units (LGWU) in the process of financial management; improvement of LGIA capability is not followed by improvement on the roles and services provided by LGIA; and potential weakness in assessment process of LGIA capability by The Finance and Development Supervisory Agency. Findings of this study will assist both central and local governments to evaluate “what went wrong” with their Improvement of LGIA Capability Programs and assist central government to formulate a better policy on relationship and coordination among head of local government, LGWU, and LGIA.This research develops a new method to measure LGFM quality comprehensively. This study also fills gap in the literature exploring the relationship between LGIA capability and LGFM quality, which is still rare at present.

Do external benchmarking mechanisms facilitate performance management in Malaysian local authorities?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
A.K. Siti-Nabiha ◽  
Roshni Ann George
Keyword(s):  
Local Government ◽  
Performance Management ◽  
Central Government ◽  
Local Authorities ◽  
Content Type ◽  
Strategic Performance ◽  
Strategic Processes ◽  
Institutional Learning ◽  
External Actors ◽  
The Impact

PurposeThis paper investigates the extent to which externally led benchmarking may have facilitated performance management design and use in Malaysian local authorities.Design/methodology/approachA longitudinal qualitative study of local authorities in Malaysia was undertaken, comprising interviews with key officers during the introduction of process-based key performance indicators (KPIs), and following the imposition of benchmarking (i.e. relative performance evaluation) on local authorities. Complexity theory was used in the analysing and theorising of data.FindingsExternal benchmarking mechanisms facilitated only operational performance management, with strategic performance management merely ceremonially adopted. As the focus was on mainly operational KPIs, strategic goals were not translated into detailed action plans and outputs at departmental level. In addition, operational and strategic performance management packages were decoupled. Thus, the efforts of external actors resulted in operational controls suppressing rather than facilitating strategic processes.Research limitations/implicationsThere is a need to transition from purely externally led benchmarking to internally driven benchmarking in local government, whereby benchmarking forms part of the interactive performance management mechanisms that lead to institutional learning and improvement.Practical implicationsBenchmarking activities should be based on comprehensive analyses of performance management design and use. A reflective approach to continuously identify gaps or weaknesses in performance management systems will enable local government administrators to improve systems and processes in a timely manner to meet stakeholder needs.Originality/valueThis paper explains the impact of central government policy and benchmarking initiatives on other levels of government. We have built on previous literature by examining the connection between external benchmarking and internal performance management design and use in local government. In relation to this, and following calls for research on holistic performance management, the integration between operational and strategic performance management packages was also examined.

Inter-governmental relations and procurement non-compliance in African local government systems

2019 ◽  
Vol 19 (4) ◽  
pp. 277-294
Author(s):  
Parestico Pastory
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Government Procurement ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Documentary Analysis ◽  
Sub Saharan ◽  
The Third World ◽  
Depth Interviews

Purpose The purpose of this study is to examine the implications of inter-governmental relations on procurement compliance in local government. Design/methodology/approach A total of 68 in-depth interviews with local government officials and councillors in four different local government authorities, members of parliament in the local authorities accounts committee and a committee clerk were carried out in addition to documentary review. Findings Evidences from in-depth interviews and documentary analysis point to central government as one of key reasons for procurement non-compliance. The nature of inter-governmental relations enables the central government to issue encroaching directives on local government procurement plans or take handicapping actions on the financial ability of the local governments to execute procurement plans. Practical implications The study adds inter-governmental relations on strategies for improving procurement compliance in African local government systems. Originality/value Despite increasing research on procurement compliance, the complexity of regulatory non-compliance in local government procurement has not been adequately analysed. The current study uses an inter-governmental relations perspective to contribute knowledge on procurement compliance in local government systems of the Third World, sub-Saharan Africa in particular.

scholarly journals The Institutionalization of Accrual Accounting: The Perspective of New Institutional Sociology Theory

2017 ◽  
Vol 9 (2) ◽  
pp. 100-109
Author(s):  
Rizky Ayu Savitri ◽  
Zaenal Fanani
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Government Regulation ◽  
Best Practice ◽  
Central Government ◽  
Study Data ◽  
Accounting System ◽  
Accrual Accounting ◽  
Interpretive Case Study

This study aims to understand an accounting system change of a local government in Indonesia. This study is a qualitative and interpretive case study. Data collection is done through interviews of key actors who were involved in the process of accrual accounting institutionalization and documentation.The result of this study shows that the institutional isomorphism occurs on the implementation of accrual accounting at the local government. Coercive isomorphism are shown by the finding that the adoption of accrual accounting was affected by the central government, namely by issuing the regulations such as Government Regulation no. 71 of 2010 and Regulation of the Minister of Home Affairs no.64 of 2013. Normative isomorphism was found on the findings of consultant and academic involvement in the implementation of accrual accounting. Mimetic isomorphism was found when the local government conducted benchmarking to the other local governments that became the best practice in the accrual accounting implementation in Indonesia. In reality these three forms of institutional mechanism were interact each other, then contribute in influencing the practices and the actors during the accrual accounting institutionalization process in the local government.

scholarly journals Assignment of functions to local authorities in Lesotho

2017 ◽  
pp. 58-74
Author(s):  
Hoolo Nyane
Keyword(s):  
Local Government ◽  
Service Delivery ◽  
Local Governments ◽  
Central Government ◽  
Intergovernmental Relations ◽  
Local Development ◽  
Local Authorities ◽  
Community Councils

In Lesotho the adoption of the new constitution in 1993 made provision for local development. These constitutional provisions were only operationalised in 1997 through an Act of parliament (Local Government Act 1997). The question of how functions are assigned between the central and local governments has always been an area of dispute. The Act attempted to demarcate the assignments through the Schedules to the Act which embody the functions of local authorities at various levels – community councils, urban councils and district councils. However, local development and service delivery continue by and large to be undertaken by central government despite the demarcation. The purpose of this paper, therefore, is to critically analyse the challenges of assignment of functions to local authorities in Lesotho. The paper contends that as the assignment of functions is integral to decentralisation in Lesotho, intergovernmental relations and assignment of functions should be incorporated into the country’s constitution.

Public interest and accrual accounting: are they aligned?

2018 ◽  
Vol 14 (4) ◽  
pp. 366-380 ◽  
Author(s):  
Sylvia ◽  
Eko Ganis Sukoharsono ◽  
Yeney Widya Prihatiningtias ◽  
Roekhuddin
Keyword(s):  
Local Government ◽  
Public Interest ◽  
Local Governments ◽  
Central Government ◽  
Social Situation ◽  
Government Accountability ◽  
Accrual Accounting ◽  
Content Type ◽  
The Public ◽  
The Government

Purpose The purpose of this paper is to evaluate the merits of accrual-based accounting for the public in an Indonesian local government. It gives insights into the connection between the new practices and responses from government apparatus. Design/methodology/approach The paper applies genetic structuralism from Pierre Bourdieu to study the interrelation of habitus, field and capital in the accrual accounting implementation. Findings The result indicates a symbolic dominance of central government in the implementation of accrual-based accounting in the local government. Accrual accounting is considered to be a technique of government accountability which is independent from political and social situation. Practical implications The accrual accounting implementation preoccupies the government officials in their study of the preparation of financial statements while its utilization to increase the public welfare is still ignored. Social implications The government still prioritizes accountability and transparency for managerial and political purposes. Hence, the public interest is less superior compared with the formalities established between governments – the central government and local governments – and the regional legislator. Originality/value This paper contributes to the evaluation of the alignment of government policy with the public interest.

Municipal debt will hinder financial reform in China

2015 ◽  
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Government Debt ◽  
Bank Loans ◽  
Municipal Bonds ◽  
Short Term ◽  
Fiscal Stimulus ◽  
Content Type ◽  
Loan Financing

Subject China's local government debt bailout. Significance China's local governments issued 734 billion renminbi (118 billion dollars) last month, accounting for some 35% of total bond issuance. A 1-trillion-renminbi local government debt-swap programme was introduced in March, under a pilot initiative announced in August 2014, and expanded last month by another 1 trillion renminbi. A slowdown in investment and an increasing use of bank loans by local governments to roll over debt may now have forced the central government to act boldly. Impacts Falling fiscal revenues, policy targets and the legacy of the 2008-09 fiscal stimulus will increase the supply of municipal bonds. State-owned commercial banks under the direction of the PBoC will mop up excess supply. Slower investment and lending puts pressure on central government to accelerate infrastructure investment and public-private partnerships. The PBoC will further adjust bank reserve ratios downwards if the slowdown in investment persists. Shifting away from short-term loan financing will shrink bank margins and slow down interest rate reform.

Using game theory to stimulate provision of local public facilities

2017 ◽  
Vol 35 (4) ◽  
pp. 368-379 ◽  
Author(s):  
Asle A. Gauteplass ◽  
Arnt O. Hopland
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Content Type ◽  
Theoretical Concepts ◽  
Local Public Services ◽  
Public Facilities ◽  
Selection Framework ◽  
The Individual ◽  
Almost All

Purpose The purpose of this paper is to study how the central government can use well-known game-theoretical concepts in order to stimulate provision of local public facilities. Design/methodology/approach The authors use the classical adverse selection framework to discuss how the central government can use investment transfers as efficiently as possible to stimulate increased provision of local public facilities. Findings The benefits of local public facilities, such as kindergartens, schools, and primary healthcare institutions are greater than what each local government takes into account. Consequently, the central government, which maximizes social welfare in total, wants more local public facilities than the individual local government find optimal to supply. The central government thus would want to stimulate additional provision of local public facilities using contracts where local governments receive a transfer as compensation for increasing their supply. Since local governments differ regarding their efficiency in supplying facilities, the required amount of facilities and the corresponding transfer size should be allowed to vary across local governments. Originality/value Almost all countries are organized with multiple tiers of government, and local governments are important providers of many important welfare services. After labor, facilities are probably the second most important input in production of local public services. This paper offers insights into how the central government can efficiently stimulate the production of local public facilities.

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