The development of good governance model for performance improvement
Authors: Haliah Haliah , Nirwana Nirwana 
Published: June 2019

Purpose

The purpose of this paper is to re-test the determinant factors of the quality of financial statements and performance of the government by adding contextual factors, such as the personal factor, system/administrative factor and political factor, that may affect the quality of financial statement information and performance of the government. The personal factor is proxied to the competencies that affect the quality of financial statements and performance. The social administrative factor is proxied on the regulations and presentation of quality financial statements.

Design/methodology/approach

The analysis unit in this study was conducted at the organizational level. The research object was in the South Sulawesi Province. This was a descriptive and verificative research with a survey technique. Based on the objectives of the research, this is an explanatory study. The research method used was an explanatory survey with a quantitative approach. The population of this research was proxied to the Regional Unit Organization (Organisasi Perangkat Desa/OPD) which compiled the financial statements in the South Sulawesi Provincial Government and consisted of 803 units of local government agencies (Satuan Kerja Perangkat Daerah or SKPD). The purposive sampling technique was chosen under the following criteria: the regional government whose financial statement has been audited by the BPK, the regional government whose financial accountability report has been evaluated by Indonesia’s Agency for Financial, and Development Supervision (Badan Pengawasan Keuangan dan Pembangunan or BPKP). In line with the criteria mentioned above, the minimum samples required for 26 observations/indicators are 5 × 26 = 130 respondents. The sample size met the minimum sample requirement of five for each group (cell) (Hair et al., 2006, p. 112).

Findings

The personal factor “competence” affects the financial statements’ quality. The high personal factor “competence” will affect the high financial statements’ quality. The system/administration factor “regulation” affects the financial statement quality. The high system/administration factor “regulation” will affect the high financial statements’ quality. Political factors affect the financial statements’ quality. The high political factors will affect the high financial statements’ quality. The personal factor “competence” has no direct effect on the performance. The high personal factor “competence” will not affect the high or low of the performance. However, there is a significant indirect effect between the personal factor “competence” on performance through the financial statements’ quality, which means that the higher personal factor “competence” will lead to higher performance through financial statements’ quality. The system/administration factor “regulation” does not directly affect the performance. The high system/administration factor “regulation” will not affect the high or low of the performance. However there is a significant indirect effect between the system/administration factor “regulation” on performance through the financial statements’ quality which means that higher system/administration factor “regulation” will lead to higher performance through financial statements’ quality. The political factor does not directly affect the performance. The high political factors will not affect the high or low of the performance. However there is a significant indirect effect between political factors on performance through the financial statements’ quality which means that the higher political factor will lead to higher performance through the financial statements’ quality. Financial statements’ quality affects the performance. The high financial statements will affect the performance.

Originality/value

The research issues raised are the increasing public demands for the government services and accountability, while on the other hand, the government is faced with the report and financial quality that are below the expectation. This issue is a national strategic issue, leading this research to aim at providing guidelines that can help the regional government to formulate operational policies and strategies for the quality improvement of financial statement and performance of the regional government.