Local Government Financial Performance and Its Affecting Factors

Abstract

The purpose of this study was to assess the Financial Performance of the Regional Government of South Buton Regency and identify the factors that influence it. The research was conducted at the Regional Finance and Asset Agency of South Buton Regency. The population in this study is the Regional Revenue and Expenditure Budget Realization Report (APBD). The sample in this study is the South Buton Regency Regional Revenue and Expenditure Budget Realization Report for the period 2016-2022. This study uses a descriptive approach with quantitative methods, using primary and secondary data. Data collection techniques in this study were carried out by means of documentation and interviews. The data analysis technique used ratio analysis and SPSS 29 tools. The results showed that the percentage of Regional Financial Independence showed an intructive relationship pattern with very low financial capability characteristics. In contrast, Local Government Financial Performance as measured by the Effectiveness Ratio is in the effective criteria range. The Activity Ratio shows that the Regional Government of South Buton Regency prioritizes Operational Expenditure over Capital Expenditure. In addition, the Growth Ratio shows that Local Revenue fluctuates every year. Balance funds have no effect on the financial performance of the South Buton Regency Regional Government. Likewise, regional spending and local taxes have no influence on financial performance.