Binder1 BUNGA RAMPAI-dikompresi

Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI i
Bunga Rampai : Innovation and Technology for Reformation in

Public Sector Finance
First Edition, First Printing, August 2023
WRITER:
Jember University and Lambung Mangkurat University
EDITOR:
Prof. Dr. Abdul Halim, M.B.A., Ak., CA
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ii Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
FOREWORD
Head of Writing and Editor Team and Head of

APSSAI
Praise the presence of God Almighty for all His mercy and wisdom
that this book, “BUNGA RAMPAI: Innovation and Technology for
Reformation in Public Sector Finance” is completed. This book is
arranged systematically to facilitate understanding and add references
for readers on better public sector finance comprehension.
The series of concepts and contents presented in this book aims to
be a window of knowledge for readers in systematically understanding
concepts on public sector finance. The contents of this book are
compiled based on theoretical studies and research results related to
public sector finance.
This book is a joint work and is supported by many parties
from various parties. Therefore, on behalf of all Authors and Editors
and at the same time the Chairman of the Association of Indonesian
Accounting S2 Study Programs (APSSAI) I would like to thank:
1. Rector of Jember University
2. Rector of Universitas Gadjah Mada
3. Rector of Lambung Mangkurat University
4. Dean of the Faculty of Economics and Business, University of
Jember
5. Dean of Faculty of Economics and Business Universitas Gadjah
Mada
6. Dean of the Faculty of Economics and Business, Lambung
Mangkurat University
7. All parties who have helped in the process of completing this book,
both support from family, friends of fellow lecturers and students
who helped with ideas in improving the book materials and were
willing to provide an overview of thoughts for the completion of
this book.
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI iii
We wish this book, which is a contribution from Master of
Accounting students of Jember University and Lambung Mangkurat
University, can become a contribution of constructive thinking and can
be a horizon opener in understanding public sector finance theoretically
and its implementation. Suggestions and criticisms are always expected
for the perfection of the contents of this book in the future. May it be
charity for all of us. Amen.
Yogyakarta, Medio August 2023
Prof. Dr. Abdul Halim, MBA, Akt. CA
iv Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
FOREWORD
Prof. Dr. Isti Fadah, M.Si, CRA.
All Praises to God Almighty for giving His mercies and blessings,
the “BUNGA RAMPAI: Innovation and Technology for Reformation in
Public Sector Finance” is completed. The systematics of the discussion
of “BUNGA RAMPAI: Innovation and Technology for Reformation in
Public Sector Finance” is to discuss several case studies on public
sector finance. The author hopes this book as the outputs of articles by
Master of Accounting students, Faculty of Economics and Business,
University of Jember and Lambung Mangkurat University can later be
useful for all.
The author would like to express sincere gratitude to the Rector
of Jember University, Rector of Gadjah Mada University, Rector of
Lambung Mangkurat University and Dean of the Faculty of Economics
and Business UNEJ/UGM/ULM and the Leaders and academic
community. The author realizes thst this book beyond perfection.
Therefore the author expects constructive suggestions from readers.
Jember, August 2023
Prof. Dr. Isti Fadah, M.Si, CRA
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI v
vi Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
FOREWORD
Dr. Atma Hayat, Drs, Ec, M.Si, Ak, CA.
Assalamualaikum wr wb, Shalom, Om Swasti Astu, Namo

Budhaya, Greetings of Virtue.
Respctable,
1. Rector of Jember University
2. Vice Rector of Jember University
3. Rector of Lambung Mangkurat University
4. Vice Rector of Lambung Mangkurat University
5. Dean of the Faculty of Economics and Business, University of
Jember
6. Vice Dean of the Faculty of Economics and Business, University of
Jember
7. Speakers
I am proud of our students, especially those who have completed

their articles / theses so that they can be disseminated on this occasion.
We always give thanks to the presence of God Almighty for we can all
gather at the International Dissemination: Innovation and Technology
for Reformation in Public Sector Finance event. This event is a
continuation of the collaboration between FEB ULM and FEB UNEJ.
Indeed, this activity is the driving force for achieving performance
indicators for each faculty unit. With the big theme “Public Sector”, we
collaborate with FEB UNEJ to provide exploration space for audiences
to deepen the role of IT innovation in public sector financial reform.
In this ever-evolving era, innovation and technology have become
key drivers in transforming various aspects of life, including the public
and financial sectors. This transformation emerged in response to
public demands for higher efficiency, transparency, and accountability
in the management of public funds. In this event, we will explore
how innovation and technology can play a vital role in public sector
financial reform.
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI vii
One of the key sticking points in public sector financial reform
is increasing transparency and accountability. Technology comes as a
means to achieve this goal in a more effective way. Solutions such as
financial systems based on blockchain technology enable immutable
records of transactions that can be accessed by various parties in real-
time. It does not only reduce the risk of fraud, but also gives citizens
confidence that public funds are being used correctly.
Innovation and technology also present the potential to improve
efficiency in public sector financial management. Automation of
routine processes such as payments, budget management, and reporting
can reduce the time and cost required. In addition, advanced analytics
powered by artificial intelligence can help decision makers to formulate
better strategies based on identified data patterns, resulting in smarter
and effective budget allocations.
However, implementing innovation and technology in the public
sector requires good empowerment and education. Human resources
need to be given training and understanding of the technology to be
applied. These financial reforms must be accompanied by skill-building
programs so that public employees can face technological challenges
with confidence. With this empowerment, the public sector will be able
to take maximum advantage of the potential of technology.
In closing, we see that innovation and technology are important
pillars in public sector financial reform. With enhanced transparency,
enhanced efficiency, and strong empowerment, we can envision a
brighter future for public finance. However, we must remember that
technology is only a tool; A strong spirit of reform and commitment to
better public services remain key foundations in achieving this goal.
Thanks.
Wassalamualaikum wr wb, Peace be upon you, Om Shanti Shanti
Om.
Banjarmasin, August 2023
Dr. Atma Hayat, Drs, Ec, M.Si, Ak, CA.
viii Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
Contents
FOREWORD Head of Writing and Editor Team and Head of APSSAI.......iii

FOREWORD Prof. Dr. Isti Fadah, M.Si, CRA.............................................. v
FOREWORD Dr. Atma Hayat, Drs, Ec, M.Si, Ak, CA................................vii
ARTICLE 1 MOSQUE ACCOUNTING: PANCASILA IDEOLOGY (A

CASE STUDY OF DARUL FALAH MOSQUE JOMBANG JEMBER).1
1. INTRODUCTION.................................................................................... 1
1.1 Background ..............................................................................1
1.2 Problems Formulation...............................................................3
1.3 Purpose......................................................................................3
2. DISCUSSION........................................................................................... 3
2.1 Brief Profile of Darul Falah Mosque ........................................3
2.2 Organizational Structure of Mosque Management ..................4
2.3 Mosque Financial Statements based on FASI 35......................4
2.4 Notes to Financial Statements ..................................................6
2.5 Application of Pancasila Ideology.............................................6
3. CONCLUSION......................................................................................... 8
3.1 Conclusion.................................................................................8
3.2 Suggestions...............................................................................9
4. BIBLIOGRAPHY..................................................................................... 9
ARTICLE 2 ACCOUNTABILITY ACCOUNTING IN PLACES OF

WORSHIP: A STUDY ON TEMPLE ACCOUNTABILITY.................. 11
1. INTRODUCTION.................................................................................. 11
1.1 Background of the problem..................................................... 11
1.2 Problems Formulation.............................................................12
1.3 Purpose....................................................................................12
2. DISCUSSION......................................................................................... 13
2.1 Characteristics of religious organizations...............................13
2.2 Purpose, Function, and Role of Religious Organizations.......14
2.3 Temples ..................................................................................15
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI ix
2.4 Organizational Structure in Temples.......................................17
2.5 Temple Funding Sources.........................................................18
2.6 Financial Management in Temples..........................................19
2.7 Public Accountability Practices in Religious Organizations...21
2.8 Accountability Practices in Financial Management in Temples.. 22
2.10 Financial Statements of Religious Organizations Based on
ISAK 35...................................................................................26
2.11 Financial Management Reporting in Temples.......................28
3. CONCLUSION....................................................................................... 30
3.1 Conclusion...............................................................................30
3.2 Suggestions.............................................................................32
4. BIBLIOGRAPHY..................................................................................... 32
ARTICLE 3 APPLICATION OF PSAK 109 ACCOUNTING AT

AMIL ZAKAT, INFAQ AND SADAKAH OF MUHAMMADIYAH
INSTITUTIONS (LAZISMU) IN LUMAJANG REGENCY ................ 35
1. INTRODUCTION.................................................................................. 35
1.3 Purposes..................................................................................39
2. DISCUSSION......................................................................................... 39
2.1 Research Methods...................................................................39
2.2 Description of Research Subject at LAZISMU Lumajang.....39
2.3 Compatibility of the Application of Zakat, Infaq and Alms
Accounting in LAZISMU Lumajang Regency with PSAK 109.40
3. CONCLUSION....................................................................................... 44
3.1 Conclusion...............................................................................44
3.2 Suggestions.............................................................................44
4. BIBLIOGRAPHY................................................................................... 45
ARTICLE 4 AUDITOR EDUCATION AND FORMATION IN THE

IMPLEMENTATION OF FINANCIAL REPORT REVIEW ON
DISTRICT GOVERNMENT OF SITUBONDO .................................... 47
1. INTRODUCTION.................................................................................. 47
x Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
1.1 Background..............................................................................47
2. DISCUSSION......................................................................................... 52
1. The Effect of Education on the Implementation of Review of
Local Government Financial Statements ................................52
2. The Effect of Auditor Formation on the Implementation of
Review of Local Government Financial Statements ..............53
3. CONCLUSION....................................................................................... 55
1.1 Conclusion...............................................................................55
4. BIBLIOGRAPHY................................................................................... 55
ARTICLE 5 IS INDONESIAN PUBLIC SECTOR INTERNAL AUDIT

EFFECTIVE?.............................................................................................. 57
1. INTRODUCTION.................................................................................. 57
Background...................................................................................57
2. DISCUSSION......................................................................................... 61
2.1 Internal Audit of Indonesia’s Public Sector ............................61
2.2 Internal Auditor Effectiveness ................................................63
2.3 Factors Affecting the Effectiveness of Internal Auditors .......64
2.4 .......Independence, Organizational Culture, Integrity, Competence,
and Cooperation of External Auditors Improve the Effectiveness
of Internal Audit in Indonesia’s Public Sector ............................. 65
3. CONCLUSION....................................................................................... 67
1.1 Conclusion...............................................................................67
4. BIBLIOGRAPHY................................................................................... 67
ARTICLE 6 UNIVERSITY ACCRUAL ACCOUNTING IN

INDONESIA ............................................................................................... 73
1. INTRODUCTION.................................................................................. 73
1.1 Background..............................................................................73
2. DISCUSSION......................................................................................... 79
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI xi
2.1. Student Fees ..........................................................................81
2.2. Research Fund .......................................................................82
2.3. Capital Grants ........................................................................82
2.4 Heritage Library......................................................................83
2.5. Heritage of Artistic Collection ..............................................84
2.6. Analysis Results ....................................................................85
3. CONCLUSION....................................................................................... 86
3.1 Conclusion...............................................................................86
4. BIBLIOGRAPHY................................................................................... 87
ARTICLE 7 ACCOUNTABILITY OF MOSQUE FINANCIAL

MANAGEMENT........................................................................................ 89
1. INTRODUCTION.................................................................................... 89
1.1 Background..............................................................................89
1.2 Problem s Formulation............................................................91
2. DISCUSSION......................................................................................... 91
3. DISCUSSION AND RESULTS............................................................. 93
4. CONCLUSION..................................................................................... 100
5 BIBLIOGRAPHY................................................................................. 101
ARTICLE 8 INFORMATION TECHNOLOGY USE ON

INTERNAL CONTROL AS FRAUD TENDENCY ALARM IN THE
GOVERNMENT SECTOR ( A CASE STUDY IN THE DEPARTMENT
OF PUBLIC WORK AND SPATIAL PLANNING OF LUMAJANG
REGENCY)............................................................................................... 103
1. INTRODUCTION................................................................................ 103
1.1 Background ..........................................................................103
2. DISCUSSION....................................................................................... 105
2.1 Fraud Tendency.....................................................................105
2.2 Internal Control ....................................................................106
2.3 The Use of Information Technology.....................................107
2.4 Research Site: RAO of Lumajang District Government ......107
2.5 E-financing Implementation’s Adherence to COSO Internal
xii Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
Control Components and the Efficiency of Internal Control.107
2.6 Internal Control as an Alarm to Prevent Fraud..................... 110
3. CONCLUSION....................................................................................... 111
4. BIBLIOGRAPHY................................................................................... 112
ARTICLE 9 SOA FUNDS: ACCOUNTABILITY, TRANSPARENCY

AND THE CHALLENGE IN INDONESIA........................................... 113
1. INTRODUCTION................................................................................ 113
1.1 Background........................................................................... 113
2. DISCUSSION....................................................................................... 114
2.1 Agency Theory...................................................................... 114
2.2 Good Governance ................................................................. 115
3. CONCLUSION..................................................................................... 121
3.1 Conclusion.............................................................................121
4. BIBLIOGRAPHY................................................................................. 122
ARTICLE 10 THE IMPORTANCE OF FINANCIAL MANAGEMENT.

ON EDUCATIONAL FOUNDATION.................................................... 125
1. INTRODUCTION................................................................................ 125
1.1 Background...........................................................................125
1.2 Problems Formulation...........................................................127
2. DISCUSSION....................................................................................... 128
2.1 Financial Management of Educational Foundations ............128
2.2 The Importance of Financial Management in Education
Foundations...........................................................................128
2.3 Education Foundation Financial Management Cycle ..........129
2.4 Financial System in Education Foundations.........................130
2.5 Presentation of Financial Statements of Education
Foundations ..........................................................................131
2.6 Taxation aspects of educational foundations ........................137
2.7 Financial Management Challenges of Education Foundations ..
138
3. CONCLUSION..................................................................................... 139
4. REFERENCES..................................................................................... 140
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI xiii
ARTICLE 11 CONTINUOUS AUDITING DAN COUNTINUOUS
MONITORING (CACM): TRANSFORMATION OF PUBLIC
SECTOR SUPERVISION IN THE DIGITAL AGE.............................. 143
1. INTRODUCTION................................................................................ 143
1.1 Background...........................................................................143
2. DISCUSSION....................................................................................... 144
2.1 Agency Theory .....................................................................144
2.2 Internal Auditor Transformation ...........................................145
2.3 Continuous Auditing Concept..............................................147
2.4 Continuous Monitoring Concept .........................................148
2.5 Application of Continuous Auditing and Continuous
Monitoring (CACM) ............................................................149
2.6 CACM and Three Lines Model ...........................................152
2.7 CACM for Effective and Efficient Organization ..................153
3. CONCLUSION....................................................................................... 155
4. BIBLIOGRAPHY................................................................................... 156
ARTICLE 12 DOES RGIS “REDUCE” OR STRENGTHEN THE

BUDGET FUNCTION OF THE RLA?.................................................. 159
1. INTRODUCTION................................................................................ 159
1.1 Background...........................................................................159
2. DISCUSSION....................................................................................... 161
2.1 Budget...................................................................................161
2.2 RLC Budget Function...........................................................163
2.3 The role of RLC in the budgeting process............................165
2.4 Regional Government Information System (RGIS)..............166
2.5 RGIS in the Implementation of the RLC Budget Function .. 167
3. CONCLUSION...................................................................................... 169
4. BIBLIOGRAPHY................................................................................... 170
ARTICLE 13 FINANCIAL MANAGEMENT OF STATE

UNIVERSITIES PUBLIC SERVICE AGENCY (PTN BLU) AND
LEGAL ENTITY STATE UNIVERSITIES (PTN BH)......................... 173
1. INTRODUCTION................................................................................ 173
xiv Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
1.1 Background...........................................................................173
1.2. Problems Formulation..........................................................175
2. DISCUSSION........................................................................................ 175
2.1 PTN with BLU .....................................................................175
2.2 PTN-BH ...............................................................................177
3 CONCLUSION..................................................................................... 183
4. BIBLIOGRAPHY................................................................................. 183
ARTICLE 14 ROLE OF VILLAGE FINANCIAL SYSTEM (VFS)

APPLICATION PLANNING AND INTERNAL CONTROL
IN IMPROVING ACCOUNTABILITY OF VILLAGE FUND
MANAGEMENT...................................................................................... 185
1. INTRODUCTION................................................................................ 185
1.1. Background..........................................................................185
2. DISCUSSION....................................................................................... 189
1.1. Planning on Village Financial System Accountability.........189
2.2. VFS Application Uses and Implications..............................191
2.3. Internal Control on Village Financial Supervision...............192
2.4. Accountability of Village Fund Management......................192
3. CONCLUSION..................................................................................... 193
4. BIBLIOGRAPHY................................................................................. 194
ARTICLE 15 INSPECTORATE GENERAL (INTERNAL AUDIT)

AND AUDIT RISK: IS THE ROLE OF THE INSPECTORATE
GENERAL VULNERABLE TO RISK?................................................. 197
1. INTRODUCTION................................................................................ 197
1.1. Background..........................................................................197
2. DISCUSSION....................................................................................... 200
1.1 Institutional Theory...............................................................200
1.2 Accountability Theory...........................................................200
1.3 Audit and Internal Audit........................................................200
1.4 Internal Audit Effectiveness..................................................201
1.5 Regulations related to the Internal Control System of the
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI xv
Government and the Inspectorate General............................201
1.6 Risk.......................................................................................202
1.7 Audit Risk..............................................................................202
1.8 Risk management .................................................................202
1.9 Risk Maturity........................................................................203
1.10 Government Internal Control System.................................203
1.11 Government Internal Supervision Apparatus......................203
1.12 Risk-Based Internal Control................................................204
1.13 Inspectorate General and Good Governance.......................204
1.14 Previous research on risk-based internal audit....................205
1.15 Risk-based Internal Audit in Indonesia and Its Problems...206
1.16 Inhibiting Factors for Risk-Based Audit Assignment.........206
1.17 Discussion of factors hindering the planning of a Risk-Based
Internal Audit.........................................................................207
1.18 Paradigm Shift in Risk Based Internal Auditing Approach.207
2. CONCLUSION..................................................................................... 207
3. BIBLIOGRAPHY................................................................................. 207
DRAFTING TEAM.................................................................................... 209

Thank-you note........................................................................................... 210
xvi Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
ARTICLE 1
MOSQUE ACCOUNTING: PANCASILA IDEOLOGY
(A CASE STUDY OF DARUL FALAH MOSQUE
JOMBANG JEMBER)
By:
Femba Akris Diantoro
Agung Budi Sulistiyo
Mohammad Fiqkri
1. INTRODUCTION
1.1 Background
Indonesia as a state based on Pancasila is adaptable to the dynamic
of society that experience several condition as the time changes.
The ideology of Pancasila, as an openness of developing values and
concepts, can straighten out the solution of every problem of society
because it accepts cultural, historical, philosophical, juridical and
actualization (bpip.go.id).
Pancasila proposes the discussion on internalization process,
it does not only build awareness, but willingness to improve critical
accounting patterns in Indonesia (Aneswari &; Musmini, 2017). In
the public sector, especially religious institutions, such as mosques,
churches and monasteries, responsibility is not limited only to
“economic value” but also spiritual or religious value, which manifests
in the form of gratitude to God and sincere feelings when only
expecting the God’s blessings. The explanation of responsibility is not
limited to accounting reports. It relates to the accessible oral or written
information both directly or indirectly (Lating, 2023).
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI 1
Accounting records the purpose of truth and certainty, openness,
and fairness between the two parties to apply a deep sense of
responsibility in carrying out a transaction in accordance with the
responsibility for the fulfillment of obligations to oneself and others,
which can be done through the financial department of the mosque.
Good mosque financial management shows the existence of trustworthy
and responsible managers (Halim & Kusufi, 2014).
Non-profit mosque activities in carrying out operations,
construction, and others, of course, the management is required make
a recording process according to the guidelines of FASS 45 or FASI
35 to see and control every income and expenditure (Lating, 2023).
Reliable management of financial assets and mosque property does not
only aim to keep those assets adequate, healthy, and functional. but
also to make the best use of funds and as efficiently as possible, and to
use them to improve the welfare and prosperity of mosques (Shonhadji
et al., 2023).
In relation the the above explanation, many previous studies such as
mainstream accounting are based on a set of philosophical assumptions
with underlying interpretation and critical consequences. Chua (1986)
and Kamayanti (2014) see that accounting education is trapped in
objectivity and rationalism because accounting it is synonymous with
numbers and quantification. And Qou vadis pancasila accounting
education provides a vehicle aimed at awakening the value of pancasila
in the accounting education process (Aneswari &; Musmini, 2017).
As well Sitorus et al., (2017) explain that a new human personality
called homo pancasilais (humans who uphold Pancasila) is offered.
(Yuliarti, 2019) This new personality is used as the basis for economic
and accounting assumptions. In the community, the practice of mosque
financial management is based on trust because it involves the good
name of the mosque management, thus affecting the image of the
mosque.
Therefore, the importance of applying the ideology of pancasila
in every recording of non-profit organizations, especially the FASI 35
Mosque Accounting with a view of pancasila culture in mosques, aims
to create professional accountants with the spirit of pancasila as an
effort to incorporate pancasila ideology into culture. It aims to bridge
the basis of Pancasila with every accounting recording process in non-
2 Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
profit organizations so that they are always compliant, avoid fraud in
organizations, especially non-profit organizations to always present
reliable financial statements to the public.
Based on the description above, this study aims to know and analyze
the state of financial statements in the Darul Falah Jombang Jember
mosque by bringing the culture of pancasila ideology closer to be a
representation of the performance of non-profit organization interests
in mosque accounting records.
1.2 Problems Formulation

From the background above, the researcher has a formulation of
the problem of how the perspective of Mosque Accounting with the
ideology of Pancasila at the Darul Falah Jombang Jember Mosque
1.3 Purpose
To know and analyze how the state of financial statements in the Darul
Falah Jombang Jember mosque bring the culture of Pancasila ideology
closer to be a representation of the performance of the interests of non-
profit organizations in recording mosque accounting.
2. DISCUSSION
2.1 Brief Profile of Darul Falah Mosque
Darul Falah Mosque was built in 2000. It belongs to a Public Mosque.
It it located in Jombang Krajan II village, RT 02 RW 40, Jombang
Jombang District, Jember, East Java. This mosque has a land area of
200 m2, a building area of 500m2 with the status of waqf land. With
zip code 68168.
Darul Falah Mosque has a vision of realizing an independent
mosque, a vehicle for deliberation, da’wah institutions, the development
of Islamic science, and culture as well as economic empowerment of
the people and uniting the people based on faith and piety.
2.2 Organizational Structure of Mosque Management
The organizational structure of mosque management must at least
consist of:
1. The Chairperson
2. The Vice
3. Secretary
4. Treasurer
5. Imarah Division
6. Dharah Division
7. Ri’ayah Division
8. Public relations Division
9. Division of Commemoration of Islamic holidays
2.3 Mosque Financial Statements based on FASI 35

The accounting records of the Darul falah jombang Jember mosque
is presented simply in the form of transaction information there are
debits, credits, and balances in the financial statements where if there
are expenses will be recorded in credit and vice versa there is debit
income, because in this recording the mosque as a source of community
fund management.
Image: accounting recording of darul falah mosque jombang jember
Financial statements are the basic system of recording cash basis where
every transaction will affect cash as an asset owned by the mosque. So
that it is still recorded in written form with such a single entry, the
Accounting Transaction Recording of Darul Falah Jombang Jember
Mosque should develop a mosque accounting information system
application that will be installed on the computer or laptop of the
mosque takmir management, including: (1). Chairperson of the Takmir,
(2). Vice Chairperson (3). Foundation treasurer (4). Treasurer takmir of
the mosque. Input transactions that have been inputted in excel format
into the mosque’s accounting information system. So, from the need for
further development such as double entry so that transactions will be
seen clearly and more complete in excel and transparent in the public.
Financial Statements of Public sector organizations, especially
the Darul falah jombang jember mosque, have not fully prepared
financial statements in accordance with guidelines of accounting
standards, namely. FASI 35. It regulates the presentation of financial
statements of non-profit organizations, as well as reporting guidelines
for non-profit organizations, including mosques. The FASI 35 has been
valid since January 1, 2020, replacing FASS 45 with DSFS number 13
which began with the issuance of DE (Draft Exploration) on September
26, 2018 (Standard et al., 2018). These guidelines only write journal
transactions, which is not completed with comprehensive reports, etc.,
that applies in FASI 35 regulations.
Regarding the above explanation, it shows that the accounting
description of the Darul Falah Jombang Jember mosque is completely
incomplete. It is explained by Rakhmawati et al., (2020) that financial
statements is an adaptation of community development practice by
considering three requirements, namely community-based, local
resource-based and sustainable steps such activities as team building,
goal formulation, stakeholder identification, collection and analysis.
2.4 Notes to Financial Statements

Notes to financial statements are details or explanations of all
transactions that occur in an entity in a certain period. Notes to financial
statements contain a detailed explanation of the general description of
the mosque, an explanation of the financial statement items presented,
the essence of the accounting policies applied, as well as several
additional sources of information that are important, so that they must
be presented systematically. Therefore, the posts in the statement of
financial position, comprehensive statement, cash flow statement, net
asset statement must be related. Thus, the condition of the mosque’s
financial statements shall be accompanied by explanations in it.
2.5 Application of Pancasila Ideology

In regard to the perspective of Pancasila Ideology, accounting does not
only recognize material elements. Non-material concepts must also be
considered in building an accounting paradigm in the perspective of
Pancasila (Sitorus, 2015). Humans are always focused on acquiring
material wealth and forget that they must be responsible to the universe
(Sitorus, Habibaty, &; Triyuwono, 2016). In the practice, the principles
of precepts in life must be understood. The philosophical principle of
the first precept emphasizes that Indonesia is not a secular state that
separates religious affairs from state affairs. Religious values are a source
of vertical transcendent ethics and spirituality, which are important and
become the ethical basis of state life (Latif, 2015: 42). The modern
accounting concept explained by Luca Pacioli actually reflects the
relationship between accounting and religion. With the initiation of the
word “in the name of god” as an opening (Sitorus, 2015). The second
precept of just and civilized humanity reflects an important aspect in
the concept of accounting considering that humans are parties as well as
implementers who can develop the main determining factors (Sitorus,
2015). The third precept (Triyuwono, 2006b) states that the concept of
ego in accounting leads to human dehumanization while (latif: 2012:
564-565) describes the struggle for self-interest in capitalism which
is the basis of modern accounting. The fourth precept means that
based on this fourth precept, all implementation of state practices must
uphold people’s sovereignty in the spirit of consultation led by wisdom
(Latif, 2015: 45). The moral message of the fifth precept is the value
of divinity, humanity, national values and ideals, and consultative
democracy maintains its integrity if it can create social justice (Latif,
2015: 45).
Sitorus (2015) explained that it cannot be found in the assumption
of humans as homo economicus. The Homo aspect of pancasila can be
implemented in accounting when the latter is imbued with the spirit of
Pancasila. Therefore, humans and accounting must have the spirit of
Pancasila to realize human civilization.
Based on the results of in-depth interviews conducted by
researchers to resource persons regarding the ideology of pancasila,
which was directly asked to resource person I as treasurer of the Darul
Falah mosque about what is the relationship between pancasila and
mosque accounting records. He replied as follows:
“Yes, recording is strong evidence for a transaction, so if it is
described in the value of Pancasila ideology, if it has been recorded,
it means that it has done things that must be accounted for , which
have been done in the world and in the hereafter (resource person
I), researchers ask what are the values that are the basic values of
Pancasila. He replied as follows:
‘There are 5 basic values of Pancasila, the first is the one and only
God, the second is just and civilized humanity, the third is the unity
of Indonesia, the fourth humanity led by wisdom in representative
consultations and the fifth social justice for all Indonesian people’
(resource person I)
Furthermore, the researcher asked why we need to develop
pancasila values in life as follows:
“Yes, developing pancasila requires the right outlook on life or
being able to practice the 5 precepts in life “
Furthermore, the researcher asked about how the mosque provides
financial statements to worshippers. He replied as follows:
“Usually, we submit financial statements every week on the Friday
before Friday prayers begin by reading every fund, expenditure and
cash income in the mosque”.
The researcher asked whether cooperation is needed to prosper
the mosque, he replied as follows:
“It is needed, to promote and prosper the mosque requires
cooperation not only to act alone, but it also takes public deliberation
in acting so what is the right solution”
With the foregoing, it can be concluded that the application of
the ideology of pancasila in recording mosque accounting reports
in Darul Falah Jombang Jember which has been answered by the
management with a sense of responsibility and transparency of funds
as a manifestation raises public trust to carry out the duties of trust
properly.
3. CONCLUSION
3.1 Conclusion
The accounting of the Darul Falah Jombang Jember mosque is still
in the form of adjustments in the mosque’s financial statements when
referring to FASI standard no. 35 which explains the guidelines for
non-profit companies are still in the stage of revamping the details
of the reports of non-profit entities, financial statement information
that must always be disclosed to the public and efforts to cultivate
themselves in the ideology of Pancasila as a noble value that makes
spirituality in living life, To practice and strive to always be integrity
and accountable in managing mosque funds that have been mandated
by the public to achieve the value of common welfare.
The weakness in this study is the lack of informants to interview
and the lack of full exploration in accounting for the ideology of
pancasila applied by Islamic values. Nobody is able to know how deep
human can apply the value of Pancasila in his life. It is important
dor accountants to present information as it raises trust, transparency,
accountability needed.
3.2 Suggestions
As well as suggestions for future research, it is required to ask about
the type of recording whether it is single entry or double entry and
there is always an art in the form of advantages and disadvantages of
each recording that occurs, and further research is expected to examine
accountability by directing and linking to the Qur’an and Islamic law
and Islamic values so that it is clear how accountability is well in the
Islamic accounting era.
4. BIBLIOGRAPHY
Aneswari, Y. R., &; Musmini, L. S. (2017). QUO VADIS1 PANCASILA
IN ACCOUNTING EDUCATION IN INDONESIA? JAMAL
Multiparadigm Accounting Journal, 8(1).
Chua, wai fong. (1986). Radical Development in Accounting thought.
The Accounting Review, 61(4), 601–632.
Halim, A., &; Kusufi, M. (2014). Public sector accounting theories,
concepts, and applications.
Kamayanti, A. (2014). Integration of Pancasilla in accounting education
through a dialogical approach. Journal of Accounting and
Business Education.
Lating, A. I. S. (2023). Presentation of Mosque Financial Statements
in accordance with FASI No. 35 for Improving Transparency
and Accountability (Case Study at Masjid At-Tadzkiroh,
Sidoarjo). Owner: Research & Journal of Accounting, 7(1).
Rakhmawati, I., Wahyuni, F. T., &; Uparwi. (2020). Assistance in the
Development of Mosque Accounting Based on FASS 45 in
Kudus Regency. Abdi Psychonomy, 1(1), 9–16.
Shonhadji, N., Salman, K. R., Soebijanto, A., IMM, N. S., Africa,
L. A., Irwandi, S. A., Aprilia, S. E., &; Panca, E. P. (2023).
Community Service Program for the Implementation and
Assistance in the Preparation of Financial Statements of
Masjid Al Ikhlas Surabaya Based on FASI 35. Journal of
Partnership and Community Empowerment, III (1).
Cytorus, J. H. E. (2015). BRINGING PANCASILA IN AN
ACCOUNTING DEFINITION. Journal of Multiparadigm
Accounting JAMAL, 6(2), 175–340.
Sitorus, J. H. E., Triyuwono, I., & Kamayanti, A. (2017). Homo
Economicus vis a vis Homo Pancasilaus: A Fight against
Positive Accounting Theory. Pertanika, 25, 311–320.
Triyuwono, I. 2006b. Sharia Accounting: Towards the Peak of Divine
Consciousness Manunggaling Kawulo-Gusti.Inaugural
Speech of the Professorship of the Faculty of Economics,
Universitas Brawijaya. Hapless.
Yuliarti, N. C. (2019). Mosque accounting as a solution for transparency
and public accountability. Science and Technology, 4(1).
https://bpip.go.id/berita/1035/488/apa-maksud-dari-pancasila-
sebagai-ideologi-terbuka.html
ARTICLE 2
ACCOUNTABILITY ACCOUNTING IN PLACES
OF WORSHIP: A STUDY ON TEMPLE
ACCOUNTABILITY
By:
Trisna Gayatri
Yosefa Sayekti
1. INTRODUCTION
1.1 Background of the problem
A public sector organization is an organization whose ownership is
not owned by a person or individual, but is owned by the public or
the wider community. Public sector organizations or often referred to
as non-profit entities, are different from private sector organizations,
both in their goals, characteristics, organizational structure, to their
environment. The public sector is non profit oriented. Therefore,
public sector organizations focus more on non-financial performance
achievements (Halim and Kusufi 2014).
Public sector organizations concern about public or community
services, namely health, education, security, and religious services.
This sector refers to organizations existing within a government or a
country. Untoro (2010, in Halim and Kusufi 2014) stated that with the
dimensional approach, public sector organizations are no longer equated
with government institutions alone. It can be such as foundations,
political party organizations, universities, Non-Governmental
Organizations (NGOs), hospitals, etc., including organizations in
places of worship.
A place of worship, also an organization, has a significant
role, especially for the people’s welfare. Places of worship are not
only used as places to pray. It also functions as the centre for other
activities concerning education, social, economic, culture, etc., when
the neighbouring people concern. Therefore, to realize the goals of
a strategic organization, accounting science is needed in supporting
financial management in places of worship, to carry more structured
activities, and to be able to develop the organization better (Halim and
Kusufi 2014).
Accounting science will continue to develop and increase along
with the times that occur. However, in this development, there are still
challenges that need to be faced by every organization, such as the
possibility of fraud cases to corruption. Do not rule out the possibility
that this fraud can occur in non-profit organizations, especially
organizations in places of worship. Therefore, it is especially important
to uphold accountability in the financial management process within
the organization.
Each organization or entity is required to provide information
related to how the management of funds or finances is carried out in
the organization to stakeholders. The information provided must be
relevant and accountable, which is presented in a financial statement
as a form of accountability from the organization to stakeholders.
According to Mardiasmo (2002), accountability is an obligation
owned by the trustee (agent) to provide accountability, present, report,
and disclose all activities that are their responsibility to the trustee
(principal) who has the right and authority to hold the accountable.
In short, an organization needs to report its financial management
openly as a form of obligation carried out to stakeholders in providing
accountability.

From the background above, the researcher has a formulation of
the problem of how important accountability accounting is in the
organization of places of worship
1.3 Purpose
This paper will discuss the importance of accountability accounting in
the organization of places of worship. It also aims to provide information
related to the implementation process of accountability needs to be
carried out by the organization o the worship place, especially temples
to maintain transparency and accountability, and to develop the temple
organization better.
2. DISCUSSION
2.1 Characteristics of religious organizations
Organizations of places of worship or so-called religious organizations
are organizations whose activities are related to certain religions, this
can involve matters of worship or carrying out all obligations to God
related to certain religions (Bastian, 2007 in Halim and Kusufi 2014).
Religious organization refers to organizations that exist within a place
of worship, such as mosques, churches, temples, monasteries, and so on.
Meanwhile, according to Agustana et al. (2017), religious organizations
have a significant role in ensuring the smooth running of a series of
activities carried out in and / or related to the place of worship.
Religious organizations belong to the type of non-profit
organizations, so their main purpose is not for profit. According
to PSAK 45 (2014 Revision) the fundamental difference between
non-profit organizations and business entities lies in the resources
obtained, where non-profit entities get resources or sources of funds
from donations, social assistance, grants, and so on. These resource
givers also do not expect a return on the number of resources they
have provided. This is a key and distinguishing characteristic of private
sector organizations or business entities.
Other characteristics shared by non-profit organizations include
that non-profit organizations produce goods and/or services without
the aim of accumulating profits, and if non-profit entities make profits,
then the amount is not distributed to the founders or owners of the
entity; and within non-profit organizations there is no ownership as
it exists in business entities, in the sense that ownership in non-profit
entities cannot be sold, transferred, or repenetrated, or such ownership
does not reflect the proportion of the entity’s resource sharing at the
time of liquidation or dissolution of the non-profit (PSAK 45 Revision
2014).
2.2 Purpose, Function, and Role of Religious Organizations
As explained above, places of worship or religious organizations are
non-profits, which do not make a profit. Bastian (2007, in Halim and
Kusufi 2014) argues that the main purpose of religious organizations
is to provide services and carry out all activities that are needed or
that have become routine worship rituals in the religious organizations
concerned. Therefore, the main purpose of religious organizations is
to serve the people of the religion, where the services provided are not
only related in terms of worship but can also be in matters such as a
place to share income or discuss a problem, then as a place to provide
religious education for children, as a center for other social activities.
In addition to providing services, religious organizations also have
financial goals. This financial goal is not to make a profit, but rather
leads to financing the needs of worship for the people, both related
to the spiritual field, as well as related to financing in other fields,
such as education, social, and so on. So, it can be said that religious
organizations have financial goals to encourage the implementation of
the main objectives (in terms of providing services) and other goals
that are in accordance with the teachings and provisions in the religion
(Bastian, 2007 in Halim and Kusufi 2014).
Just like the purpose of the place of worship that has been described
earlier, the place of worship is not only used as a place to perform
prayers or religious ritual events alone. Places of worship also function
as centers for the implementation of other activities, be it in terms of
social, cultural, educational, and so on. For example, in education, a
place of worship can serve as a place to hone and educate prospective
community leaders, both for children and adults. In terms of culture,
places of worship can function as places for art performances, such
as temples that sometimes hold art performances during religious
ceremonies. In the social field, places of worship can function as places
to establish communication and strengthen relations between religious
people in the neighborhood. Therefore, places of worship can be said
to have two main roles, namely as a center for worship and a center for
the formation of its people (Halim and Kusufi 2014).
2.3 Temples
The pura or temple is a place of worship for Hindu people in Indonesia.
The word pura comes from Sanskrit, namely pur which means palace
or a place made specifically surrounded or fenced by a boundary wall
(Indradewi 2016). However, along with the times, the term “pura” in Bali
is used more specifically as a place of worship or holy place to worship
God Almighty or Sang Hyang Widhi Wasa and its manifestations and
the holy spirits of ancestors. Previously, the term “pura” as a place of
worship was also referred to as kahyangan or hyang. The term “pura”
itself began to be known since the 10th century which was marked by
the arrival of Empu Kuturan in Bali which brought major changes in
the religious system there (Heriyanti 2019).
There are numbers of temple in Bali, therefore it is referred to
as “Island of a Thousand Temples”. Based on its function, temples
can be grouped into: (1) temples that function as places of worship
to Sang Hyang Widhi Wasa, and (2) temples that function as places
to worship the holy spirits of ancestors. However, it does not rule out
the possibility that there are temples that have a dual function, both to
worship God and worship the holy spirit of ancestors (Heriyanti 2019).
Furthermore, the function of this temple can be grouped into four kinds
based on its characteristics (Asri 2013; Heriyanti 2019), namely:
1. Pura Kahyangan Jagat and Pura Dang Kahyangan Jagat. Pura
Kahyangan Jagat is a temple as a place of worship intended for the
public, while Pura Dang Kahyangan Jagat is a public temple that
functions as a place to worship the greatness of the services of a
holy teacher priest or Dang Guru.
2. Pura Kahyangan Tiga, is a temple that has the characteristics of
territorial unity as a place of worship used by the community in a
village or banjar. So, in every traditional village in Bali has three
main temples called Pura Kahyangan Tiga which symbolizes Tri
Murti (Brahma, Vishnu, Shiva).
3. Swagina Temple, is a functional temple or temple that is used as a
place of worship for people who have the same profession or job. It
aims to be given ease, prosperity, and gratitude for the life that has
been given.
4. Kawitan Temple, is a temple built or determined by the existence of
wit or ancestral ties based on lineage or birth. Kawitan Temple is in
every house of a family.
Classification based on this temple’s characteristics also illustrates

the existence of several types of ties in community groups, be it social,
political, economic, and genealogical ties (birth line).
In addition to having a religious function (as a place of worship
to God), the temple also has other functions, such as in the social,
educational, cultural, political, economic, and tourism or recreation
fields (Asri 2013). In the field of education, the temple functions as a
center of educational activities, both formal activities (Hindu religious
schools) and non-formal education such as learning places to make
banten, penjor, and other religious ceremonies-related equipment. In
terms of culture, the temple can be used as a place for art performances
that are displayed during religious ceremonies or piodalan, both in the
form of dance, sound art, and tabuh art. Furthermore, from an economic
point of view, there is a voluntary donation in the form of sesari or punia
when praying at the temple which will later be given to the temple as a
temple operation and to temple stakeholders (leaders in praying at the
temple). Then, the temple can also function as a spiritual tourism object
that aims to foster a better sense of divinity and as a tourist attraction
in general, such as temples in Bali that have their own attraction for
tourists from abroad (Asri 2013). Meanwhile, in political functions,
sometimes temples are also used as places for political activities or
meetings, for example if it is approaching a general election (Indradewi
2016). However, in addition to the many functions of the temple, the
main function of the temple remains as a place of worship to God and
its manifestations and the holy spirits of the ancestors. This aims to be
able to provide a sense of security, comfort, and ask for prosperity and
welfare in life.
Temples as places of worship are also religious organizations, as
previously cited by Bastian (2007, in Halim and Kusufi 2014). Matters
regarding the maintenance and implementation of religious ceremonies
in the temple must be managed by a group of people, so it can be
said that there is a religious organization in the temple to support the
management of the temple itself. Therefore, religious organizations
have a key role in ensuring the smooth running of a series of activities
carried out and related to the temple itself, as well as functioning to
organize and maintain the temple.
2.4 Organizational Structure in Temples

Every organization must have an organizational structure. This
organizational structure is used as an illustration of a clear relationship
between administrators with each other, to illustrate how each element
of management is in the organization, make it easier to organize
and assign tasks and responsibilities that need to be carried out by
the management, and can function as a tool of work control. Like
organizations in general, temples also have an organizational structure.
Usually, the organizational structure in the temple is not as formal as
the organizational structure in business or government entities. Here is
one example of the organizational structure at Aditya Jaya Temple in
Jakarta.
(Source: http://adityatemple.net/)
Figure 1. Organizational Structure and Management of Aditya Jaya Temple
The management or so-called pengempon Pura Aditya Jaya
consists of the chairperson, secretary, treasurer, and several fields in
which there are several sections. Meanwhile, based on Meiningsih and
Atmadja (2020), the organizational structure at Pura Dalem Kangin
Pakraman Banyuning Village, located in Buleleng, Bali consists of
kelian banjar, treasurer (petengen), secretary (screening), pemangku,
and sections that will be assisted by young people (truna-truni).
Although it has a slightly different term, the temple’s organizational
structure is the same. The chairperson or kelian banjar oversees
giving directions, monitoring, and coordinating the implementation
of religious activities or ceremonies carried out at the temple. The
secretary or screener oversees assisting in the administration of the
temple. The treasurer or petengen is in charge of managing the temple’s
finances especially during religious ceremonies or piodalan and assists
in compiling financial statements for the temple.
Therefore, the existence of this organizational structure will make
it easier for organizations to manage and take care of temples. However,
to support good temple management, it needs to be supported by the
knowledge of administrators who are also open and familiar with
modern organizational rules, so that later the temple itself can function
beyond its general function for the people (Halim and Kusufi 2014).
However, in fact, there are many problems that occur related to the
low ability of the administrator to organize. It is due to the fact that the
views and mindset of temple administrators are still “old-fashioned”,
and it is difficult to accept novelty or progress in the organization. For
example, it is still common to find administrators who concurrently
hold positions in carrying out their duties, even though the division in
management is noticeably clear. This situation can allow fraud such
as abuse of power to corruption. Therefore, accounting science is
important to be applied in a temple organizational environment to have
proper management of temple and to develop it into a better direction.
2.5 Temple Funding Sources

The source of funds or finance obtained by the temple usually from
punia funds, sesari, and assistance from the government. The punia
fund is a noble behavior that will get tremendous rewards for someone
who does it. This fund is realized by celebrating or giving a certain
amount of money to the temple for the purpose of carrying out
religious ceremonies or for the purpose of building temples (Sastrawan
2017). The provision of punia funds must be accompanied by good,
holy, happy, and sincere feelings as a form of practicing dharma
teachings (Wati et al. 2017). Sesari used to be kepeng money, but
along with the development of the times, the money can no longer be
used and is increasingly difficult to find. Therefore, people began to
switch to using ordinary coins or banknotes as sesari. The function
of this sesari is as a symbol of the essence of karma or work (Dana
Paramitha) which symbolizes sarining manah. Sesari also serves as a
symbol of redeeming all existing shortcomings (Mahendra et al. 2017).
Generally, sesari is placed in Banten or Canang when starting prayers
at the temple.
Everyone, be it villagers around the temple or people outside the
village who worship at the temple, can give punia or sesari funds
sincerely or voluntarily. Punia fund can be in the form of material or
goods. For example, when the temple holds a piodalan or big holiday,
residents are allowed to fund punia in the form of items needed for
religious ceremonies, such as incense, busung to make canang, carpets,
and others. Then, the source of funds that have been collected will later
be used by the temple management, especially for the cost of religious
or piodalan dating activities, daily temple operational costs, costs if
repairs are made to the temple, and other interests related to the temple.
2.6 Financial Management in Temples

Financial management is an activity carried out to obtain funds and use
them to increase the value of the organization. Financial management
in religious organizations is an effort made by the management in
collecting funds from people in accordance with the provisions in
religious teachings and using the funds of these people in accordance
with the provisions in the teachings of the religion and for the benefit of
the people (Halim and Kusufi 2014). The funds provided by the people
are voluntary without any coercion and do not burden the people.
Meanwhile, the use of funds from the community must be managed
effectively and efficiently by the management of the place of worship.
The facilities used in carrying out financial management are
accounting science or financial administration (Halim and Kusufi
2014). Accounting for religious organizations is a series of activities
carried out in a structured and systematic manner related to the finances
of the organization, which is based on certain principles, standards,
and procedures aimed at obtaining actual information related to the
financial condition of the religious organization. Generally, financial
management in religious organizations is still relatively simple,
especially in temples, where administrators only record and report
cash receipts and expenditures. This is due to the fact that there are
no accounting standards that regulate good and correct financial
management (at that time) and temple administrators who do not have
an accounting background, so it is likely that they are still nonexperts
or do not understand the accounting science that needs to be applied in
temple financial management.
This simple financial management is supported by several studies,
such as Meiningsih and Atmadja (2020) which states that financial
management with the punia fund system at Pura Dalem Banyuning
Kangin has a simple mechanism based on the principle of openness.
Then, Mandarin et al. (2017) stated that Goa Giri Putri Temple has
a simple punia fund management mechanism that is transparent and
open, so that all people in the village know how to manage temple
finances through oral reporting and Letters of Accountability (SPJ)
submitted in front of the forum. Still related to financial management
in places of worship, Diviana et al. (2020) also argues that mosques
organization cannot manage their finances properly, where they only
record and report cash in and out without recording an inventory of
assets owned by mosques.
Meanwhile, Mahendra et al. (2017) presents simple financial
statements as well, with a fund management system from sesari at
Ponjok Batu Temple which goes through several stages, namely:
1. Collection. Sesari will be collected and put into sesari boxes by
the temple regents on duty that day. Then the sesari that has been
collected will be counted by the temple treasurer witnessed by the
bowler.
2. Recording. After the sesari is calculated, the number of sesari
collected will be recorded by the treasurer with simple recording.
3. Saving. It is saved at the Village Credit Institution (LPD). After
being recorded, then the sesari will be saved in LPD.
4. Reporting. The results of sesari collection will be delivered every
month at the meeting, which is held every sukra kliwon (based on
the Balinese calendar).
Based on some of these studies, reports need to explains in detai
onl how financial management in religious organizations is, or it shall
not only record the reports of cash receipts and expenditures. It is
important because this financial management reporting is a form of
accountability from the management of religious organizations for the
funds that have been obtained and used for the operation of places of
worship. This accountability is done to all people to form a credible
religious organization in the eyes of them. This can avoid any suspicion
or mistrust that could arise among the people.
2.7 Public Accountability Practices in Religious Organizations

Accountability is a critical component that must be held for an
organization because the organization needs to report and account for
the management of funds that have been received from stakeholders,
especially funders. In religious organizations, the management needs
to give accountability for the management of funds to all people as a
form of obligation that must be carried out.
According to Mardiasmo (2002), public accountability consists of
two types, namely vertical accountability, and horizontal accountability.
Vertical accountability is accountability for the management of funds to
higher authorities, such as local government accountability to the central
government. In religious organizations, this vertical accountability is
done to the organizational coach. However, according to Halim and
Kusufi (2014) vertical accountability more deeply can be said to be
accountability to God. The point is not accountability in physical form,
but rather religious teachings that teach that every human behavior will
later be accountable to God. Therefore, the management of religious
organizations has the motivation to make honest, true, and objective
accountability reports, so that it will provide inner peace.
Furthermore, horizontal accountability is accountability carried
out to the wider community, especially users or recipients of services
from religious organizations. With this horizontal accountability, there
will be trust from the community in managing religious organizations
to minimize suspicion among the community or people. Both types of
public accountability are very important for an organization, because
the accountability carried out can build the credibility of religious
organizations and can build its good image. This accountability practice
can be supported by compiling and reporting accountability reports
related to fund management carried out by management (management).
This accountability report is contained in financial statements prepared
systematically in accordance with accounting standards in accordance
with the organization’s nature or characteristics.
2.8 Accountability Practices in Financial Management in Temples

Has financial management in the temple applied the principle of
accountability? What are the accountability practices implemented
in the temple? According to Mahendra et al. (2017), the financial
management process in the temple is included in the type of vertical
and horizontal accountability. Vertically, temple builders will hold
themselves accountable to higher authorities, namely to the kelian
banjar or local traditional village leaders and local stakeholders.
Meanwhile, horizontally, temple builders carry out their responsibilities
to local indigenous peoples.
Then, according to Mandarin et al. (2017) and Meiningsih and
Atmadja (2020), Pura, in implementing accountability practices for
punia fund management has five dimensions, namely transparency,
obligation, control, responsibility, and responsiveness.
1. Transparency. In ensuring transparency, pengempon pura
provides access to local indigenous communities to find out how
the process of managing punia funds carried out by pengempon.
This form of transparency is manifested in making accountability
reports or through oral reports submitted by temple workers at the
time of paruman.
2. Obligation. Obligation describes the willingness of a person or
organization to receive rewards or punishments for all actions.
According to Meiningsih and Atmadja (2020), the punishment in
question is related to the law of karma that will be received by
individuals for good and bad actions. Good deeds will get an award
or reward in this case in the form of good karma given by Ida Sang
Hyang Widhi Wasa, as well as for deviant actions will get bad
karma as well. Then, if there are findings of misappropriation in
managing finances at the temple, then this matter will be directly
discussed at a small meeting (sabha) of the village. The results of
this small meeting can increase to paruman at the customary village
level if it cannot be accounted for by the temple builder. However,
if irregularities have been proven, the customary village leader will
sanction them in accordance with the awig-awig or local customary
village regulations (Mandarin et al. 2017).
3. Control. Control is a prefix made to analyze the accountability of
an organization. This action is carried out to find out whether an
organization has fulfilled its obligations. The concept of control
carried out by temple builders in the research of Mandarin et al.
(2017) and Meiningsih and Atmadja (2020) is through two sides,
namely internal control from village attendants or traditional village
heads (kelian banjar) and control from the community. Kelian
Banjar is indeed tasked with supervising financial management
and activities in the temple, for example such as ensuring whether
all incoming funds have been recorded in the cash book along with
funds issued or used for religious activities and adjusted to the
actual situation. Meanwhile, control of the community is carried
out by directly involving the community in the village sabha or can
be done by asking directly to the temple owner about the financial
management of the temple.
4. Responsibility. This concept focuses on an organization that is
limited by professional standards, rules, and norms. It is hoped
that with this concept of responsibility, answers can be obtained
whether an organization has followed applicable rules or standards.
In previous studies (Mandarin et al. 2017; Meiningsih and Atmadja
2020), the application of the concept of responsibility in managing
temple finances is manifested in making simple financial statements
and accountability reports (LPJ) for the implementation of a
religious activity in accordance with applicable customary rules.
That is, every matter related to the financial management of the
temple must be announced at a meeting or village association. This
concept is seen as a form of responsibility from temple managers to
indigenous peoples.
5. Responsive. This concept emphasizes the fulfillment of the
demands and needs of society by an organization. It is hoped that this
concept will be able to provide answers whether the organization
has met the expectations or requests of the community in substance.
In practice, the needs of indigenous peoples or pakraman villages
will be automatically met by managers by allocating punia funds
(donations from the community sincerely sincere) for development
needs and religious ceremonies (Mandarin et al. 2017).
Based on the explanation above, it can be concluded that in

supporting accountability practices applied in temples, generally the
management will notify or announce reports on temple cash income
and expenditure or in the form of LPJ (at the end of each particular
activity) during sabha (meeting) and paruman (musyawarah) in the
village and then will be announced again at the time of religious
ceremonies or piodalan (Agustana et al. 2017; Mahendra et al. 2017;
Mandarin et al. 2017; Meiningsih and Atmadja 2020). In addition,
announcing the temple’s financial statements can also be done by
attaching income reports and cash expenditures around the temple, so
that people who come to pray can see the results of the temple’s financial
statements. Similarly, accountability is carried out to traditional village
heads (bendesa) and pemangku, as higher authorities than temple
administrators (Mandarin et al. 2017).
Accountability carried out by temple administrators to the people
is very important, because this will function to be able to increase
transparency, credibility, and accountability of the temple management
itself, so that later it will have an impact on the increasing performance
of the temple. However, it would be better if these simple financial
statements could be upgraded or updated into financial statements whose
preparation is in accordance with accounting standards for pretend
organizations, namely accounting standards related to the preparation
of financial statements for non-profit organizations or currently referred
to as Interpretation of Financial Accounting Standards (ISAK) Number
35.
2.9 Financial Reporting of Religious Organizations
Like business entities, non-profit entities also have standards or
guidelines in preparing their financial statements. Initially, standards
regarding non-profit organizations and the preparation of financial
statements were regulated in the Statement of Financial Accounting
Standards (PSAK) 45. However, in 2019, PSAK 45 was changed
to Interpretation of Financial Accounting Standards (ISAK) 35,
which came into effect effectively on January 1, 2020. Thus, non-
profit organizations in preparing their financial statements must
be in accordance with or must be guided by ISAK 35. This aims to
provide relevant information to donors and related stakeholders and
as a medium of communication by management to stakeholders. One
example of a non-profit organization is a religious organization.
The preparation of financial statements in religious organizations
is no less important than business organizations in general. Financial
statements can be used as a form of organizational or management
accountability to donors and people around them. With the preparation
of systematic financial statements, it will bring benefits to religious
organizations themselves, such as being able to provide information
that will later be used for decision making, evaluation of activities
carried out, and facilitate budget planning for further activities and
financial control (Mahendra et al. 2017). In addition, by compiling
accountable and transparent financial statements, it will make the
surrounding people believe in the financial management of religious
organizations. Therefore, every organization is required to compile and
report its financial statements to be able to account for all activities that
have been carried out.
Detailed and systematic preparation and reporting will produce
relevant and accountable information to minimize negative public
perceptions of the organization that manages its resources. Then,
how to prepare and report proper financial statements to religious
organizations to produce accountable information? Before discussing
this topic, it is necessary to find out how the accounting cycle in non-
profit organizations is.
(Source: Halim and Kusufi 2014)
Figure 2. Accounting Cycle of Non-Profit Organizations
According to Halim and Kusufi (2014) the accounting cycle in non-

profit organizations, including religious organizations, is classified
into three stages, namely: (1) the recording stage, which consists of
activities to identify, record proof of transactions and be transferred to
the general ledger; (2) the summarization stage, namely compiling the
balance sheet, adjustment journal paragraph, working paper, closing
journal, balance sheet after closing, and reversing journal; and (3) the
reporting phase.
2.10 Financial Statements of Religious Organizations Based on

ISAK 35
The purpose of making financial statements to religious organizations
is to provide information to meet the interests of resource providers
and other parties interested in the entity. This information is related
to how the management of funds that have been given by donors,
whether they have been used effectively for operational activities in the
organization. Financial statements in religious organizations referring
to ISAK 35 (2019) related to the Presentation of Financial Statements
of Non-Profit Oriented Entities, consist of statements of financial
position, comprehensive income statements, statements of changes in
net assets, statements of cash flows, and Notes to Financial Statements
(CALK).
1. Statement of Financial Position
The statement of financial position aims to present information
related to assets, liabilities, and net assets along with information
related to the relationship between these elements at a certain time.
There are two formats in preparing a statement of financial position,
where each format has its own advantages, namely:
a. Format A provides other comprehensive income item information
separately as a component of net assets without restriction from
the resource provider. However, if other comprehensive income
is sourced from net assets with restrictions, the entity will present
such other comprehensive income information according to its
net asset class
b. Format B does not present other comprehensive income item
information separately.
2. Comprehensive Earnings Report
Aims to present the amount of surplus (deficit) and other
comprehensive income. There are two formats of comprehensive
income reports in ISAK 35, namely:
a. Format A presents information in the form of a single column.
Format A can make it easier to make comparative reports.
b. Format B presents information according to the classification of
net assets.
3. Net Asset Change Report
The report on changes in net assets provides information on
net assets without restrictions from donors and net assets with
restrictions from donors.
4. Cash Flow Statement
Present information about cash receipts and expenditures in a
period. There are two methods in preparing cash flow statements,
namely the direct method and the indirect method.
5. Notes to Financial Statements (CALK)
CALK aims to share additional information stated in the financial
statements, for example such as details related to fixed assets,
liabilities and so on.
Good financial statements are financial statements prepared by
referring to standards set by the government, namely those referring to
ISAK 35. Therefore, every religious organization is required to prepare
its financial statements in accordance with ISAK 35.
2.11 Financial Management Reporting in Temples
The existence of standards or guidelines regarding the preparation of
financial statements in religious organizations is expected to be easier
to understand, provide information on financial position for decision
making, have relevance, and have high comparability. However, the
emergence of this standard is difficult for some non-profit organizations,
especially religious organizations, to implement. This is because many
non-profit organizations lack or even do not have administrators with
accounting education backgrounds (Diviana et al. 2020).
Temples that are places of worship for Hindus are also one
example of non-profit organizations. However, due to limited human
resources (especially in temple financial management) and the thick
customs and culture that prevail, so that the preparation of temple
financial statements is only prepared simply and based on ngayah or
devotion related to service done to God.
Some previous studies (Mahendra et al. 2017; Mandarin et al.
2017; Meiningsih and Atmadja 2020), stated that the average temple has
carried out accountability practices by making and reporting financial
statements prepared by temple administrators simply, namely in the form
of cash receipt and expenditure reports and accountability reports (LPJ)
prepared at the time of a religious activity. Financial statement reporting
at this temple is based on the nature of openness and mutual trust between
temple administrators and indigenous peoples or Pakraman villages. The
following is one example of a temple income report.
(Source: Mahendra et al. 2017)
Figure 3. Ponjok Batu Temple Revenue Report 2016
Then, the ABC Temple management usually announces the LPJ
for the implementation of religious activities or piodalan during joint
prayers at the temple which are delivered orally, or by attaching LPJ
details in the temple whatsapp group. The LPJ is prepared in the form of
a cash production and energy report. This is one form of accountability
carried out by the temple management.
Table 1. Report on Cash Receipts for Galungan, Kuningan, and Piodalan Day Activities
at ABC Temple
Punia Fund
No Date Description
Money Non-Money
1 04/01/2023 Mr. XXX xxx
2 05/01/2023 Mrs. XXX xxx
3 05/01/2023 Mr. XXX xxx
4 06/01/2023 Mr. XXX xxx
5 06/01/2023 Mr. XXX Power Cord
6 08/01/2023 Mr. XXX xxx
7 09/01/2023 Mr. XXX xxx
8 09/01/2023 Mr. XXX xxx
9 09/01/2023 Mr. XXX xxx
10 09/01/2023 Mr. XXX xxx
11 09/01/2023 Mrs. XXX xxx
12 10/01/2023 Mr. XXX xxx
13 10/01/2023 Mr. XXX xxx
14 11/01/2023 Mrs. XXX xxx
15 11/01/2023 Mr. XXX xxx
16 12/01/2023 Mr. XXX xxx
17 12/01/2023 Mr. XXX xxx
18 12/01/2023 Mr. XXX xxx
19 12/01/2023 Mr. XXX xxx
20 12/01/2023 Mrs. XXX xxx
21 13/01/2023 Mr. XXX xxx
22 13/01/2023 Mr. XXX xxx
23 13/01/2023 Tempek XX xxx
24 13/01/2023 Mr. XXX xxx
25 13/01/2023 Mr. XXX xxx
26 14/01/2023 Mr. XXX xxx
27 14/01/2023 Mrs. XXX xxx
28 14/01/2023 Tempek XX xxx
29 15/01/2023 Mr. XXX xxx
30 15/01/2023 Mrs. XXX xxx
31 15/01/2023 Mr. XXX xxx
Sum xxx
Source: Author Data, 2023
Table 2. Report on Cash Expenditure of Galungan, Kuningan, and Piodalan Day
Activities at ABC Temple
No Date Description Nominal
1 04/01/2023 Pay an electrician xxx
2 04/01/2023 Buy Palm Leaves and clean up xxx
4 05/01/2023 Buy LED Lights xxx
5 05/01/2023 Buy insulation xxx
6 06/01/2023 Buy gas xxx
7 08/01/2023 Buy Cement and sand xxx
8 08/01/2023 Buy coffee and sugar xxx
9 11/01/2023 Buy wrapped rice for handypeople xxx
10 11/01/2023 Banten Galungan, Kuningan, and Piodalan xxx
11 11/01/2023 Buy palm leaves and penjor bamboo xxx
12 11/01/2023 Buy charcoal and crackles xxx
13 11/01/2023 Unloading and cast costs of holder handlers xxx
14 12/01/2023 Stove repair fee xxx
15 12/01/2023 Buy Curse Bananas xxx
16 13/01/2023 Buy a gas regulator xxx
17 14/01/2023 Buy rice xxx
19 15/01/2023 Buy mentok and duck xxx
20 15/01/2023 Buy wrapped rice for people xxx
21 16/01/2023 Temple Offal cleaning fee xxx
22 17/01/2023 Post-piodalan parking lot cleaning fee xxx
23 17/01/2023 Post-piodalan waste freight xxx
24 17/01/2023 Buy drinking water xxx
25 17/01/2023 Buy crop Xxx
Sum Xxx
Source: Author Data, 2023
3. CONCLUSION
3.1 Conclusion
Places of worship are not only used as places to perform prayers,
worship, pray, and so on. Places of worship can also be a center in
other activities, such as education, social, economic, cultural activities.
This can be achieved if the board or manager understands the concept
of a modern and developing organization and strives to work on it.
Therefore, the main function of the place of worship remains the
same, which is to serve the people who come to the place of worship.
However, the services provided are not only religious, but can develop
into services that are educational, social, and so on.
Temples as religious organizations certainly need support from
the community. The main support lies in the source of funds that
come in for temple management. The source of funds obtained is what
determines the continuity of all activities in the temple. The source
of funds given by this devotee is sincere, sincere, without expecting
any return from the temple. However, that does not mean that people
and other donors do not attach importance to the accountability of the
temple management. Thus, the management needs to account for all
its activities related to the use and management of temple funds to the
people.
There are two patterns of public accountability, namely vertical
and horizontal. Vertical accountability is by accountable for financial
management to higher authorities, in temple organizations such
as traditional villages or banjar or bendesa leaders. In addition, the
management will account for its financial management horizontally
to the wider community or people. It also aims to maintain a good
relationship between the temple management and people in the
local village and with people or donors from outside the village.
Accountability is an important point to create the credibility of temple
administrators in the community. If an organization does not perform
its obligations in the form of accountability, it can lead to suspicion or
lack of trust with the temple management. This can make it difficult for
temple administrators without incoming funding, so that all activities
in the temple will be hampered.
Good accountability can be achieved with an understanding of
accounting science. Accounting science can support temple financial
management, so that the activities to be carried out later will be more
structured and can develop and improve the performance of the temple.
The application of accounting science is also useful for obtaining
relevant and reliable information, making it easier to make decisions.
This can be applied by preparing and reporting financial statements
in accordance with ISAK 35 related to the Presentation of Financial
Statements of Non-Profit Oriented Entities.
Apart from being a provider of relevant information, systematically
prepared financial statements can be used as evaluation material for
activities carried out, a tool to control finances, and as a basis for
designing budgets for the implementation of future activities. Financial
statements according to ISAK 35 consist of statements of financial
position, comprehensive income statements, statements of changes in
net assets, statements of cash flows, and Notes to Financial Statements
(CALK).
3.2 Suggestions
Currently, there many accountability accounting practices in temples
that are carried out simply. This is due to several things, such as temple
administrators who are not from an accounting background; temple
administrators who still use the hereditary methods of the previous
management in managing and reporting their financial management;
the management still uses the principle of mutual trust, so it is felt
that it does not require professional reporting in accordance with
standards; Reporting simply is considered easy and practical compared
to reporting according to standards that seem too complicated, and so
on. However, over time and the development of the times, the temple
management will continue to experience changes or changes, so there
is a possibility of improving the quality of education in the new temple
management in the future. Later, the application of accounting science
will become a necessity for temple organizations. It can automatically
realize good public accountability and better temple development.
4. BIBLIOGRAPHY
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of Fund Sources, Transparency and Accountability of
Khayangan Tiga Temple Financial Management in Pakraman
Bondalem Village, Tejakula District, Buleleng Regency.
JIMAT (Scientific Journal of Accounting Students) Undiksha,
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Asri, N. L. S. K. 2013. Kehen Temple in Pakraman Cempaha Village,
Bangli, Bali (History of Its Structure and Function as a Source
of Historical Learning). Widya Winayata: Journal of History
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Diviana, S., R. P. Ananto, W. Andriani, R. Putra, A. Yentifa, Zahara,
and A. Siswanto. 2020. Presentation of Financial Statements
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of Public Sector Accounting. Jakarta: Salemba Empat.
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Bali: From Ritual to Political Encounter. Journal of Balinese
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Analysis of Sesari Fund Management at Pura Kahyangan
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Mandarin, I. K. S., A. T. Atmadja, and N. T. Herawati. 2017.
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System of Goa Giri Putri Temple in Pakraman Karangsari
Village, Nusa Penida District, Klungkung Regency. JIMAT
(Scientific Journal of Accounting Students) Undiksha 7 (1).
Mardiasmo, D., and A. MBA. 2002. Public sector accounting.
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Transparency of Punia Fund Management at Pura Dalem
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Teachings. Maha Widya Duta 1 (1): 54–61.
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and Accountability of Village Water Fund Management as
Additional Income at Banyuning Village Temple. JIMAT
(Scientific Journal of Accounting Students) Undiksha 7 (1).
ARTICLE 3
APPLICATION OF PSAK 109 ACCOUNTING
AT AMIL ZAKAT, INFAQ AND SADAKAH OF
MUHAMMADIYAH INSTITUTIONS (LAZISMU) IN
LUMAJANG REGENCY
By:
Alifi Tria Susanti
Ahmad Roziq
1. INTRODUCTION
1.1 Background
Indonesia is a country that has a remarkably high population capacity
to be recorded as occupying the largest population No.4 in the world.
Besides, Indonesia is recorded to embrace Islam (Muslim) the largest
in the world which provide opportunities for economic development in
the sharia sector, namely zakat. (Malik, 2021).
Zakat is a form of worship to Allah SWT, because paying zakat
is an obligation that has been decreed by religion (al-Qur’an and al-
Sunnah). Allah SWT said in QS. Al-Nur verse 3 which explains that
in the teachings of Islam, wealth and everything on earth belongs to
Allah SWT, thus He commands to give some property to the needy in
the form of Sadakah, Infaq and zakat (Hani, 2016).
The issue of zakat is not merely a giving, but also a help to
alleviate poverty which becomes a major problem in developing
countries such as Indonesia. Zakat management does not only focus on
the consumptive sector, but also the formation of long-term programs,
namely to formulate poverty alleviation so that it can lift the status
of the poor by alleviating them to poverty and difficult economic
condition. (Shahnaz, 2016).
The Law Number 23 of 2011 concerns on zakat institution
regulation issued for zakat management. The management of ZIS funds
has also been regulated in PSAK 109 which is intended for accounting
regulations for zakat, Infaq / alms which has been ratified through the
decision of the Sharia Accounting Standards Board of the Indonesian
Institute of Accountants on April 6, 2010, with the emergence of letter
No. U-290 / DSN-MUI / VIII / 2011. The purpose of the issuance of
this PSAK aims to provide uniformity related to financial management
in the form of standardization guidelines in the process of recording
transactions and financial statements that focus on zakat management
institutions, Infaq / alms. (Malik, 2021).
Regulations on zakat are also clarified by MUI fatwa Number
8 of 2011 concerning Amil zakat, MUI fatwa Number 13 of 2011
concerning zakat law on non-halal assets, MUI fatwa number 14 of
2011 concerning the distribution of zakat assets other than cash or asset
management, MUI fatwa number 15 of 2011 concerning maintenance,
distribution, and withdrawal of zakat funds.
The diversity of zakat funds makes regulators shall seriously
focus on detailing policies such as the case of a donor who gives zakat
in non-halal assets to clean or purify their property. Thus the amyl is
obliged to fulfill several things, include:
a. Zakat given must be in the form of halal property, which is seen
from the property or how it is obtained.
b. Non-halal funds cannot be the object of taxpayers.
c. The owner of non-halal property is obliged to repent and release
him from his responsibility for non-halal property.
There are several ways of repentance referred to in point c above,
including: (a) In particular, sincerely ask for God’s forgiveness to Allah
SWT, by regreting the mistake, and having strong intention so as not to
repeat the same mistake; (b) Return of illicit acquired property to its owner,
such as funds obtained from theft and corruption, but when the previous
owner of the property is not found, the funds shall be used for mutual
benefit; (c) If the property is non-lawful business property, such as property
obtained from bank interest, then the proceeds of the business must not be
used for individual purposes. It must be used for public purposes especially
allocated to non-consumptive development. (Devi Megawati, 2014).
According to Ritonga (2017) zakat is divided into two, namely
zakat nafs (soul) and zakat maal (treasure) with the following meaning:
a. Zakat Nafs (soul) or zakat fitrah aims to purify oneself. It is issued
and distributed on the Eve of Eid al-Fitr during Ramadan, which is the
1st of Shawwal, it is in the form of food which is usually in the form
of rice. b. Zakat Maal (treasure) is issued to purify property which has
fulfilled the conditions in the mandatory zakat provisions. LAZISMU is
a national legal institution oriented towards community empowerment
and utilization of ZIS funds and other philanthropic funds sourced from
private, state, and other sympathizers. Zakat institution that serves
community empowerment through the utilization of zakat, Infaq, waqf
and other philanthropic funds from individuals, institutions, companies,
and other institutions. Lazismu itself is an institution established by PP
Muhammadiyah in 2002, then continued with the inauguration of the
Minister of Religious Affairs of the Republic of Indonesia as a national
Amil zakat institution with decree Number 457/21 November 2002.
This is also supported by the enactment of Law on Zakat Number 23
of 2011, strengthened by Government Regulation Number 14 of 2014
and in the Decree of the Minister of Religious Affairs of the Republic
of Indonesia number 333 of 2015. Finally, LAZISMU was reconfirmed
through the Decree of the Minister of Religious Affairs of the Republic
of Indonesia Number 730 of 2016. The birth of LAZISMU also has
a very strong basis, it is explained that LAZISMU has a background
with two factors, namely: First, Indonesia has a condition of poverty
vulnerability that still dominates, besides that the human development
index is incredibly low, caused by weak social regulations. The second
factor is that in addition to the obligations of a Muslim, zakat is also able
to contribute and support human social development which is expected
to overcome poverty. Indonesia is the country with the largest Muslim
population which certainly has abundant resources and public interest
for zakat is very high. This enormous potential must be managed and
developed properly so that it does not cause significant problems such as
misappropriation of ZIS funds, lack of public trust in zakat institutions,
Infaq / alms, which the purpose of zakat itself cannot be achieved.
LAZISMU in Lumajang Regency is an Amil zakat organization that
focuses on empowering and also productively utilizing ZIS funds
and other social funds sourced from individuals, private companies,
state institutions and other agencies. LAZISMU (Lembaga Amil Zakat
Muhammadiyah) Lumajang has 5 priority programs that have been
realized including:
(1) Education Sector
This field focuses on educational activities including Sang Surya
scholarships, mentari, Muhammadiyah scholarship (MSPP), smart
schools Save Our School, and caring for teachers.
(2) Health Sector
It includes activities concerning health sector including Sait
Tuhuleley floating clinic, health care, Indonesia mobile clinic,
scabies-free boarding schools and balanced nutrition capacity
improvement programs.
(3) Economic Sector
This activity is engaged in economics including the empowerment
of MSMEs, rising farmers, and riasan corner.
(4) Da’wah Program (Religious Proselytizing)
It carries several activities for Da’i developmemt, namely
independent dai activities, remus masjid, da’i urban, and finally
the empowerment of muallaf. (5) Social Program
This program is engaged in the humanitarian sector with disability
empowerment programs, MSC, Indonesia Siaga, Indonesia Terang and
sanitation for the community (https://pwmu.co/195416/06/10/kiprah-
lazismu-lumajang-layaniumat).
The importance of making transparant financial statements is
usually aimed at several groups such as: a. Zakat givers or donors b.
Government sector authorized as Trustees and supervisors c. Auditors
Institutions that cooperate with lazismu d. Society. This zakat institution
is very developed, and the PSAK 109 answers the need to provide
uniformity related to the financial statements of zakat institutions.
However, in reality not all zakat institutions have implemented
financial statements in accordance with PSAK 109. It is supported by
Shahnaz (2016) entitled the application of PSAK No.109 concerning
financial reporting of zakat accounting, Infaq / alms in the baznas
of North Sulawesi province has not prepared financial statements in
accordance with PSAk No.109. From the background described above,
the author tries to analyze whether the Amil Zakat Infaq and Sadaqah
Muhammadiyah Institute (LAZISMU) in Lumajang Regency has met
the accounting standards of PSAK No. 109 in accordance with the
indicators of recognition, measurement, presentation, and disclosure.

Are the financial statements of the Muhammadiyah Amil zakat Infaq
and shadaqah institution (LAZISMU) in Lumajang Regency in
accordance with PSAK No. 109?
1.3 Purposes
This paper also aims to determine the suitability of the application of
ZIS accounting on LAZISMU with PSAK 109.
2. DISCUSSION
2.1 Research Methods
This research uses qualitative methods by describing facts related to
accounting for zakat, Infaq and shadaqah in LAZISMU, Lumajang
Regency, East Java. This research was conducted in LAZISMU,
lumajang district. The primary source of data in this study is information
provided by informants (financial staff and concerned parties at
LAZISMU) through interviews. (Susilowati &; Khofifa, 2020).
2.2 Description of Research Subject at LAZISMU Lumajang

Amil institutions must make financial statements and report as a form
of accountability to the donors. The process of preparing financial
statements on LAZISMU cannot be separated from all receipt
transactions. Receipt of funds from some of these sources must be
accompanied by evidence. LAZISMU uses receipts as proof of cash
receipts, doubled as evidence for amyl and another for archives.
LAZISMU inputs data according to the funds entered in the
financial admin and then it will be correlated with cash flow and changes
in funds, so the obligation of amyl only does it once. For LAZISMU
financial statements combine zakat, Infaq / alms so all transactions can
be called ZIS funds, so they are not made separately even though in the
details there are details of zakat incoming funds, Infaq / alms. Here are
some policies that have been implemented in LAZISMU Lumajang
district: 1. Source of ZIS Funds in LAZISMU Lumajang district
LAZISMU has several methods for classifying existing sources of
funds, there are two elements, namely internal elements, and external
elements. Because LAZISMU is still sheltered by PP Muhammadiyah,
internal sources come from branch leaders in each Muhammadiyah
sub-district. External elements consist of Muhammadiyah business
charities such as: schools, mosques, hospital health business charities,
in the economic sector there are gas stations whose remaining business
results have zakat and it is distributed in LAZISMU. Then from the
sympathizer sector there are donations from residents, Muhammadiyah
sympathizers, individuals, government schools and the community. 2.
ZIS fund raising system a. Donors come directly to the Amil office
to pick up donations according to the place determined by the donor
c. Transfer through LAZISMU account d. The promotion system for
fund associations is also actively carried out through social media. 3.
Distribution of ZIS Funds is carried out into several components that
are adjusted to existing programs. All incoming funds will be channeled
according to their respective accounts. Including social funds whose
use has been listed in the financial statements. In LAZISMU itself,
zakat is distributed to eight asnaf, Infaq is distributed flexibly according
to predetermined programs, usually classified in the educational,
economic, health, social da’wah, humanitarian and environmental
sectors. While non-halal funds are not used for consumptive needs,
they are usually used for facilities and infrastructure. Information on
non-halal funds, one of which is funds obtained from bank interest, is
usually informed by donors to Amils at the time of giving funds so that
Amils can sort out the allocation of funds received by each donor will
be used for consumptive needs or infrastructure.
2.3 Compatibility of the Application of Zakat, Infaq and Alms

Accounting in LAZISMU Lumajang Regency with PSAK
109
The results of research on how the accounting of Zakat, Infaq and Alms
in LAZISMU Lumajang Regency are in accordance with PSAK 109,
this research includes recognition of ZIS receipts using cash basis not
with accrual basic, presentation of ZIS Amil must provide a difference
between consumptive funds and non-halal funds in financial statements,
disclosure of all transactions must be transparent and disclosed as a
whole by Amil, With some of the criteria above, it can be concluded
whether LAZISMU in Lumajang Regency has met PSAK 109.
LAZISMU Lumajang Regency as an Amil has also used a system in
financial reporting related to its operational expenses. The recognition,
presentation, and disclosure of LAZISMU Lumajang Regency is in
accordance with PSAK 109 where the receipt and distribution of ZIS
funds have gone through program verification and types such as for
impossible, amyl and operational.
The following explanation will be made in the table about the
implementation of ZIS accounting treatment in LAZISMU with PSAK
109 regarding its recognition, presentation, and disclosure so that it can
be seen in detail and clearly. The data displayed is data obtained from
the author’s interview with LAZISMU, Lumajang Regency.
Table 1.1 Conformity of Acknowledgement, Presentation and Disclosure
PSAK 109
Implementation at LAZISMU Conformity
CONFESSION
Zakat receipts must use a LAZISMU recognizes zakat Appropriate
cash basis. Recognizing at the time of cash or Assets
funds when cash is received, resource persons
received, and additional reveals that if funds are received
funds are recognized when then the funds are inputted, and
cash is received. automation adds funds.
The deduction of ZIS The ZIS fund distribution Appropriate
funds to mustahik must be program at LAZISMU has
recognized as a deduction been programmed according to
of ZIS funds in accordance predetermined posts. Because
with given/channeled. LAZISMU has applied the
system, the outgoing funds
automatically reduce ZIS
funds, it can be seen in the
existing financial statements.
Infaq/alms must be divided The Infaq/alms fund at Appropriate
into Infaq/as close as LAZISMU in Lumajang
bound or not as desired by regency has been segregated
the giver of Infaq/alms. into bound and unbound Infaq/
alms accounts, and the funds
received have been recognized
as an additional fund.
Non-halal funds are LAZISMU has an account Appropriate
recognized as non- from a conventional bank, so
halal funds which in clearly LAZISMU has non-
their recording must be halal funds that have been
separated from zakat, Infaq differentiated which can be
/other alms. seen in the financial statements.
SERVING
Amil must present zakat LAZISMU has presented Appropriate
funds, Infaq/ alms that audited financial statements.
have been separated from which in it has detailed with
non-halal funds in List the nominal and
balance. transactions that have been
distinguished.
The presentation of the LAZISMU has presented Less
financial statements must financial statements that are Appropriate
be completed in five just not in accordance with
components, namely: PSAK 109. In LAZISMU,
statement of financial there are 2 components of
position, statement of financial statements, namely
changes in funds, statement the statement of financial
of changes in assets under position, the statement of
management, statement of changes in funds and the
cash flows and CALK. statement of cash flow. If
reviewed in the provisions
of PSAK 109, in this process
LAZISMU still does not meet
all existing criteria.
DISCLOSURE
All matters relating to LAZISMU has disclosed Appropriate
all transactions must be in detail all incoming
disclosed by Amil transactions, and transactions
expended with the existing
system in accordance with
cash receipts and expenditures.
Disclosure of non-halal LAZISMU has disclosed Appropriate
funds on the terms of the existence of non-halal
receipt and distribution. transactions, for its receipt and
distribution. Non-halal funds
are received from conventional
bank interest and the distribution
is used for non-consumptive
activities usually used for
development facilities and
maintenance of infrastructure.
Source: Processed data
LAZISMU has provided an overview of the transparency of its

financial statements. It has acknowledged the receipt of ZIS cash funds
as an increase in funds, and also acknowledged the reduction of funds
distributed to mustahik. Because LAZISMU already has a financial
system, it can always be seen. Thus, it can be said to be in accordance
with PSAK. In receiving zakat and Infaq, financial statements has
separated bound and unbound accounts presented separately in the
financial statement column. Therefore, in this case, LAZISMU is in
accordance with PSAK 109.
There are only three accounts in the presentation of financial
statements by LAZISMU, namely the statement of financial position,
cash flow and changes in funds. Thus, this presentation is not in
accordance with PSAK No.109. since the components of financial
statements must have CALK of Changes in assets.
Actually LAZISMU has perform maximum disclosure process,
but the absence of financial statements records makes the performance
invisible that describes the performance of Amil. The resource person
revealed that CALK LAZISMU became one with the report on changes
in funds.
3. CONCLUSION
3.1 Conclusion
ZIS funds disclosure by LAZISMU Lumajang district is received using
the cash basis method where records are only made if there has been a
cash receipt or expenditure. This statement is in accordance with PSAK
109 paragraph 09, namely the receipt of ZIS is recognized when cash
or other assets after receipt. So that some indicators on recognition in
LAZISMU can be said to be in accordance with PSAK 109.
The financial statement component, in the presentation applied in
LAZISMU is not in accordance with PSAK. In the financial statements
of PSAK 109 contain 5 components, while LAZISMU only has 3
components, namely the statement of financial position, cash flow and
statement of changes in funds. However, the source explained that non-
existent components such as CALK and asset recognition reports were
used as one in the fund change report. Reporting on LAZISMU is a
report integrated with the central LAZISMU report, so the LAZISMU
financial statement component of lumajang district cannot be changed
or added.
The disclosure of ZIS funds on LAZISMU has not been fully
stated in accordance with PSAK 109, because it is not clearly presented
in detail, and there is no inclusion of disclosure of non-amyl funds
and the performance of amyl which is usually described in CALK.
3.2 Suggestions
Thses are several sugestions related to this study, namely: 1. Financial
statements for the 2017 and 2018 periods have not been accommodated
in the financial statement program. Thus, the reports of 2021 only
presented the report of 2020. It makes the information related to
financial statements is limited. It can be used as a future evaluation,
2 There are more than one financial staffs to create some financial
controls, and to optimize financial performance, 3.to synchronize
financial statements into information systems such as websites etc., so
that financial statement transparency can be maximized and accessable
by all donors easily.
4. BIBLIOGRAPHY
Hani, U. (2016). STUDY OF PROFESSIONAL ZAKAT ACCORDING
TO DIDIN’S VIEW. PROCEEDINGS OF RESEARCH
RESULTS 2016, 466.
Ismi Darojatul Ula, M. H. (2021). THE APPLICATION OF ISAK 35
IN THE BAITUL HIDAYAH PUGER JEMBER MOSQUE.
Journal of Education, Accounting and Finance, 154.
Malik, I. S. (2021). APPLICATION OF ACCOUNTING PSAK 109
CONCERNING ACCOUNTING FOR ZAKAT, INFAQ /
ALMS AT THE CITY NATIONAL AMIL ZAKAT AGENCY
BAUBAU. Student Scientific Journal of the Faculty of Economics
UMButon, 2.
Safitri, N. Q. (2020). PUBLIC SECTOR ACCOUNTING”Change
of PSAK 45 to ISAK 35”. Cimahi: JENDERAL ACHMAD
YANI UNIVERSITY.
Shahnaz, S. (2016). APPLICATION OF PSAK NO. 109
CONCERNING FINANCIAL REPORTING OF ZAKAT
ACCOUNTING, INFAQ / ALMS AT BAZNAS NORTH
SULAWESI PROVINCE. Journal of Periodical Scientific
Efficiency, 450.
Theana, I. (2021). Analysis of the application of ISAK 35 on the
presentation of financial statements of non-profit oriented
entities at the Ar-Rasyidi Narang Baya Foundation. UIN
SUNAN GUNUNG SJATI, 1.
Tinungki1, A. N. (2014). APPLICATION OF FINANCIAL
STATEMENTS OF NON-PROFIT ORGANIZATIONS
BASED ON PSAK NO.45. EMBA Journal, 810.
Yes, T. S. (2020). The reason PSAK 45 was replaced BY SAK 35.
Medan: Medan State University.
Susilowati, L., &; Khofifa, F. (2020). Compatibility of Zakat, Infaq and
Alms Accounting with PSAK 109 BAZNAS Tulungagung
Regency. JAS (Journal of Sharia Accounting), 4(2), 162-180.
ARTICLE 4
AUDITOR EDUCATION AND FORMATION
IN THE IMPLEMENTATION OF FINANCIAL
REPORT REVIEW ON DISTRICT GOVERNMENT
OF SITUBONDO
By:
Mikaila Khalisha Dadiarto
Ririn Irmadariyani
1. INTRODUCTION
1.1 Background
The Regional Revenue and Expenditure Budget (referred to as
APBD in Bahasa Indonesia) is a Regional Government financial plan
prepared annually approved by the Regional People’s Representative
Council (RPRC). According to Law Number 23 Article 285 of 2014
concerning Regional Government, the Regional Budget is sourced
from Regional Revenue (Local Original Revenue, Transfer Revenue,
and Other Legal Regional Revenue) and Transfer Revenue (Central
Government Transfer and Inter-Regional Transfer). Preparing the
APBD will be adjusted to the needs and capabilities of the Regions to
realize the achievement of state goals. Then, no later than six months
after the budget period ends, the Regional Government is required to
present a draft Regional Regulation related to the accountability of
the implementation of the Regional Budget in the form of Financial
Statements that have been reviewed by the Financial Audit Board
(FAB). The preparation of Local Government Financial Statements
refers to Accrual-Based Government Accounting Standards (SAP).
The Local Government Financial Statements as referred to
include the Budget Realization Report (BRR), Over/Less Budget
Balance Change Report (O/LBBCR), Balance Sheet, Operational
Report (LO), Cash Flow Statement, Equity Change Report (ECR),
and Notes to Financial Statements (NtFS). Statement of Financial
Accounting Concept No.2 states that quality financial reporting
meets the requirements of reliable, relevant, comparable, cost-benefit
considerations, and characteristic materiality. The government then
summarizes the characteristics of quality financial reporting into 4
(four), namely reliable, relevant, comparable, and understandable
(Government Regulation Number 71 of 2010). A quality LGFS will
reflect good governance, transparency, and accountability. It has a
positive impact on the image of the Regional Government and increases
public trust as stakeholders.
The success of Local Government governance is certainly
inseparable from the role of the Regional Inspectorate as a Government
Agency in the field of Supervision. Today, the development of services
by the Government Internal Supervisory Apparatus (GISA) has
experienced tremendous development, even the paradigm of GISA as a
watchdog is now changing to become a consultant and catalyst (BPKP-
RI Module, 2014). Now, management no longer portrays the Auditor
profession as a figure who merely seeks errors or non-compliance
but tends to be a strategic partner and trusted advisor to the Regional
Apparatus to improve performance as stipulated in the plan and
applicable laws and regulations. This paradigm shift fosters enormous
public expectations so that in the future governance will be much more
credible, clean, responsive, and accountable. Therefore, regular, and
periodic supervision of regional apparatus, evaluation and institutional
supervision needs to be maintained.
Understanding the Internal Supervision Apparatus, the
government itself is a government agency whose formation is intended
to carry out internal supervision within the Central Government and / or
Regional Government. Within the Regional Inspectorate, supervisory
activities are carried out by Civil Servants with rights and obligations
fully given by authorized officials or referred to as Auditors. An auditor
is someone with independence, professional accuracy, and qualified
technical training to be an internal supervisor in government agencies.
Before carrying out the main duties and functions as mandated
in the provisions of the law, the Auditor must prepare an Annual
Supervision Work Program (ASWP) which is based on Government
Regulation Number 60 of 2008 concerning the Internal Control System
which is in line with the Regional Inspectorate’s Annual Work Plan.
Supervision activities referred to in PKPT include Audit, Review,
Evaluation, Monitoring, and other supervisory activities. When the
Auditor begins to carry out supervisory duties in accordance with the
existing PKPT, the Indonesian Government Internal Audit Standards
(IG-IAS) and Code of Ethics should have been understood, practiced,
and not violated for any reason.
According to Widyarini and Ratnadi (2016), the quality of the
review implementation must meet the criteria, namely if the review is
carried out collectively, then the team should understand SAP, SAPD,
the main activities of the tools reviewed, communication techniques,
database analysis, and master the basics of auditing. The study’s results
confirm that Auditors who do not have competence in accounting tend
to encounter obstacles which then impact the inadequacy of the quality
of the reviews produced. Based on this explanation, it would be more
appropriate if the Auditor is appointed by considering the suitability
of education and the type / field of review, because each review
assignment requires in-depth understanding and mastery according to
their respective fields.
One of the problems often encountered by the Regional Inspectorate
in carrying out supervisory activities to meet public expectations of
good governance and clean government is the differences in variations
in the number of auditors owned, so that the Government issued a
policy through the Decree of the Head of the Audit and Development
Agency Number: KEP-971 / K / SU / 2005 concerning Guidelines for
the Preparation of Functional Position Formation Auditor within the
Government Internal Oversight Apparatus.
Determination of the number of auditor resources is an essential
element to note because it is intended to maintain compatibility between
the existing workload and will be implemented with the availability of
completion time. The formation of the team or task force formed will
also be based on the analysis of needs and availability of resources.
Considerations in the needs analysis consist of the type and
nature of work, workload, capacity of the Auditor, principles of task
implementation, and available facilities. The success of the Regional
Inspectorate in analyzing needs, also proves that they can set priority
scales amid budget constraints and existing strategic issues and are able
to realize that wrong review planning is likely to have a tremendous
impact on the quality of review reports.
Based on the Decree of the Head of BPKP, the criteria for
determining Auditor Formation are based on the concept of Task
Force, in which each level of Auditor position has a different role, but
the number is the same in all types of supervisory implementation.
In one Task Force there are Quality Controllers (filled with Main
Expert Auditors), Technical Controllers (filled with Associate Expert
Auditors), Team Leaders (filled with Young Expert Auditors), and
Members (filled with First Expert Auditors and Skilled Auditors). The
Task Force consists of a maximum of 13 people, namely one Associate
Expert Auditor in charge of 3 Young Expert Auditors and 9 First Expert
Auditors and/or Skilled Auditors, as explained in the diagram below
Figure1.1.Task
figure Task Structure
Structure of Auditor
of Auditor Functional
Functional Position Position
FormationFormation (BPKP,
(BPKP, 2005)
2005)
In fact, most Regional Inspectorates in East Java Province are still
unable to implement
In fact, thisInspectorates
most Regional Task Forceinconcept, one
East Java of which
Province are is due
still to theto
unable
implement this Task Force concept, one of which is due to the inadequacy of existing
50 functional
Auditor Innovation and Technology
positions. for Reformation
Thus it affects on thein Public Sector Finance
imbalance BUNGA RAMPAI
of workload among
Auditors compared to the availability of implementation time as predetermined. If the
problem continues to recur, it will significantly hamper the entire Annual Supervision
inadequacy of existing Auditor functional positions. Thus it affects on
the imbalance of workload among Auditors compared to the availability
of implementation time as predetermined. If the problem continues
to recur, it will significantly hamper the entire Annual Supervision
Work Program that was established at the beginning of the relevant
year including the implementation of reviews of Local Government
Financial Statements.
Based on the description above, the author is interested to
examine this study entittled “Education and Formation of Auditors
in the Implementation of Reviews of Local Government Financial
Statements”, because education and formation of Auditors can have a
large negative impact when carrying out the main duties and functions
that have been mandated by laws and regulations.

From the introduction described above, the researcher considers the
problem formulation as follows:
1. Does the Auditor’s education affect the implementation of the
review of the Financial Statements of the Local Government of
Situbondo Regency?
2. Does the formation of the Auditor affect the implementation of the
review of the Financial Statements of the Local Government of
Situbondo Regency?
The topic of education in relation to the quality of supervision be it
Audit, Review, Evaluation, Monitoring and other Supervision Activities
is still a debate that is quite interesting even among the functional
positions of the Auditor itself. Most Auditors argue that Supervisory
Activities require an in-depth understanding of Accounting, so they
agree that the appropriate education/science in this profession is a
Bachelor of Accounting graduate.
Over time, supervisory activities not only focus on accounting
audits, but also develop towards other types of science and encourage
the Auditor profession to recruit professionals from various sciences
other than accounting. Some research references related to the effect
of education on the quality of reviews of Local Government Financial
Statements that are used as references, one of which is the Effect of
Procedures, Education, Time Pressure, and Review Budgets on the
Quality of Local Government Financial Statement Reviews by Komang
Widyarini and Ni Made Dwi Ratnadi (2016). The results of the study
show that auditors with education other than accounting experience
obstacles that affect the quality of review results. Meanwhile, previous
research that raised the variable of auditor formation (Task Force) on
the quality of reviews has not been found by researchers, so it is guided
by applicable related regulations as well as an update on topics for
accounting and auditing science in the future.
In order to answer the formulation of the problem set, the
researcher then chooses the qualitative research method of centralized
interviews with the consideration that this study aims to examine a
phenomenon and gain a deeper understanding, expected to be able to
create a theory / scientific update and limited time availability. The
interview was conducted openly and flexibly with resource persons both
Structural and Functional Officials within the Regional Inspectorate of
Situbondo Regency.
2. DISCUSSION
The discussion was elaborated to answer the formulation of the problem,
whether education and auditor formation affect the implementation of
the review of Local Government Financial Statements (LGFS). Based
on the data that has been collected from competent sources (Structural
Officers and several Auditors) and reviewed according to the
understanding of researchers and available literature, the information
we present can increase the reader’s understanding, namely:
1. The Effect of Education on the Implementation of Review of
Local Government Financial Statements
The results of the analysis show that Education has a positive effect
on the implementation of the review of Local Government Financial
Statements, as conveyed by the speakers, as follows:
“LGFS reviews can be carried out by auditors with any educational
background, but it is less than optimal if there are no accounting
graduates. In this office, there is no shortage of Accountant-educated
Auditors, so every time there is a review assignment related to LGFS
every year, it must be directly handed over to those who have more
understanding in their fields (accounting-educated auditors).” – AK (as
Structural Officer, Accounting Graduate).
“The implementation of reviews and other supervision is now not
hindered by Accounting Education alone but requires other types of
knowledge due to the many supervisory activities that require special
expertise. If asked specifically about LKP review, then the answer
must be an Auditor who comes from Accounting Education because
the specifications, objectives and outputs are clear. – SV (as Auditor,
Graduate of Accounting Science).
“There are many types of reviews depending on what your goals
are, but if we talk about Local Government Financial Statements
which concern Financial Statements, it will certainly be better done
by Auditors who are very familiar (Accounting Graduates).” – LC (as
Auditor, Law Graduate).
Based on the statements of the speakers above, the results of the
analysis are in line with the determination of theory by Locke (1975)
that any goals with certain difficulties can be achieved by certain skills
as well. In addition, the results of this analysis support Widyarini
(2016) and Supiani (2017) on the relationship between education and
LGFS review.
According to SFIS (2022), the implementation of supervision
needs to be carried out by knowledgeable inspectors so that they have
the necessary competencies when making reasonable considerations.
Thus in planning supervision, it shall appoint audit team personnel who
are competent in their fields, in addition to achieving the objectives of
the activity, namely from the Audit, there will also grow confidence in
the results of the review the supervision produced.
2. The Effect of Auditor Formation on the Implementation of
Review of Local Government Financial Statements
The results of the analysis show that the Auditor Formation has a positive
effect on the implementation of the review of the Local Government
Financial Statements, as conveyed by the speakers, as follows:
“We should indeed refer to the criteria set out in the regulation
of the Head of BPKP concerning Auditor Formation Guidelines, but
until now we have not been able to implement it due to limited human
resources and budget in this office. We have felt enough mismatch in
the workload, especially if there are Auditors who apply for leave,
so we must take a policy to share the burden with colleagues in the
region and ask for assistance across regions. Honestly, this has severely
hampered the Annual Supervisory Work Program we established at the
start of the year. It would be better. If the government provides other
alternatives to our condition.” – AK (as Structural Officer).
“The limitation in each region is that the number of auditors that
are not in accordance with the regulation makes us divide the workload
with each other. With this limited pandemic condition, it has also made
things worse. Additional tasks outside of the main tasks and functions
are piling up, making those of us who have limits in daily life feel
overwhelmed even to work overtime every day. The option we have is
only to send an oral request to the Auxiliary Inspectorate as the direct
supervisor to find additional personnel.” – SV (as Auditor).
“I feel regional, maybe other auditor friends are the same.
Unable to comment, other than that it requires more manpower to
help remember the tasks that alternate in entry and must be completed
immediately at the request of various officials both outside and inside
the Agency.” – LC (as Auditor).
Based on these statements, the Government has issued clear
regulations to ease the workload of Auditors, but in the field, they
also hope that there are other solutions that are in accordance with
the conditions in each Government Supervisory Agency, so that in the
future it needs to be considered for policymakers who read this article.
According to the researcher based on direct observations during
the interview process, the Auditor Formation that has been determined
must indeed be implemented immediately considering that it is a quiet
heavy task and needs more energy. In between the researchers conducted
brief interviews with several auditors other than the interviewees and
found that they were quite depressed with the large amount of work,
limited time with the availability of professional resources available.
3. CONCLUSION
1.1 Conclusion
As the above elaboration on the relationship of research variables, it
can be concluded that:
1. Education has a positive effect on the implementation of the review
of LGFS. The suitability of education with the type / purpose of
supervision implementation, especially review, will increase
the value of the Financial Statements made by the Regional
Government. When LGFS is of good value in front of customers
and the community, the image of the Regional Government is also
good.
2. Auditor formation has a positive effect on the implementation of
the review of the Report
Local Government Finance. The more sufficient the Auditor at the
Regional Inspectorate, the workload is evenly distributed and the entire
implementation of supervision, especially review, does not experience
significant obstacles, which means that the Auditor will carry out
the assignments better to increase the possibility of quality LGFS
supervision / review results.
4. BIBLIOGRAPHY
Financial and Development Supervision Agency. 2014. Internal Audit.
BPKP Supervision Education and Training Center: Bogor.
Audit Board of the Republic of Indonesia Regulation Year 2021
concerning DE Revision of SFIS: State Financial Inspection
Standards.
Government Regulation of the Republic of Indonesia Number 71 of
2010 concerning Government Accounting Standards.
Regulation of the Minister of Home Affairs of the Republic of Indonesia
Number 4 of 2018 concerning the Implementation of Reviews
of Accrual-Based Local Government Financial Statements.
Supiani, A. 2017. The Influence of Auditor Education, Experience, and
Professionalism
Inspectorate on the Quality of Local Government Financial Statement
Reviews. Bandar Lampung University: South Sumatra
Widyarini, K., &; Ratnadi, N.M.D. 2016. The Effect of Procedures,
Education, Time Pressure, and Review Budgets on the
Quality of Local Government Financial Statement Reviews.
E-Journal of Economics and Business, Udayana University.
5(3):455-488
ARTICLE 5
IS INDONESIAN PUBLIC SECTOR INTERNAL
AUDIT EFFECTIVE?
By:
Cici Wijayanti
Taufik Kurrohman
1. INTRODUCTION
Background
The Covid-19 pandemic is a momentum that can change the global
order of all sectors. The event that began at the end of 2019 in Wuhan,
China became the attention of the whole world.in Indonesia, in early
March 2020, the Covid-19 virus was reported to have entered through
the air, this became a momentum for change in Indonesia. Various fields
began to be affected by governance in terms of economy, social, culture,
tourism, as well as the pattern of supervision. Indonesian Minister of
Finance, Sri Mulyani in her press release said that the pandemic had
increased the burden on the state budget and had an impact on the
Government Internal Supervisory Apparatus (GISA). Internal auditors
need to increase oversight of government policies during the pandemic,
especially in managing risks in maintaining governance.
GISA must ensure that every ministerial policy is in accordance
with good governance and does not deviate to the detriment of the state.
The main objective focus is to maintain the credibility and reputation of
the Indonesian government system. Sri Mulyani said the pandemic was
a burden on the state because in 2020 the state was forced to change the
way it worked, economically, socially and widened the State Budget
(APBN) deficit for state spending. This condition forces GISA to work
extra in supervision.
Sri Mulyani quoted in Sembiring (2020) also said that in the Covid19
pandemic, the Indonesian Government Internal Auditors Association
(AAIPI) could work flexibly but did not reduce credibility. This
flexibility is not an easy thing for internal auditors, where in normal
times with good supervision and governance there is still fraud and
violations. Therefore, flexibility is a burden and challenge for GISA
to improve Indonesia’s reputation as a government and country that is
clean from fraud.
Internal auditors have a key role for the organization in achieving
goals and maintaining all assets in it. According to the International
Standards for Professional Practice of Internal Auditing (ISPPIA).
Organizations that have effective internal audits will increase
effectiveness in governance, risk management, and control processes.
In other words, the effectiveness of internal audit has a particularly vital
role in helping management fight fraud or irregularities and contribute
to accountability. The urgency is the emphasis on the internal audit
profession to be an essential management tool to gain effective control
in the organization (Alqudah et al. 2019).
The need for the internal audit function in the public sector is
increasing due to the complexity of broad objectives and diverse
expectations (Schillemans and van Twist 2016; Menza and Aga 2019;
Pilcher et al. 2013). The expectation of internal audit is that public funds
will be managed until it is safe, and the management of public sector
organizations is guaranteed the effectiveness of internal audit (Abuazza
et al. 2015; Assakaf et al. 2018). Alqudah et al. (2019) stated that the
effectiveness of internal auditors does not always achieve many goals,
where there are several factors that affect the effectiveness of internal
audits in the public sector. Some public sector organizations must have
made efforts to achieve the effectiveness of internal audit, but there are
several things that become obstacles to achieving the ineffectiveness of
internal audit.
The form of support from the Indonesian government for
effectiveness is to provide the Indonesian Government Internal Audit
Standards as stated in Decree Number KEP-005 / AAIPI / DPN /
2014 concerning the Implementation of the Indonesian Government
Internal Audit Code of Ethics, Indonesian Government Internal
Audit Standards, and Indonesian Government Internal Auditor
Peer Review Guidelines Indonesian Government Council (DPN),
AAIPI. Government Regulation (PP) No. 60 of 2008 concerning
the Government Internal Control System article 2 paragraph 1 states
that state financial management is effective, efficient, transparent,
and accountable, so the leaders of government agencies are required
to control the implementation of government activities with the
Government Internal Control System (SPIP) (Hamdi and Sari 2019).
Internal auditors who conduct effective audits mean they can
produce quality audits and meet audit standards and quality control
standards. An internal auditor must also have proper planning and
identification so that internal audit can run effectively (Sirajuddin,
2019). The operational effectiveness and performance of the audit
committee are assured by internal audit to achieve a consistent audit
function. This achievement also needs to be supported by financial
reporting and supervisory responsibilities and corporate governance
reporting (Gumulya Sonny Marcel Kusuma 2020; Miswaty 2020).
The achievement of Unqualified Opinion is a matter of pride for an
entity, which is the highest opinion on transaction reviews in financial
statements. An entity that obtains a UNQUALIFIED opinion means
that it has “clean” financial statements and is presented fairly. Data
shows that UNQUALIFIED opinion is increasing every year. In 2020,
all provincial governments have received UNQUALIFIED OPINION,
district governments by 87.7% and city governments by 93.5%.
The enormous number of governments reaching UNQUALIFIED
opinions should guarantee that there are no corrupt practices in them, but
the data presents a different. The Corruption Eradication Commission
(KPK) shows that there are still relatively many Regional Heads who
commit corruption. In 20142019 there were 126 cases of corruption
involving Regional Heads. 2018 recorded the highest cases, namely
an average of 7 cases of corruption per Regional Head. The cause of
this case is still due to the plural political practices of dynasties. Nur
(2021) in his article stated that FAB in the examination only checks the
government’s financial statement disclosure standards in accordance
with Government Accounting Standards (GAS), adequacy of disclosure,
compliance with the Law, and the effectiveness of the internal control
system. Corrupt practices should be prevented by collaborating with
GISA and FAB.
Data showing the achievement of unqualified opinion is increasing,
but not yet 100 percent. One of the factors that causes Indonesia FAB
to express a disclaimer opinion on a region’s financial statements is
the weak Internal Control System (ICS) (Rahmanti and Prastiwi 2011)
The effect of this opinion shows the declining quality of government
performance in public services. Corrective steps that can be taken are
to increase the role of internal auditors in the fraud prevention process.
According to Zelmiyanti and Anita (2015) in their research found that
internal auditors alone have no effect on fraud prevention. Other results
state that internal auditors have a major influence on fraud prevention
through the implementation of internal control systems. One of these
cases shows the importance of the role of internal auditors in improving
services to the public.
Indonesia which has an inspectorate level as an internal auditor in
the public sector which is assigned its function in the central and local
governments. The scope is not only limited to the audit function, but
also the function of fostering state financial management. The paradigm
shift in the role of internal audit and public views on accountability
of state financial management are not enough to improve services to
the public. The increasing number of corruption cases in Indonesia
indicates that the audit control function has not been optimal by GISA
(Setyaningrum and Kuntadi 2019). As stated in Government Regulation
Number 60 of 2008 article 49 paragraph 1 it is explained that GISA
consists of the Finance and Development Supervisory Agency (FDSA),
the Inspectorate General, the Provincial Inspectorate, and the District/
City Inspectorate.
The effectiveness of internal audit is a major issue for those
interested in internal audit, including audit boards and committees,
senior management, and even external auditors. According to Coetzee
and Erasmus (2017), the effectiveness of the internal audit function can
improve performance in the public sector. The effectiveness of internal
audit will always be a relevant issue because the role of internal audit of
organizations is considered important in the field of governance and this
topic is still a new area of research in the scope of internal audit especially
in developing countries. Another important reason is that previous
researchers have not found the influencing factors or the best framework
for the effectiveness of internal audit (Endaya and Hanefah 2016).
The development of internal auditors is strongly influenced by the
development of the entities they face. However, the effectiveness
of its audit implementation in public sector organizations remains a
challenge. So that the formulation of the problem in this paper is what
is the condition of the effectiveness of internal audit in the public sector
in Indonesia?
2. DISCUSSION
2.1 Internal Audit of Indonesia’s Public Sector
Before understanding the Indonesian internal auditor, it is necessary
to first know the function of the public sector internal auditor in the
Indonesian government. Minister of State-Owned Enterprises (BUMN),
Erick Thohir, in the MoU on preventing corrupt practices within
SOEs, said that Indonesia continues to encourage the strengthening
and improvement of good governance. The basis for this support is
the assessment of the GISA capability level of the Ministry of SOEs
with the Internal Auditor Capbility Model (IACM) criteria from FDSA
with an increase every year for the last 4 years. The development and
strengthening of good governance have become a commitment of all
ministries in cooperation with FDSA. The Head of FDSA, Muhammad
Yusuf Ateh, also stated that FDSA has a commitment to overseeing
the environmental accountability of SOEs and their companies. The
achievements made by FDSA during 2020 are supervision of 108
SOEs and subsidiaries, collaboration with SPI in escorting cash social
assistance, and conducting Good Corporate Governance assessments
for SOEs and 28 subsidiaries (Afriyadi 2021).
Audit is a form of government responsibility in using public
funds. Politically, public sector audits encourage transparency in the
use of public funds, so they are considered institutions that legitimize
or delegitimize political power at a certain period. Law Number 15
of 2004 in article 4 paragraph 1 states that financial audits consist of
financial examinations, performance checks, and examinations with
specific objectives. Public sector audits in Indonesia are also known as
state financial audits. Article 9 paragraph 1 states that “In conducting
an examination of state financial management and responsibility, FAB
may utilize the results of the examination of the government’s internal
control apparatus”, continued in article 2 states that “For the purposes
referred to in paragraph 1, the report on the results of the government’s
internal examination must be submitted to the FAB.”
The apparatus referred to by the government’s internal monitoring
is GISA. Internal supervision is all audit, review, evaluation, monitoring,
and other supervisory activities on the implementation of the duties and
functions of the organization in providing adequate assurance that activities
have been carried out in accordance with established standards effectively
and efficiently in realizing good governance. Government Regulation
Number 60 of 2008 article 49 paragraph 1 states that GISA consists of:
1. FDSA, which is the government’s internal supervision apparatus
that reports directly to the president.
2. General Inspectorate, which is the government’s internal supervision
apparatus that reports directly to the Minister or the head of the
institution.
3. Provincial Inspectorate, which is the government’s internal
supervision apparatus directly responsible to the governor.
4. District / City Inspectorate, which is the government’s internal
supervision apparatus that reports directly to the regent / mayor.
FAB as the government’s external auditor certainly needs to
synergize with GISA as an effort to check and test to find out if there are
irregularities in the implementation and management of state finances
(Kuntadi 2019).
Internal auditors in the public sector in Indonesia also need to
be applied in organizations other than government. President Director
of the Health Social Security Administration Agency (BPJS), Ali
Ghufron Mukti, revealed the importance of the role of the Hospital
Internal Personnel Unit (SPI RS) with the aim of the sustainability of
the National Health Insurance Program-Healthy Indonesia Card (JKN-
KIS). Loss prevention of the Health Social Security Fund (DJS) is
expected to be implemented by SPI RS. The active role of SPI RAS is
sought to run effectively and efficiently in fraud detection. SPI RS can
encourage and ensure that the services provided by BPJS Kesehatan
meet the quality standards set to increase participant satisfaction and
patient safety (CNBC, 2021).
The implementation of effective internal control and risk management
by SPI RS is also expected to support good governance, ensure the
rights and obligations of the cooperation agreement between the
Hospital and BPJS Kesehatan, as well as compliance with applicable
rules and regulations. Government Regulation Number 82 of 2018
BPJS is secured to build a fraud prevention system that is carried out in
a systematic, structured, and comprehensive manner.
Reviewing from the different view of the government, internal
audit is needed to achieve public trust in the distribution of funds,
especially in the use and State Budget (APBN) taken from tax and non-
tax sources. All state revenues should be responsible to the public for
their proper use. Sri Mulyani also hopes that AAIPI can carry out risk
management so that it can avoid violations in government institutions.
This statement underlies that in fact, assessing and building a good
reputation and public trust in government institutions is exceedingly
difficult (Sembiring 2020).
Sri Mulyani also continued that the destruction of public trust was
mainly caused by fraud such as corruption. State officials who commit
corruption are the beginning of damage to the government’s reputation,
which also impacts the sacrifices and efforts taken in building it is
lost. From here the role of AAIPI is needed and needs to be improved
in performance to maintain public trust. AAIPI is a professional
organization consisting of individuals and GISA work unions that
have met the membership requirements. AAIPI was established on
November 30, 2012, through a plenary meeting of the establishment of
AAIPI at Gandhi Hall of FDSA East Jakarta Office.
2.2 Internal Auditor Effectiveness

The level of success of the organization in achieving the goals that
have been set previously is the definition of the word effectiveness.
Effectiveness of assessment is based on the extent to which
organizational goals are achieved and relates to the organization’s
goals. When related, the effectiveness of internal audit is the ability
of internal auditors to realize the internal audit function itself (Hamdi
and Sari 2019). In short, effectiveness can be interpreted as the level
of success of the company in achieving its goals. One indicator of
effectiveness measurement is the achievement of predetermined goals
and producing benefits. Sirajuddin and Ravember (2020) in their
article stated that internal audit effectiveness indicators are guided by
applicable audit standards, proper planning and clear identification,
assessment of auditor ability, and assessment of auditor ability to find
errors.
The effectiveness of internal audit can be affected by several
factors. An organization certainly expects the effectiveness of internal
audit in practice, so here it needs reliable researchers in their fields. The
author collects several research articles from Indonesia and abroad. The
research shows that there are many factors that affect the effectiveness
of internal audits but still pay attention to each organization’s condition.
One is the organization’s policy under consideration so that one factor
under study does not have a significant influence.
2.3 Factors Affecting the Effectiveness of Internal Auditors

The following explanation shows that research can provide insight into
internal audit effectiveness in an organization. Factors that may have
a significant influence can be evaluated to improve internal audits’
effectiveness. Previous studies have cited many variables that can affect
the effectiveness of internal audits, but these results have remained
inconsistent. Independence is a trait that needs to be possessed by
internal auditors. Auditor independence is the action of an auditor who
is firm and has no interest in other parties. Previous researchers have
cited the variable of independence as a key factor in determining an
effective internal audit. Dellai and Omri (2016) show that effective
internal audit is influenced by the independence of internal audit,
internal auditor objectivity, internal audit management support, the use
of the internal audit function as a management training ground, and the
organizational sector itself. In contrast to Setyaningrum and Kuntadi
(2019) which shows that independence does not affect the effectiveness
of internal audits. Researchers state that independence require auditors
to be independent. The results of influential but insignificant research
related to independence on the effectiveness of internal audit were also
conducted by Rudhani et al. (2017) in the Kosovo public sector.
The effectiveness of internal audits can be influenced by
organizational culture, even having a role in audit assignments.
According to Nurhidayati (2020), organizational culture is often not
considered in audit assignments. Organizational culture should be
used to determine the decision-making process, problem solving, and
communication in the organization. Organizations that have a culture
will provide instructions on how their members should act. Kusuma
(2020) shows that organizational culture does not affect the effectiveness
of internal audits, because auditors have standard procedures or rules
in the distribution of tasks.
Another variable is integrity, which affects the effectiveness
of internal audits and is a key factor. The Association of Indonesian
Government Internal Auditors (AAIPI) states that integrity is a quality,
trait, or condition that shows complete unity so that it has the potential
and ability to radiate authority and honesty. Prihartono et al. (2019)
show that internal auditors do not have awareness regarding the
importance of integrity in the implementation of internal audits, so the
results of their research show that they do not have a positive influence.
It is contrary to Yanti and Permatasari (2020) which shows a positive
relationship between the integrity and effectiveness of internal audits.
Competency variables are important in realizing the effectiveness
of internal audits. Dellai and Omri (2016) show that competence of
internal auditors does not affect the effectiveness of internal audit
because auditors with CIA certification in Tunisian organizations are
still very minimal when compared to organizations in Europe and
America. In contrast to Sirajuddin and Ravember (2020) which results
in competence having a positive effect on the effectiveness of internal
audits. Furthermore, Alqudah et al. (2019) states that the empowerment
variable moderated by task complexity has no effect on the effectiveness
of internal audit so that these variables are not involved in this study.
2.4 Independence, Organizational Culture, Integrity, Competence,
and Cooperation of External Auditors Improve the Effectiveness
of Internal Audit in Indonesia’s Public Sector
Some of the articles that the author has collected can be a consideration
for an organization whether it has practiced the effectiveness of internal
auditing. At least five points that can influence the effectiveness of
internal audit in the government. The five points include:
1. Independence. This factor can be seen and assessed from nine items
with research sources by Alqudah et al. (2019), including whether
internal auditors are independent enough to carry out their professional
commitments and responsibilities; whether the head of internal audit
reports to the organizational level in fulfillment of his responsibilities;
whether the head of internal audit deals directly with the Minister or
the president or with the general management; whether the internal
audit department has relationships with top management other than the
financial manager; whether conflicts of interest in the work of internal
auditors are rare; whether internal auditors rarely face intervention while
performing their work; whether internal audit staff have unrestricted
access to all employees and departments in the organization; whether
the Board of Directors approves the appointment and replacement
of the Head of Internal Audit; and whether internal auditors do not
perform non-audit functions.
2. Organizational culture. Kusuma (2020) states that the assessment of
organizational culture factors comes from how the learning process
in government, including company mission, leader behavior, and
motivation.
3. Integrity. In accordance with the code of ethics issued by AAIPI that
integrity is the quality, nature, or state of internal audit that shows
complete unity so as to provide confidence in its consideration.
This factor can be assessed by the level of honesty, responsibility,
compliance with regulations/codes of ethics, and respect and
contribution to government goals.
4. Competence. Dellai and Omri (2016) show assessment of internal
audit competence with four points, namely experience, education,
certification, and training. Experience is seen from the average
number of years of experience as an audit staff. Education is
seen from the average length of undergraduate and postgraduate
education. Certification is seen from the percentage of internal
auditors with one or more internal audit certificates. Training is
seen from the annual training hours of each internal auditor.
5. Cooperation of external auditors. This factor can be assessed and
measured by nine items from Alqudah et al. (2019), including
whether external auditors have a good attitude towards the internal
audit department; whether external auditors support and assist;
whether the external auditor gives the internal audit department the
opportunity to explain its difficulties; whether external and internal
auditors always discuss the working time of interest; whether
the external auditor discusses the plan with the internal audit
department; whether external auditors rely on internal audit reports;
whether internal and external auditors gather regularly; whether top
management assists in improving the cooperation of internal and
external auditors; and whether external auditors distribute working
papers to the internal audit department.
3. CONCLUSION
1.1 Conclusion
The condition of Indonesia, especially the scope of government, still
does not fully give confidence to the public. Such trust can be built
from a good reputation by the government. The public who has given
the mandate to the government to manage funds really expect the
proper use of funds, one of which is with financial statements that are
“clean” from fraud. This evidence can be seen whether the results of
financial reporting get UNQUALIFIED opinions or not, where the data
proves that still not one hundred percent of every level of government
gets these opinions.
In addition to having a credible accountant in making financial
statements, the government needs to pay attention to the quality of
performance of GISA, namely the internal financial audit apparatus.
The success of an effective GISA is highly expected by the public by
paying attention to what factors affect the effectiveness of public sector
internal audits. Research conducted in Indonesia provides a basis that
it is important for the central government to pay attention to at least
five points, including independence, organizational culture, integrity,
competence, and cooperation of external auditors.
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ARTICLE 6
UNIVERSITY ACCRUAL ACCOUNTING IN
INDONESIA
By:
Ditio Adi Surya Wijaya Hadi
Siti Maria Wardayati
Isti Fadah
Michael Chandra Gunawan
1. INTRODUCTION
1.1 Background
In recent years, the process of adopting accrual accounting has become
increasingly widespread among public sector organizations in some
developed countries. The introduction of accrual accounting into the
public sector was one of the main innovations issued. Accrual accounting
is essential in addressing the lack of information available to public
sector organisations regarding the cost and value of their assets (Scott,
1990). Indonesia has implemented a process of changing its accounting
procedures. This study, attempting to examine the impact of accrual
accounting on Indonesia’s public sector, by analyzing the choices made
by some Indonesian universities that have adopted accrual accounting
and more precisely the choices made by some Indonesian universities
in the way they define accounting standards.
Accrual accounting is expected to improve accountability, financial
transparency and efficiency of public organizations (Christiaens, 2008;
Ezzamel, 2005). In the next few years, accounting standards will be
criticized in a growing literature, especially with regard to matters
involving the recognition and valuation of certain items including the
absence of accrual accounting standards for certain assets and liabilities
typical of the public sector, as well as many organizational problems
in the public environment such as the need for cultural change, high
resistance to change and a general lack of accounting skills.
The perspective addopted by this study is that the higher education
system is only part of the public sector. Almost every country especially
Indonesia due to some features in the Indonesian higher education
system, public and private universities can be compared with other
public sector organizations. Almost every issue about universities in
Indonesia is regulated through Government Regulation Number 23 of
2005 concerning Financial Management of Public Service Agencies
and applies to public universities. Regardless of the state of theoretical
autonomy, universities must comply with accounting rules established
by the state; Their teaching and research activities are strictly regulated
by the Education Office, and they are accountable to the finance minister
for all their financial activities. As many other public organizations
will introduce accrual accounting over the next few years, the study
sheds light on technical considerations when making changes. It is also
important to investigate the issue with respect about the role of IPSAS
in promoting full accrual accounting in the public sector (Grossi, 2011;
Christiaens, 2010; Benito, 2007). In other countries where accrual
accounting is applied in the public sector some problems of compliance
of accounting in the public sector with full accrual accounting principles
are rather poor (Christiaens, 2003).
An additional objective of this research is the role of International
Public Sector Accounting Standards (IPSAS) in helping to address
public sector recognition and assessment issues particularly for the
case being examined. Although there is no specific accrual accounting
standard for universities, IPSAS is the best choice to ensure that
accrual accounting is used effectively in the public sector (Paulsson,
2006). Accruals are accounting entries for expenses or income for
which payments have not been received. Accruals have an influence
on a company’s net income in the income statement that can be used
for various financial operations, such as accounts receivable, payable,
and payroll. Accrual accounting entries include any kind of income
earned but has not beenrecorded in the books, as well as any expenses
or liabilities incurred but has not been recorded. It is important to
understand what makes accruals in accounting in order to understand
this particular method.
Adjustments that must be made before the company’s financial
statements informed are referred to as accruals. It includes expenses,
losses, and liabilities that have occurred but have not been recorded in
the account, as well as income and assets that have been acquired but
have not been recorded. As a result, the purpose of accrual accounting
is to match income and expenses to the time period in which they occur
(the matching principle), rather than the time of the actual cash flows
associated with them. Accruals are used to indicate the underlying
economic reality of the transaction. This is a particularly profitable
strategy in companies with high volumes of credit transactions, such
as when goods and services are sold on credit rather than cash. Accrual
accounting is recorded into two categories: income (receivables) and
expenses (payables).
International Public Sector Accounting Standards (IPSAS) are
accounting standards issued by the IPSAS Board for use by public
sector entities worldwide in the preparation of financial statements.
This standard is based on International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board
(IASB). IPSAS aims to improve the quality of general purpose financial
reporting by public sector entities, leading to better assessment of
resource allocation decisions made by governments, thereby increasing
transparency and accountability.
IPSAS is an accounting standard to be applied by national
governments, regional governments (e.g. states, provinces, territories),
local governments (e.g. cities) and related government entities (e.g.
agencies, boards and commissions). IPSAS standards are widely
used by intergovernmental organizations or agencies. IPSAS does
not apply to government-owned enterprises. IPSAS is issued by
IPSASB (International Public Sector Accounting Standards Board), an
independent organ of IFAC (International Federation of Accountants).
IPSASB adopts a due process for IPSAS development that provides
an opportunity for comment by interested parties including auditors,
drafters (including finance ministries), standard-setters, and individuals.
IPSASB meetings to discuss developments and approve the publication
of IPSAS or other papers are open to the public.
IPSAS is based on International Financial Reporting Standards
(IFRS), formerly known as IAS. IFRS is issued by the International
Accounting Standards Board (IASB). IPSASB adapts IFRS to public
sector contexts when necessary. In conducting that process, IPSASB
makes every effort to maintain the accounting treatment and original
text of IFRS unless there are significant public sector issues that require
departure.
Financial statements are a summary of financial transactions that
are prepared periodically and occur during the relevant financial year
and describe the capabilities of the company. According to the Statement
of Financial Accounting Standards (PSAK) No. 01 of 2015, financial
statements are a structured presentation of the financial position and
financial performance of an entity. This report displays the history of
the entity quantified in monetary value, providing information about
the financial performance, cash flow of the entity, and financial position
that can be useful to users of the report in making economic decisions
that are the purpose of the financial statements.
The Public Sector usually consists of organizations that are
owned and operated by the government and exist to provide services
for its citizens. Similar to the voluntary sector, organizations in the
public sector do not seek to make a profit. Funding for public services
is typically obtained through a variety of methods, including taxes,
fees, and through financial transfers from other levels of government
(e.g. from federal to provincial or state governments).
Different governments from around the world may use their own
unique funding methods for public services. Sometimes the public
sector will work together with organizations in the private sector to
create public-private partnerships. These hybrid organisations (named
P3) work together to jointly deliver services or business ventures to
communities (see examples). Through the outsourcing process, public
sector organizations will often engage private companies to deliver
goods and services to their citizens.
In the perspective of accrual accounting, “student fees” can
theoretically, be referred to as “income from services”, because it is
the money that students pay to receive certain services (among them:
teaching, research). However, due to the specific problems of the college
system, the definition is somewhat limited. For example, the fiscal year
(f.y.) does not coincide with the academic year (a.y.) in the college
system. This leads to problems in terms of how revenue is registered.
Even the possibility of determining the correct proportion of income
to be allocated as income for a given year will be difficult, especially
when the cost (for one a.y.) is divided into two (or more) parts that are
not directly proportional to the relative period it covers in different
financial years. Student fee enrollment is further complicated by the
fact that the exact amount for each student is generally unknown when
the student enrolls, as some administrative operations still need to be
completed (such as establishing social subsidies and fee reductions for
the neediest students).
Research funds are resources obtained by universities from public
and private bodies to carry out pure and/or applied research. These
research funds can include: research grants, projects. In the perspective
of accrual accounting, these funds can be registered as payments given
to universities in exchange for research work. Until now, there has been
no specific accounting standard that discusses it, because it is generally
only present in the context of universities and research. However, the
account can be compared to a long-term project and listed as a “work
in progress”. There are two methods for recording work in progress:
the completed contract method (which calculates revenue only when
the entire project is completed) and the percentage completion method
(which calculates revenue progressively in relation to the progress status
of the project). While both methods belong to accrual accounting, the
second is more consistent for full accrual accounting, and the quality
of the information provided is higher, since the revenues generated
through the research project are allocated in the correct proportion for
each financial year of the project.
Capital grant is a term used to define resources provided by the
State (or other public authority) to universities for the purpose of
constructing, expanding or restructuring buildings. Similarly to research
funding, the recognition and valuation of capital grants is problematic
because these types of transactions are primarily encountered in the
public sector. In the context of accrual accounting, capital grants can
be measured by two methods: the income method (capital grants are
recorded incrementally as income) and the equity method (capital grants
are allocated to specific reserves as part of equity). The income method
is more consistent with full accrual accounting and provides better
information, as grants contribute progressively to the determination of
income until the asset (i.e. the building to which the capital grant relates)
is fully depreciated. In contrast, the equity method is less transparent,
as it inflates the balance sheet. Indeed, equity permanently increases
with the amount of grants and assets capitalized in the balance sheet
without amortization.
Library inheritance refers to the entire heritage of books, journals,
manuals, magazines, magazines, etc. Books and manuals that have
special historical and/or artistic value are not part of this category
and belong to a special class. According to the rules of full accrual
accounting, the value of the library’s inheritance must be recorded as
an asset on the balance sheet. However, due to its special arrangement,
universities (and public organizations in general) find it difficult to list
it as a normal asset. Universities in general may not track the stock and
value of this inheritance in full (for example, many books are loaned
to students and professors who may lose or damage them, reducing
the overall value of the inheritance). On the other hand, it seems
that the cost of monitoring them in real-time is prohibitive and the
management of such a system would be very complicated. To avoid
these technical problems, library inheritance can be recorded using
either the annual fee method or the equity method. In the first case, the
annual purchase value of the library is recorded as an expense in the
income statement, whereas, in the second case, the inheritance value of
the library is recorded as an asset but without charging any amortization
(and the corresponding value is registered to equity). Neither method
is completely consistent with full accrual accounting, as neither has
transparency about the true value of these assets. However, the first
method (listing items as annual fees) is the least consistent.
The term “artistic heritage and collection” refers to all objects of
historical and/or artistic value, such as paintings, sculptures, manuscripts,
rare documents, etc. In universities and public organizations in general,
there is such a rich heritage. The registration and assessment of these
art treasures is quite challenging, as universities usually do not have
adequate information about the true value of their heritage. In addition,
the value of such assets tends to increase over time. Inheritances can
be registered in two ways, both methods consistent with full accrual
accounting, using either the equity method (goods are recorded as
assets and their value is recorded as special reserves in equity) or the
income method (items are listed as assets, with the corresponding value
considered income).
Universities that have not recorded these items in the financial
statements will include information about inheritance in records on
accounts. This method is less consistent with full accrual accounting,
since the balance sheet will not contain data on its artistic heritage
and the overall quality of its information will decrease. This research
deals with the question of how some universities in Indonesia have
addressed some recognition and valuation issues, pursuing the idea that
these technical accounting problems hinder accrual accounting from
spreading throughout the public sector so that the research theme is
“University Accrual Accounting in Indonesia”.

From the description contained in the introduction, the researcher
found the problem of how universities use their transaction approach
to apply accrual accounting rules?
2. DISCUSSION
The analysis is conducted on the choices made by universities in
determining the following five (5) accounting principles: student fees,
research funds, capital grants, library inheritance, and art inheritance
and collections. These principles of accounting refer to the registration
of accounts in the higher education system that cannot be precisely
compared with similar accounts in private enterprises. Therefore,
such accounts do not fully conform to accrual accounting principles
generally adopted by private companies. Accrual accounting should be
productively expanded across the public sector. Table 1 contains the
List of PT revenues in 2020 and Table 2 contains the List of Universities
with Accrual Account Relationships.
Table 1. College Revenue List in 2020
University Possession 2020 Revenue Location

(in millions of rupiah)
University of Indonesia (I) Public 2.751.247 Jakarta
Gajah Mada University (II) Public 1.780.290 Yogyakarta
Brawijaya University (III) Public 1.411.413 Malang
Diponegoro University (IV) Public 1.158.402 Semarang
Airlangga University (V) Public 1.360.206 Surabaya
Padjajaran University (VI) Public 1.187.202 Bandung
Table 2. List of Universities with Accrual Account Relationship
Principles of How to Register Relationship Unv Unv Unv Unv Unv Unv
Accountancy with accrual (I) (II) (III) (IV) (V) (VI)
accounts
Student fees Cash Based Low X X X X
Accrual-Based High X X
Funds Method Contract Low X X
Research Finish
Method High X X X X
Percentage
Settlement
C a p i t a l Equity Method Low
Grants
Revenue Method High X X X X X X
Inheritance Note as an Low X X X
Library annual fee
Method Equity Intermediate X X X
Intermediate
Assets that High
should be
Amortized
H e r i t a g e Value through Low
and artistic Note
collections
Equity method High X X X X X X
2.1 Student Fees
In the perspective of accrual accounting, the student’s fee is,
theoretically, “income from services”, since this is the money that
students pay to receive certain services (namely: teaching, research).
However, due to the problems that are specific to the college system,
this definition is somewhat limited. For example, the fiscal year (f.y.)
does not coincide with the academic year (a.y.) in the college system.
This leads to problems in terms of how these revenues are registered.
It may not even be possible to determine the correct proportion of
this income that should be allocated as income for a given year. This
problem, in particular, occurs when the cost (for one a.y.) is divided
into two (or more) parts that are not directly proportional to the relative
period it covers, for different financial years. Student fee enrollment is
further complicated by the fact that the exact amount for each student
is generally unknown when the student enrolls, as some administrative
operations still need to be completed (such as establishing social
subsidies and fee reductions for the neediest students).
Given those technicalities, some universities may opt for
cash-based enrollment and record student fees only when financial
transactions actually occur. This method avoids some problems related
to the registration of student fees, but the quality of the information
provided is lower, since the income statement will not show what
proportion of income for a particular financial year is. The comparison
shows that there is a strong tendency among universities to use cash-
based systems. Four universities (UGM, UB, UNDIP, UNPAD) use
cash-based accounting principles and the other two UI and UNAIR use
full accrual principles.
In theory, two different IPSAS can determine and regulate
university revenue: IPSAS 9 (income from exchange transactions) and
IPSAS 23 (income from non-exchange transactions). The difference
between these two standards depends on the type of transaction. In
accordance with IPSAS 9, there is equality in transactions (equal value
of money and services exchanged, i.e. students pay to receive services);
while according to IPSAS 23 there are non-exchange transactions
because the value of services provided (for example teaching and / or
research) is not comparable to the money paid by students. While so
far there has been no unanimous opinion on which standard can best
regulate student fees, the trend of using cash-based systems is clearly
not in line with the two IPSAS directives.
2.2 Research Fund

Research funds are resources obtained by universities from public and
private bodies to carry out pure and/or applied research. It can be a
research grant, project, research grant, etc. In the perspective of accrual
accounting, this occurrence can be registered as payment given to the
university in exchange for research work. Until now, there has been no
specific accounting standard that discusses it, because it is generally
only present in the context of universities and research. However, they
can be compared to long-term projects and listed as “work in progress”.
There are two methods for recording work in progress: the completed
contract method (which calculates revenue only when the entire project
is completed) and the percentage completion method (which calculates
revenue progressively in relation to the progress status of the project).
While both methods belong to accrual accounting, the second is more
consistent for full accrual accounting, and the quality of the information
provided is higher, since the revenues generated through the research
project are allocated in the correct proportion for each financial year
of the project. The comparison shows that some universities use the
completion percentage method criterion to apply for research funding.
At the international level, IPSAS 11 (construction contracts),
which are based on IAS 11, shows that the percentage completion
method is the best. Therefore, the selection using the percentage of
completeness method carried out by some universities is also coherent
with IPSAS.
2.3 Capital Grants

Capital grant is a term used to define resources provided by the State (or
other public authority) to universities for the purpose of constructing,
expanding or restructuring buildings. Similarly to research funding, the
recognition and valuation of capital grants is problematic because these
types of transactions are primarily encountered in the public sector.
In the context of accrual accounting, capital grants can be measured
by two methods: the income method (capital grants are recorded
incrementally as income) and the equity method (capital grants are
allocated to specific reserves as part of equity). The income method
is more consistent with full accrual accounting and provides better
information, as grants contribute progressively to the determination of
income until the asset (i.e. the building to which the capital grant relates)
is fully depreciated. In contrast, the equity method is less transparent,
as it inflates the balance sheet. Indeed, equity permanently increases
with the amount of grants and assets capitalized in the balance sheet
without amortization.
Through comparative analysis, it can be concluded that
universities use the same accounting principles that all use the income
method. Capital grants can be arranged through IPSAS 23 (income
from non-exchange transactions) because there is no real exchange of
transactions (the organization does not produce services for the money
it receives). In this case, the reference to IPSAS 23 is clear and, in
general, the method of income can be used.
2.4 Heritage Library

Library inheritance refers to the entire heritage of books, journals,
manuals, magazines, etc. Books and manuals that have special historical
and/or artistic value are not part of this category and belong to a special
class. Full accrual accounting rules, the value of the library’s inheritance
must be recorded as an asset on the balance sheet. However, due to its
special arrangement, universities (and public organizations in general)
find it difficult to list it as a normal asset. Universities in general may
not track the stock and value of this heritage in full (for example, many
books are loaned to students which could possibly be lost or damaged
thus reducing the overall value of the inheritance). In other positions, it
seems that the cost of monitoring them in real-time is prohibitive and
the management of such a system would be very complicated. To avoid
these technical problems, library inheritance can be recorded using
either the annual fee method or the equity method. In the first case, the
annual purchase value of the library is recorded as an expense in the
income statement, whereas, in the second case, the inheritance value of
the library is recorded as an asset but without charging any amortization
(and the corresponding value is registered to equity). Neither method
is completely consistent with full accrual accounting, as neither has
transparency about the true value of these assets. However, the first
method (listing items as annual fees) is the least consistent.
Through comparative analysis, it can be seen that universities use
two different methods to register their library heritage. UB, UNDIP,
and UNPAD list these items as annual expenses, but only new library
purchases are recorded and universities do not show the value of their
entire library heritage on their balance sheets. UI, UGM, and UNAIR
use the equity method. In this case, there is no IPSAS that expressly
handles library inheritance, so there are no reference guidelines that
can be used to deal with this technical accounting problem. The reason
why there is no proper standard can be explained by the fact that library
heritage is a very specific item in higher education and research systems
and IPSAS are developed for a common public context.
2.5 Heritage of Artistic Collection

The term “artistic heritage and collection” refers to all objects of
historical and/or artistic value, such as paintings, sculptures, manuscripts,
rare documents, etc. Within universities and public organizations in
general, there is such a rich heritage. The registration and assessment
of these art treasures is quite challenging, as universities usually do
not have adequate information about the true value of their heritage.
In addition, the value of such assets tends to increase over time. Given
these technical issues, this inheritance can be registered in two ways,
both methods consistent with full accrual accounting, using either the
equity method (goods are recorded as assets and their value is recorded
as special reserves in equity) or the income method (items are listed
as assets, with the corresponding value considered income). A further
possibility is that universities do not record items in their financial
statements, but include information about them in the top notes of
accounts. This method is less consistent with full accrual accounting,
since the balance sheet will not contain data on its artistic heritage
and the overall quality of its information will decrease. Universities
use different accounting principles to register their artistic heritage. All
universities use the equity method.
Controversies surrounding how to evaluate and represent heritage
have also been subject to international debate. According to IPSAS
17 (property, plant and equipment), organizations are not required to
disclose their inherited assets, and problems arise when organizations
want to value those assets. It means that the primary way in which the
value of these assets can be measured consists of looking at the future
economic benefits derived from the asset or the potential services it can
produce. However, while IPSAS 17 gives universities the option not to
disclose these assets on their balance sheets, the practice is inconsistent
with full accrual accounting.
2.6 Analysis Results

The university does not fully comply with the principles of full accrual
accounting. In the specific cases analyzed, the situation is quite variable
and universities follow different accounting standards, with the majority
of their accounting choices contradicting (or not entirely consistent)
with full accrual accounting rules. Often, universities decide to follow
cash-based logic (as in the case of student fees and library inheritance),
while one of the main reasons for using accrual accounting is precisely
to increase transparency. The case in which universities clearly follow
the rules of full accrual accounting is capital grants, in which all
universities adopt “income”. However, these are the only cases where
they are fully consistent with full accrual accounting and in all others,
universities seem quite uncomfortable using full accruals.
Universities tend to establish accounting choices that are
inconsistent with the principles of full-accrual accounting, when
choosing accounting standards to be used for some specialized
registrations typical in a public environment. The contribution of
IPSAS also seems quite controversial. Sometimes, universities adopt
accounting options that are coherent with full accrual accounting
principles and consistent with IPSAS, as in the case of research funds
and capital grants (income methods). In other cases, universities tend
to adopt accounting options that are less consistent with full accrual
accounting, even when there is a specific IPSAS, as in the case of student
fees and capital grants (equity method). Finally, there are also situations
where specific IPSAS are not provided (i.e. inheritance libraries) or
where IPSAS provided are not fully coherent with the principles of full
accrual accounting (i.e. inheritance and artistic collections).
In this controversial setting, there is a perception that, while
universities must record items involving explicit enrollment issues (i.e.
library inheritance, student fees and artistic inheritance and collections),
IPSAS does not provide detailed guidelines that can help address these
issues. technical problems and, as a result, universities tend to adopt
accounting options that are less consistent with full accrual accounting.
On the other hand, when accounting items, even those typical of the
public environment, involve only low-level technical accounting
problems, universities try to adopt options that are more consistent
with full accrual accounting, aided in the process by IPSAS. In terms
of research funding, the only issue of technical accounting, in essence,
is the fact that there are no specific standards for regulating these items,
since, as mentioned earlier. They can be registered according to the
rules of “work in progress” (and this, in fact, is what the university
does) because no other issues are really problematic.
In this perspective, the choice made by many universities to
adopt accounting standards that are less consistent with full accrual
accounting rules seems convenient and legitimate. The regulations
they use are tolerated within the broader framework of accrual
accounting, especially when there are no other rules or guidelines that
public organizations can follow when implementing a new system (as
is the case with Italian universities). By acting in this way, they are
able to address many of the registration and assessment issues typical
of the public sphere. The hidden effect of less consistent choices with
full accrual accounting is the loss of transparency and quality of the
information generated. Indeed, as shown for many of the accounting
standards discussed, the lack of specific requirements regarding full
accrual accounting risks changing their performance picture, especially
in terms of the profit and loss presented in their income statements.
3. CONCLUSION
3.1 Conclusion
By examining accrual accounting solutions implemented by several
universities, researchers respond and highlight the need to describe and
study the development of accounting techniques. According to studies,
there is only a low level of compliance with the principle of full accrual
accounting. These results confirm the findings of previous literature.
The analysis also shows that IPSAS does not provide the expected
support when organizations have to adapt accrual accounting to the
public sector. It depends on many relevant technical accounting issues
(registration and valuation issues) that prevent accrual accounting
from being fully used in the public sector. In such situations public
organizations tend to make accounting choices that are less related to
full accrual accounting and more consistent with cash-based accounting,
which is a pre-existing accounting system, following a “political” logic
to avoid further complications in the administrative sector, rather than
seeking the best solution or one that best represents the performance
of the organization. The advice presented was that IPSAS should focus
more on specific subsectors (such as higher education, healthcare, etc.)
and provide detailed guidance on how to address technical accounting
issues typical of the University.
4. BIBLIOGRAPHY
Benito, B., Brusca, I. and Montesinos, V. (2007), “The harmonization
of government financial information systems: the role of the
IPSASs”, International Review of Administrative Science,
Vol. 73 No. 2, pp. 293-317.
Christiaens, J. and De Wielemaker, E. (2003), “Financial accounting
reform in Flemish universities: an empirical study of the
implementation”, Financial Accountability & Management,
Vol. 19 No. 2, pp. 185-204.
Christiaens, J. and Rommel, J. (2008), “Accrual accounting reforms:
only for businesslike (parts of) governments”, Financial
Accountability & Management, Vol. 24 No. 1, pp. 59-75.
Christiaens, J., Reyniers, B. and Rollé, C. (2010), “Impact of IPSAS
on reforming governmental financial information systems: a
comparative study”, International Review of Administrative
Science, Vol. 76 No. 3, pp. 537-554.
Christiaens, J., Rommel, J., Barton, A. and Everaert, P. (2012), “Should
all capital goods of governments be recognised as assets in
financial accounting?”, Baltic Journal of Management, Vol. 7
No. 4, pp. 429-443.
Ezzamel, M., Hyndman, N., Johnsen, A., Lapsley, I. and Pallot, J.
(2005), “Accounting, accountability and devolution: a study
of the use of accounting information by politicians in the
Northern Ireland assembly’s first term”, Irish Accounting
Review, Vol. 12 No. 1, pp. 3962.
Grossi, G. and Soverchia, M. (2011), “European commission adoption
of IPSAS to reform financial reporting”, Abacus, Vol. 47 No.
4, pp. 525-552.
Paulsson, G. (2006), “Accrual accounting in the public sector:
experiences from the Central Government in Sweden”,
Financial Accountability & Management, Vol. 22 No. 1, pp.
47-62.
Scott, G., Bushnell, P. and Sallee, N. (1990), “Reform of the core public
sector: New Zealand experience”, Governance, Vol. 3 No. 2,
pp. 138-167.
ARTICLE 7
ACCOUNTABILITY OF MOSQUE FINANCIAL
MANAGEMENT
By:
Holilullah
Hendrawan Santosa Putra
1. INTRODUCTION
1.1 Background
The development of science in Indonesia continues to increase along
with more complex improvement of a person’s and the rapid progress
of social sciences, especially accounting social sciences. Accounting
science is not limited to financial statements, and is not limited to
government or companies, but many entities outside it such as worship
entities in today’s society. Nusantara is a popular name for Indonesia
which is synonymous with diverse cultures and has many worship
entities that continue to be maintained.
In fact, there are obstacles that must be faced, such as fraud
and others. Greenlee, et al (2007) in Fitria (2017, 1), stated that these
obstacles are not only faced by non-profi entities, but also entities such as
religion. It has shown that non-profit organizations or religious entities
are lack of accountability and transparency in financial management
(Dhanani &; Connolly, 2012). Dewi, et al (2015, 1) explained that
accountable financial management, especially religious entities, is
highly expected by stakeholders.
Accountability, according to Roberts & Scapens (1985) in Fitria
(2017, 1) is defined as demanding and giving, from the giver as
accountability to an entity or society. Meanwhile, according to Ebrahim
(2003, 2) Accountability is accountability by entities or individuals
starting from reporting and performance to the public. Mardiasmo
(2006) states that accountability is defined as the obligation of an
entity’s mission to be accounted for success or failure in the objectives
that have been implemented.
In non-profit entities, accountability is still dominated by
principal-agent relationships (Ebrahim 2003, 2) where agents are parties
authorized by the principal in managing entities who are in line with
the principal. The relationship between agents and principals occurs
because of differences in interests between those who have capital
and those who manage it. These differences in interests trigger conflicts
between the two. It is due to the fact that human nature tends to prioritize
their personal needs, but the worship organizations do not, Siskawati, et al
(2016, 1) mentioned that errors in managing finances, sometimes do not
cause complaints to religious entities such as mosques.
In this case the mosque entity as a religious entity. Mosque is a
non-profit organization where mosque managers have the obligation
to convey the entry and exit of funds provided by the community
(Siskwati et al, 2016, 1). However there are critics on the accountability
of mosque entities. Mohamed et al, (2014, 189-194) stated that there
are financial management in religious entities such as mosques still
very weak. It is related to the lack of the financial management which
is less professional (Yasmin et al, 2014).
Fitria (2017, 1) stated that mosque is where religious activities
develop and it has a mosque organization that takes care of its
governance and activities. Thus, the activities carried out must be
accountable to the public. Accountability in question is mandatory,
because the mosque entity is the source of finance from the community,
both in the form of alms and infak and other assistance, so that the
mosque entity can be called a public organization whose activities are
also accountable to the public.
However, accountability practices in mosque organizations have
not been fully implemented. This happens because of the culture
in religious entities, such as Masjid Alamul Huda Kawangrejo,
Mumbulsari, Jember. The Alamul Huda Mosque was chosen by
researchers as the object of his research because it was motivated by
the strong character and condition of Islamic culture in rural areas,
which often do not pay attention to financial management.
Currently, the person who manage mosque finance does not have
accounting education background, they are usually the neighbouring
people who is mutually agreed to be responsible for the fund
management. When the finances management has not been explained
in detail, the use of the funds cannot be clearly known. The mosque
administrator, in this case the treasurer only uses simple records, which
are only reported during Friday prayers and not in detail.
From the background above, we can conclude, the Alamul Huda
Mosque has reported its finances which are carried out every Friday
prayer through the reading of the total balance before the prayer begins.
but this cannot be a reference to the accountability practices carried out
at the Alamul Huda mosque have been good and correct. As a religious
organization, accountability is the practice of accountable financial
management to the community.
The practice of accounting in religious entities or nonprofits is not
familiar. Simanjuntak &; Januarsi (2011) even though it is a strange
thing, the practice of accounting for religious entities in the church
has often been carried out. Dewi, et al (2015, 1) shows that financial
management of GKBI involves professionals in managing it. Rini
(2015, 5) states that accountability in church organizations focuses on
constructive relationships with their gods.
Fitria (2017, 1) stated that accountability is accountability
to achieve the pleasure of Allah, S.W.T. Salle & Lutfillah (2014)
mentioneed that accountability from an Islamic perspective concluded
that every human being is obliged to account for the actions and trusts
that have been given by the trustee.
1.2 Problem s Formulation

From the background of the problem, the author formulates as follows:
How is the accountability practice of financial management of the
Alamul Huda Mosque, Jember Regency?
2. DISCUSSION
Accountancy
Accounting is an important tool for stakeholders such as government,
investors and the public in general who need information about the
finances of an entity. Rudianto (2009) states that accounting is a system
about the company’s financial condition for parties who have interests.
Another definition of accounting presented by the American Institute
of Certified Public Accounts is an activity that functions to provide
financial data, from a business activity for decision-making purposes.
Based on the above opinion, it can be concluded that accounting is
a process of recording, summarizing and reporting carried out by an
accountant to provide information about accurate financial statements
and their validity can be accounted for to all parties and leaders, so that
leaders can make decisions.
Accountability
In accounting records, various other aspects also need to be considered,
such as accountability aspects. Accountability can be seen from various
aspects. Lawton & Rose in Suherman (2007) states accountability
is a process of individual or entity activities in the activities carried
out. According to Lessinger in Suherman (2007), accountability is an
activity carried out with the use of funds and achievements obtained.
Mardiasmo (2006) said that accountability is an activity that is obliged
to be accounted for with the aim of success or failure with agreed targets.
Another definition by SAP in 2005, Accountability is the resources and
implementation that are accountable to the organization periodically to
achieve the goals that have been set.
In short, the definition of accountability is the accountability
of an organization for the tasks obtained in managing finances to
assist entities in their performance. It can also be a defiance of the
organization’s goals. So that good accounting practices that are in line
with accountability will produce quality financial statements.
Non-Profit Financial Statements

Financial statements according to various opinions such as in PSAK
Number 45 concerning organizations such as worship entities, the
components in the financial statements consist of financial position,
activities, cash flow, and financial statements. As for external parties,
namely the activities of an organization, in the mosque organization,
where it is a form of accountability for the use of funds and mosque
activities that are good and correct.
Public Accountability to Religious Entities

According to Mahmudi (2005), public accountability is a form of
obligation of the recipient of responsibility to manage and report
all public activities related to the party giving responsibility. Public
accountability is also defined as a responsibility of the trustee to the
trustee for the activities carried out (Renyowijoyo, 2010). Accountability
can also be interpreted as a responsibility that must be reported for the
activities carried out. Religious entities such as mosques and others
are associations that have activities related to religion, are part of non-
profit entities.
Simanjuntak &; Junarsi (2011) stated that accountability can
also be interpreted as a mandatory obligation that must be followed
in carrying out a decision. Public accountability is divided into two,
namely vertical and horizontal, which according to Mardiasmo (2011)
vertical accountability is an accountability to superiors or higher, while
horizontal is an accountability to the public, general and society at large.
In religious organizations, vertical accountability is all activities that
will be accountable to God. Triyuwono (2003) argues that based on his
wishes, humans are given the responsibility to manage the earth and its
contents. It means that man has an obligation that will be accountable
for all his activities to God. While horizontal accountability in
religious organizations is a relationship between givers and recipients
of responsibility (Triyuwono, 2003). The relationship is a form of
obligation to account to the public, society and the environment.
3. DISCUSSION AND RESULTS

Accounting Practices at Alamul Huda Mosque are Still Simple
From the analysis conducted at the Alamul Huda Mosque, in general
account practice has been carried out, although the mosque manager has
lack of knowledge in accounting. Alamul Huda Mosque is classified as
self-help because mosque as it is managed and built from the self-help
of the community around the mosque itself. The accounting practices
carried out by the Alamul Huda Mosque are still simple and have not
referred to the guidelines such as PSAK. It is in accordance with the
statement of informants and community leaders who stated:
“In my understanding, currently the recording in this mosque is still not
a detailed record, only the recording of money in and the money out”
(Wahid, 2021).
Based on the answers of the informant or community leader
that the implementation of accounting practices at the Alamul Huda
Mosque has not been carried out thoroughly and in detail but is carried
out only in simple terms such as cash in and out. Another statement
emerged from an informant outside the management of the mosque
itself which further reinforces the informant’s previous statement:
“As far as I know, it’s just a simple recording that is delivered once
a week before Friday prayers begin, it’s like income sourced from
donation and money expended for some kind of equipment, the
main needs of the mosque” (Hadi, 2021).
From some of the informant’s statements, it can be concluded
that, in the reality, in the field of accounting practices by the mosques,
especially the Alamul Huda Mosque, it is found that it still uses simple
recording, the results of which are submitted once a week and are
not in accordance with applicable standards. Likewise several other
informants utter the same opinion, namely the financial recording
carried out by the Alamul Huda Mosque is still very simple.
While PSAK 45 concerning financial statements of non-profit
entities that need to be done by mosque managers is that there are
four types of financial statements commonly called CALK, namely
statements of financial position, activity reports, cash flow statements,
and notes to financial statements. In fact, in the field of the Alamul Huda
mosque, the recording is still focused on cash in and cash out only, not
fully covering the elements of financial statements in PSAK. Which
makes it difficult to arrange the recording of the financial statements
of the Alamul Huda mosque in four types that are in accordance with
standards. The recording of the financial statements of the Alamul
Huda mosque if included in the four types of incoming PSAK financial
statement standards and can be used in the type of cash flow statement.
The cash flow statement which presents money in and out in one period,
which can be modified in the monthly period.
Management Equally Assists in the Financial Management of
Alamul Huda Mosque
In managing financial activities, mosque administrators have a role
in managing mosque finances by conducting regular supervision and
monitoring, avoiding the possibility of things that will cause recording
errors so as to minimize. This is evidenced by various statements from
informants as follows:
“So in managing this mosque, we just manage it together, so
that there is no social jealousy anyway, we are for our respective
charity.” (Muzai, 2021).
From some of the informant’s statements, it can be concluded
that the management of the Alamul Huda mosque is carried out jointly
from all administrators starting from the chairman to the lowest ranks,
all participate. Not only that, some views that in managing all mosque
activities voluntarily is the charity of each individual voluntarily so that
administrators sometimes do not think about the level of position or trust.
This illustrates not only activities in the field, there are spiritual values
in each administrator such as sincere work which they consider as their
personal charity, and are responsible for the activities that have been carried
out. This is in line with the theory that supports Sharia’te Enterprise where
it has spiritual values, such as: sincerity, honesty, and responsibility.
The next explanation from the informant of the mosque
management:
“Every Friday, the administrators of the mosque gather. our aim
is to have transparency. Just keep the trust, so we count (cash in
and cash out). Apart from the treasurer, this meeting was also
attended by other board members, even the active members of the
congregation who usually come here often help and attend, because
we also need help, if we can’t afford it ourselves” (Irwan, 2021).
By statement from the informant, it can be concluded that the
Alamul Huda mosque in managing finances is carried out openly by the
management and the surrounding community, once a week on Friday
by calculating the receipt of alms, infaq and mosque maintenance
expenses by the mosque treasurer which is also supervised by other
administrators along with the surrounding community where the
community is the mosque congregation itself. This is accountability
and transparency carried out by the management of the Alamul Huda
mosque horizontally, as evidenced by the openness of the management
to the public or worshipers outside the management. (stackholder).
Siskawati, et al (2015) stated that the main factor that becomes a
reference for mosque administrators is public trust in their managers
to carry out all mosque activities. In maintaining this trust, the
management always prioritizes honesty as the main value in carrying
out its programs. By inviting together all levels of management and
other communities in calculating income and expenditure once a week.
Horizontal Accountability of the Financial Management of Alamul

Huda Mosque to All Worshippers
Accountability in managing the financial part carried out by the
management to all mosque worshippers as stakeholders is part of
Horizontal Accountability. Horizontal accountability is an accountability
to others or other parties with the same interests, but they have the
right to know the results. While horizontal accountability carried out
at the Alamul Huda mosque is applied by notifying the incoming and
outgoing money and the total balance to the congregation every time
before the Friday prayers of the Alamul Huda mosque begin. This was
clearly conveyed by one of the informants who was a worshipper of the
Alamul Huda mosque:
“It is true, during Friday prayers there is a submission for mosque fees
that are carried out. At least from mosque administrators who convey
how much money cash in and out with the remaining total balance,
sometimes the imams deliver before the sermon begins” (Aziz, 2021).
From the explanation of the informant stated that financial
reporting at the Alamul Huda mosque was carried out once every
Friday. It is Indirectly related to Simanjuntak and Junarsi (2011) which
states that accounting in practice continues to encourage accountability
and transparency, but as the time changes, it shifts and encourages it to
become one of the riya’ or show-off worship behaviors. This behavior
indirectly occurs because of the obligation of the mosque manager to
inform worshippers about donations from donors.
The next is described by another informant as follows:
“Indeed, from the beginning it was only reported every Friday
prayer. Usually the previous week’s income report is used to
continue expenses for the previous week as well. The contents of the
submitted report are; reports on incoming and outgoing money, and
donations in the form of alms or infaq from the community. After
that, the report is written on the information board at the mosque,”.
(Andi, 2021).
The explanation of the informant showed accountability and
transparency in the Alamul Huda mosque to all worshippers is by
announcing their financial statements once a week, every Friday
prayer and place the report on the information board, in order that the
worshippers could reread the information. The mosque administrators
can also monitor continuously as a form of supervision, and people from
other areas who pray in the mosque can see from the accountability
conveyed on information boards by administrators to the public.
Vertical Accountability as a Form of Responsibility in Prospering

the Alamul Huda Mosque
The management has full responsibility in carrying out the mandate and
maintaining the mosque, the manager of the mosque must function the
mosque as its function. Without mounts and other interests including
politics. Mosques are places for people to gather with religious
activities, but administrators must update the boundaries so that there is
no political influence or from certain groups. This statement is different
from Fitria (2017) which states that mosques have political influence in
accountability mechanisms. This resulted in the mosque getting outside
funds for religious activities. In accounting for his trust, the mosque
management continues to strive in carrying out its activities, sincerely
does not expect frills from any party. As explained by one informant:
“We, as administrators who have been in this mosque for a long time,
continue to be in the form of what is the way to prosper the mosque
by inviting the surrounding community to pray in congregation in
the mosque, well, especially men because here it is recommended to
pray five times in congregation at the mosque through the delivery
of khotib lectures during Friday prayers. So that they will have a
sense of themselves. Then we continue to try to invite worshippers
when they run out of magrib not to go home, let it be in the mosque,
either reading yasin or reading Quran individually. In essence, our
goal is to let them have religious activities after Maghrib. That’s all
we do as our responsibility as administrators to the surrounding
community as well as financial responsibility, yes we try to make
sure maybe invite them. Because what God sees is our efforts, not
the results. Well, even though we don’t receive salary, the most
important is we have tried our best” (Irwan, 2021).
From this explanation, the mosque administrator efforts to
maintain the activities are reflected in various ways, namely working
sincerely and inviting the community to pray five times a day, prospering
the mosque with religious activities such as dzikir after magrib and
all of that they consider as part of their main duty as servants who
believe in Allah SWT. This is a form of vertical accountability with
the responsibility of the management to God. They are not only about
financial reporting, but they escort and supervise the activities of the
mosque so that the mosque continues to live for. This accountability is
part of the accountability of a creature to his god, namely Allah swt.
This is a form of vertical accountability.
The sincerity of mosque administrator in carrying out the
activities is shown by the fact that they do not receive any wages. It
makes it difficult to measure the performance, because all its activities
are purely due to Allah Almighty. Siskawati, et al (2015) stated that
accountability has several challenges, such as the absence of formal
rules and laws that require entities to prepare performance reports.
In this case, contexts such as mosque entities, tend to not have
binding rules or systems, but are limited to only applicable social legal
rules that are supported by spiritual values as a barrier in carrying out
their activities.
Management Profession is Different from Job Responsibilities

Based on research on the suitability of expertise and responsibilities
possessed by the management, in managing finances in mosque entities
the main factor is the trust of the community in carrying out mosque
activities. It supports Siskawati, et al (2015), namely the main factor
held by the management when carrying out its activities and mosque
programs is the trust of the community, especially the worshippers
themselves. In maintaining this trust, mosque administrators continue
to uphold the honesty and trust given.
Based on this research, the inconsistent accounting role of the
Alamul Huda Mosque, Jember Regency shows that there is no Clash
of Jurisdictional. The mechanism for selecting the management of
the Alamul Huda Mosque is through deliberation from worshippers
with former or current administrators with a voluntary mechanism
assessed from the routine of worshiping at the mosque, they have not
prioritized the expertise or understanding of prospective administrators
in their fields. This is related to the statement of informants who is
undergraduate student:
“I agree with such a mechanism. Because the situation on the
ground, especially in this mosque, is like that, many are appointed
but do not want to. Only a few are willing, so it needs even appointed
support from the community itself. Now the important thing is that
he wants to be good, especially the financial part. often it is not in
accordance with our job” (Fajar, 2021).
In addition, the lack of skilled and productive human resources who are
capable in the field such as students that do not have active participation
of worshippers, and the surrounding community in prospering the
mosque. Because the environment around the mosque is still a lot of
individuals, people who have expertise in their fields work a lot outside.
Such as the submission of one of the following informants:
“Look, here it’s hard for people to be busy at work. so those who
play a lot of active roles come to the mosque, yes, it continues to be
the majority of people who are elderly” (Nurul, 2021).
According to this statement, the facts on the role of accounting
for the Alamul Huda mosque are not fully realized and are inconsistent.
Various factors such as environmental conditions also affect the lack of
accounting practices at the Alamul Huda Mosque.
4. CONCLUSION
Based on the results and discussion of accountability findings and
discussion on accountability of financial management at the Alamul
Huda Mosque, Jember Regency, it can be concluded that accountability
practices in mosques have been carried out, in this case in the context
of religious entities which are basically non-profit organizations.
Furthermore, the practice of accountability at the Alamul Huda
Mosque is in accordance with the concept of horizontal and vertical
accountability.
It is in accordance with the findings, namely the accountability of
mosque administrators by reporting finances every Friday which is then
written on the information board regarding developments in mosque
finances. In terms of managing finances, it has also been carried out
honestly and openly with mosque administrators and worshippers.
Accountability values are also shown from the activities in it. The
management also continues to invite worshippers to pray five times in
the mosque, this is a form of trust and accountability to Allah swt.
Then the next result shows that the accounting practices at the
Alamul Huda Mosque, Jember Regency, are carried out simply. In
this case, accounting practice is only as an activity of the financial
management process by recording cash in and cash out. This is due
to differences in the backgrounds of the management, which results
in a very weak understanding of accounting. Although the practice in
managing finances has been honest, trustworthy and transparent, the
practice in the context of organizational standards is not yet appropriate.
In addition, the mechanism in choosing mosque management is by
deliberation which tends to be voluntary.
From the conclusions above, the researcher suggested that there
should be improvements in recording practices in managing the
finances of the Alamul Huda Mosque, by recording also the mosque’s
non-cash receipt assets to be more detailed and more transparent.
In the next study, it can examine more deeply on the accountability
of financial management of mosques in Jember Regency, so that
it can be a comparison with previous research, and hope that the
government also has an active role by creating programs related to
mosque empowerment, so that mosque funds can increase, and that
the experience of mosque administrators also increases. The mosques
can follow the SAK 35 standard for religious entities, as generally
accepted accounting records and reporting.
5 BIBLIOGRAPHY
Dewi, K.G.S.S., Atmadja, A.W.T., and Adiputra, M.P. 2015. The Concept
of Financial Accountability in Religious Organizations (Case
Study of the New Apostolic Church in Indonesia, East Java
and Bali Districts). Journal of Accounting S1 Vol. 3 No.1
Dhanani, A & Connolly, C. 2012. Discharging not-for-profit
accountability: UK charities and public discourse. Jurnal
Accounting, Auditing & Accountability Vol. 25 No.7
Ebrahim, A. 2003. Making Sense of Accountability: Conceptual
Perspectives for Nothern and Southern Non Profits. Jurnal
Non-profit Management and Leadership Vol. 14 No.2
Fitria, Yunita. 2017. Accountability in Religious Organizations: A
Case Study of Mosques in Balikpapan, East Kalimantan.
Accountable Journal Vol. 14 No.1
Indonesian Institute of Public Accountants (IAPI). 2005. Government
Accounting Standards (SAP). IAPI. Jakarta
Mardiasmo. 2006. Realization of Public Accountability Transparency
through Accounting. Andy Publishers. Yogyakarta
Mohamed, I. S, N.H.A. Aziz, M.N. Masrek, dan N.M. Daud. 2014.
Mosque Fund Management: Issues on Accountability and
Internal Controls. Jurnal Precedia-Social and Behaviour
Sciences Vol. 145 Hlm. 189-194.
Rini, Ayu Dwidyah. 2015. The Relevance of Entrepreneurial University
Program Sustainability, Accountability, Transparency to
Church Community Attitudes. Journal of Multiparadigm
Accounting (JAMAL) Vol. 6 No. 5
Roberts, J., dan Scapens, R. 1985. Accounting Systems and Systems
of Accountability Understanding Accounting Practices in
Their Organisational Context.Acoounting, Organisations and
Society.Hal 443-456
Rudianto. 2009. Introduction to Accounting. Erlangga. Jakarta
Salle, Ilham Z, and Lutfillah, Novrida Q. 2014. Accountability of
Islamic Perspectives. Islamic Accounting: Series of Concepts
and Applications of Islamic Economics and Business.
FORDEBI &; ADESY. Jakarta
Simanjuntak, D. A, and Junarsi, Yeni. 2011. Accountability and
Financial Management in Mosques. Journal of the National
Symposium on Accounting 14. Aceh
Siskawati, Eka, Ferdawati, and Surya, Firman. 2015. How Do Mosques
and Communities Prosper Each Other? Meaning of Mosque
Accountability. Journal of Multiparadigm Accounting
(JAMAL) Vol. 7 No.1
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Economic System II. PPBEI, Universitas Brawijaya.
ARTICLE 8
INFORMATION TECHNOLOGY USE ON INTERNAL
CONTROL AS FRAUD TENDENCY ALARM IN THE
GOVERNMENT SECTOR ( A CASE STUDY IN THE
DEPARTMENT OF PUBLIC WORK AND SPATIAL
PLANNING OF LUMAJANG REGENCY)
By:
Imanita Septian Rusdianti
Nining Ika Wahyuni
Alfi Arif
1. INTRODUCTION
1.1 Background
The Government Regulation Number 60 of 2008 concerning the
Government Internal Control System stated that government agencies
are elements of government both at the central and regional levels as
the executives to achieve government goals. Therefore, all government
agency apparatuses have main duties and functions that must be
supported by ethical behavior. However, there are apparatuses both
in the central and local government commit fraud. According to The
Association of Certified Fraud Examinations, fraud is categorized into
three groups, namely statement financial fraud, asset misappropriation,
and corruption. The ICW data, as revealed by Rosy Dewi Arianti on the
kompas.com website, states that in the first semester of 2022, the state
losses due to corruption crimes involving 252 corruption cases with
612 suspects with corruption proportions reached IDR 33.665 trillion.
Internal control is the main alarm in preventing or minimizing
fraud tendency (Tuanakotta, 2019). Fraud may occur in various entities,
both the government and private sector. It is a major threat to the entire
organization, especially for organizations that are unable to carry
out internal control optimally. Effective internal control is studied to
minimize the occurrence of fraud tendency (Rusdianti, 2018). There are
5 (five) components of internal control according to COSO, namely: (1)
Control Environment; (2) Risk Assessment; (3) Control Activities; (4)
Information and Communication; (5) Monitoring Activities (Anderson
et al., 2017). Various efforts are made by organizations to improve
internal control, one of which is the use of information technology (As
Syifa Nurillah, 2014).
Information technology has begun to be done in the government
environment, both central and regional governments. Technology can
strengthen an organization’s internal control system, but it can also be
a challenge (Arens, 2014). To create an integrated system to improve
the effectiveness of internal control and good and transparent financial
management, the government implements e-finance (Rusdianti et al.,
2022). The adoption of E-finance in the government sector is expected
to be a way to increase the effectiveness of internal control. E-finance
is a regional financial information system that supports the application
of accrual-based government accounting standards, as the government
efforts in the use of information technology.
With a system that utilizes the sophistication of this technology,
it is expected that all RAO financial management transactions can be
integrated and transparent. Transparent financial management will
reduce fraud tendencies within the government. Every local government
is required to be able to present transparent, accurate, and easy-to-read
financial statements (Admaja & Wahyundaru, 2020). One of them is the
government of Lumajang Regency, East Java. The Lumajang Regency
Government is one of the local governments that utilizes technological
sophistication by compiling accurate and integrated financial reports.
The Financial Audit Board (FAB) has mandated that the Lumajang
Regency Government get a Unqualified Fair opinion (WTP) for 4 (four)
consecutive years. From 2018 to 2021 specifically (surabaya.kompas.
com, 2022). The performance of RAO in LKPD reporting each fiscal
year led to this Unqualified judgment. By observing how the system is
applied in it, we may undoubtedly learn positive behavior. How does
the Lumajang Regency Government apply its internal control system
in order to meet its goals or duties for producing open and accountable
financial accounts and earn the label of “Unqualified Opinion”? The
aforementioned issue makes us as researchers anxious to determine
whether internal control might serve as a fraud alert in the government
sector? By utilizing increasingly sophisticated information technology,
get this internal control to run more effectively and efficiently.
The issues in this study are can internal control actually serve
as an alarm to reduce fraud tendencies in RAO Lumajang Regency
based on the issues mentioned above? and How is the internal control
component of COSO looking at the efficacy of internal control with
regard to the adoption of e-finance?
2. DISCUSSION
2.1 Fraud Tendency
Fraud is the act of ignoring the amount or revealing deliberate
misstatements in reports to deceive users of financial statements
(Arens, 2014). Fraud can be interpreted as: fraud, fraud, crime, lies,
embezzlement, data manipulation, engineering information, changing
public opinion by distorting facts, and deliberately eliminating existing
evidence (Rusdianti, 2018).
Fahmi (2011) revealed several forms of fraud, namely:
1. intentional errors made for one’s own gain
2. Accidental fraud, such as wrongly entering data or failing to follow
recording requirements,
3. Together, these deviations are used to take advantage of these people.
4. saying something truthfully although knowing it to be false.
5. claiming something is false just because someone doesn’t have
evidence to support it
6. Make commitments without intending to keep them
7. deviations made by employees for their own benefit
8. Management makes deviations to the harm of other stakeholders.
9. gang activity
10. Using information technology illegally
11. Upper class criminality
To overcome this fraudulent behavior, some solutions according
to Fahmi, 2011 are:
1. Enhanced internal controls
2. Conduct a thorough hiring process
3. Boost the accuracy of internal audits
4. Ensure that each employee receives fair compensation.
5. Employee rotation and use of leave entitlements
6. provides a spiritual boost
7. Establish severe penalties for offenders and express gratitude to
achievers
8. fostering openness in the workplace
Enhancing internal control is one of the many strategies suggested
to combat fraud behavior; this is supported by Tuanakotta (2014), who
states that internal control strives to deliver financial statements that are
free from misstatement through both input error and fraud inclination.
2.2 Internal Control

Internal control is a set of procedures, policies, and practices created
by management to guarantee that financial reporting is accurate and
compliant with the relevant accounting framework (Tuanakotta, 2014).
Government Regulation of the Republic of Indonesia Number 60 of 2008
describes the internal control system of the government as a continuous
process of actions and activities that are carried out by leaders and staff
to instill confidence in the accomplishment of effective and efficient
organizational goals, accurate financial reporting, the security of state
assets, and compliance with laws and regulations.
The objectives of internal control according to COSO include:
1. Operational objectives: which pertain to the effectiveness and
efficiency of the entity’s operating activities, including operating
and protecting assets from losses.
2. Reporting Purpose: relates to internal and external financial,
non-financial reporting and may include reliability, timeliness,
transparency, or entity policies.
3. Purpose of Compliance: relating to compliance with laws and
regulations relevant to the entity.
These three objectives can be useful in measuring the success of
internal controls implemented by the entity.
2.3 The Use of Information Technology

According to Syifa Nurillah (2014), all organizations, including
the government sector, use information technology. According to
Government Regulation Number 56 of 2005, in order to execute good
governance, the federal government and local governments are required
to create and use new information technology to make it easier for
employees to move between work units. The use of e-finance makes
this possible. According to Perbup Lumajang Number 103 of 2019,
e-finance is an application created to carry out the administrative,
reporting, and regional financial accountability processes in the context
of effectively implementing the regional budget. Using technology to
create an integrated system, the regional financial information system
known as e-finance supports accrual-based government accounting
rules and makes financial reporting easier (Rusdianti et al., 2022).
2.4 Research Site: RAO of Lumajang District Government

RAO is an organization in the local government responsible for
implementing government in the region. The Public Works and Spatial
Planning Agency (PWSP) and the regional Financial Management
Agency are one of the Regional Apparatus Organizations (RAO) in
Lumajang district that implemented e-finance starting in 2015. E-finance
is a system that facilitates financial reporting by utilizing increasingly
sophisticated technology, so that the information produced in the
e-finance system is integrated in each department, which is expected
to increase the effectiveness of internal control that can prevent or
minimize irregularities.
2.5 E-financing Implementation’s Adherence to COSO Internal

Control Components and the Efficiency of Internal Control
Component I: Control Environment
Because finance has basic posts and is in conformity with earlier
manual data input, it is seen to be simpler for users or presenters
of financial results. The PWSP Office of the Lumajang Regency
Government implemented e finance starting in 2015 with various
existing adjustments. The use of information technology is considered
by the PWSP service to be very timesaving, because there is no need
to compile and calculate manually. It instantly generates the necessary
output just by supplying the posts’ fundamental transaction data. so that
the efficiency of creating financial statements in line with government
objectives can be improved by this application.
The financial reports produced by this application are accurate and
transparent because reconciliation is always carried out every month.
It makes financial activities within the PWSP office run effectively and
efficiently and minimizes errors, which can be overcome immediately
if there is an incorrect input or accidental error. In this application,
assets are considered safe because, in e-finance, asset control becomes
easier. This is in accordance with the applicable laws and in line with
Lumajang Regent Regulation Number 103 of 2019 concerning the
implementation of regional financial information systems.
Component II: Risk Assessment
The implementation of e-finance may encounter difficulties or risks,
such as those related to server and network damage. If this occurs, it
will have an effect that makes it harder for the entity to attain its goals
(Anderson et al., 2017). The occurrence of server damage or network
problems, making reports that should have been completed become
delayed. If this happens repeatedly, it is possible to cause behavior
fraud tendency on users or compilers of financial statements.
However in this application, the possibility of such deviations is
exceedingly small. Because this e-finance system is integrated between
PWSP agencies and the government. Thus, it is virtually unheard of
for fraud to be committed by a single person. Unless the departure is
jointly and intentionally carried out. With the verification function, this
also puts further pressure on the motives of offenders who frequently
cheat to carry out their deeds.
Component III: Control Activities
Control activities, including the authorisation and approval of
transactions and activities, are one of them at the PWSP office of the
Lumajang Regency Government. To ensure that the leader is totally
accountable for the approval granted and that all transactions and
activities are carried out with the leader’s knowledge. In addition to
authorization in this application, there is also a separation of duties,
namely between the preparation of programs for budget input, the
implementation of activities carried out by the treasurer, and verification
and reporting by the KDP. Each user has a different username and
password. They also have their own duties and authorities, so they
cannot access e-finance other than their own. As one element of control,
if there is a data input error either intentionally or unintentionally,
the user must create an adjustment memory (MP), which can then be
revised data. This application has a verification function that allows
managers to review the output or performance of their subordinates in
order to minimize errors. It is anticipated that this control activity will
help the business better manage risks and increase the likelihood that
its goals and objectives will be met.
Component IV: Communication and Information
The use of information technology in the form of e-finance applications
starts from the budgeting process using SIPD (Regional Development
Information System). Then enter the SIPKD (Regional Financial
Management Information System) for financial administration or
realization and reporting. The information produced by e finance is
relevant to the PWSP service’s needs to date. Reports generated
from the series of processes include: LRA, Balance Sheet, LO, LPE,
Journal, LRP. As for the output, it is not published, but simply given
to interested parties related to the agency, the field of budgeting and
the head of the service. In this case, communication and information
in this application are adequate and in accordance with PP Number
56 of 2005 concerning Regional Financial Information Systems and
Lumajang Regent Regulation Number 103 of 2019 concerning the
Implementation of Regional Financial Information Systems.
Component V: Monitoring Activities
The e finance report is accurate and considered able to assist in
organizational decision making. It may be seen in the functions offered
by e-finance, which already meet the requirements of the PWSP office
of the Lumajang Regency Government. The final report is also capable
of addressing the financial standing of the district of Lumajang’s local
government. Periodic audits are also carried out annually, conducted by
the Financial Audit Board (FAB), whose results or so-called opinions
on financial statements will later be announced. If revision is needed,
it will be revised by the relevant agency. In this case, monitoring
activities have been running properly, and the Lumajang Regency
Government has received an Unqualified Fair opinion for 4 (four)
consecutive years, which means that the Local Government Financial
Statements for Fiscal Years 2018, 2019, 2020 and 2021 yesterday were
transparent, accountable, and healthy.
2.6 Internal Control as an Alarm to Prevent Fraud

Looking at the five components of internal control according to
COSO (Committee of Sponsoring Organizations of the Treadway
Commission), which include control environment, risk assessment,
control activities, communication and information, and monitoring
activities Internal control within the PWSP office of the Lumajang
Regency Government, with the use of information technology using
the e-finance application, has proven to be an alarm in preventing fraud
tendencies in the government environment. With monthly reconciliation,
it can minimize mistakes, both intentional and unintentional. Errors
can be early detected. So, it is not possible for fraudsters to launch their
actions, even for reasons of unintentional mistakes..
With an integrated system, there is a risk of server errors or poor
internet connections. But fraudsters will think twice about acting
because financial statements can be opened anywhere and anytime.
Separation of duties for e-finance users prevents fraud. Because not just
anyone can access the application. Access usernames and passwords
have a confidential nature.
E-finance has produced reliable and trustworthy financial
information regarding the PWSP service, which can then be shared
with interested parties. This application’s monitoring can be done at any
moment because the data input can produce quick results. Fraud will
therefore be challenging. Because the system is capable of promptly
detecting deviations or discrepancies.
3. CONCLUSION
Internal control is the main alarm in preventing fraud tendency in
the PWSP office of the Lumajang Regency Government. Through e
finance implemented by the PWSP service, fraud behavior is difficult
to do. The following is the effectiveness of internal control, in terms of
the internal control component of COSO:
1. Environmental Control Components
Financial Statements are reconciled monthly. To prevent mistakes
from being purposeful or from being foreseen. This makes it
challenging for fraudsters to execute their schemes.Risk Assessment
Components
This e-finance system is integrated between RAO and the
government Consequently, it is practically impossible for fraud to
be committed individually. Even so, there’s a chance that the internet
and the servers could get damaged. Because of its integrated nature,
it can be accessed anywhere and anytime.
2. Components of Control Activities
Every transaction or activity carried out requires authorization or
approval from the leadership. As well as the separation of duties for
e-finance users, making it difficult for irregularities to access data
that is not their authority.
3. Communication and Information Components
RAO’s financial information has been presented accurately and
reliably, which is then communicated to interested parties. So that
the information may not fall into the wrong hands.
4. Components of monitoring activities
Periodic audits are carried out annually, which are carried out by
FAB. In addition, every day is also monitored by superiors of each
service through reports generated by this application. So it is very
unlikely for fraudsters to carry out their mission.
According to the research’s findings, internal controls employing
e-finance can serve as an early warning system or alert to identify fraud
tendencies in Indonesia’s government sector.
4. BIBLIOGRAPHY
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and the internal control system on the quality of local government
financial statements (empirical study on the Depok City SKPD).
Diponegoro Journal of Accounting, Volume 3(Number 2), 1-13.
Fahmi, I. (2011). Management of Theories, Cases, and Solutions.

Bandung: Alfabeta.
Rusdianti, I. S. (2018). The Effect of Internal Control, Compliance with

Accounting Rules, and Unethical Behavior on the Tendency
of Accounting Fraud at PT. Ciomas Adisatwa, Tbk East Java
Region 1 Malang.
Rusdianti, I. S., Irmadariyani, R., & Kustono, A. S. (2022). E-Finance:

Mitigation of Fraud Tendency in Indonesia. IJEBD International
Journal of Entrepreneurship and Business Development eISSN
2597-4785 pISSN 2597-4750, 5(3), 581-589.
surabaya.kompas.com. (2022). Lumajang Regency Government Receives

WTP Opinion from FAB for 4 Consecutive Years: This is an
Obligation.
Tuanakotta, T. M. (2019). Risk-Based Internal Audit. Jakarta: Salemba

Empat.
ARTICLE 9
SOA FUNDS: ACCOUNTABILITY,
TRANSPARENCY
AND THE CHALLENGE IN INDONESIA
By:
Annisa Tri Hidhayati
Atma Hayat
Rahma Yuliani
1. INTRODUCTION
1.1 Background
The Law Number 20 of 2003 concerning the National Education
System states that pursuing limitless education is the right of all
Indonesian citizens. It is also emphasized through article 6 paragraph
1 stating that every citizen aged 7-15 years is obliged to attend basic
education. Article 34 paragraph 2 contains that the central and regional
governments must be responsible for ensuring the implementation
of compulsory education at least at the basic education level without
charging tuition fees to students, followed by the explanation in
paragraph 3 stating that: the responsibility of the learning obligation
is the responsibility of the government mandated through central,
regional orders, and cannot be separated from the responsibility of
the community. When there is a government obligation through the
mandate of the law, it certainly has consequences for the government
to provide learning and education services to all students at the basic
education level (elementary / equivalent and junior high / equivalent).
So that the government in 2005 realized the responsibility of financing
at least 9 years of education through one of its programs. The program
is called the School Operational Assistance (SOA) fund.
The SOA program is a service by the government that provides
funding for operational costs for elementary education implementers
as a form of encouraging the implementation of the 9-year compulsory
education program. The SOA fund was originally a form of diversion
of funds for the increase in fuel prices that occurred in 2005, initially
the funds disbursed by the government for this SOA fund amounted to
Rp. 6.2 trillion, which was handed over to all levels of education in the
country. It aims at reducing the burden borne by parents on the tuition
fees of students who are obliged to study for 9 years to bear more
qualified younger generation of Indonesia.
In regards to the implementation of SOA funds, there are still
irregularities in its management, embezzlement and misappropriation
carried out by several individuals. The Audit Board (FAB) found
irregularities in the use of SOA funds in several regions. In 2019, FAB
was able to provide findings that the use of SOA funds was not in
accordance with its designation of Rp108,278,000 in one of the cities
in Indonesia. FAB stated that the deviation was due to the principal’s
lack of optimal management of SOA funds, this was also driven by
the control and supervision of the SOA management team in the city
which was still not qualified. Another finding in 2020, the Indonesian
government’s external auditor also found that there were 153 schools
within one of Indonesia’s other local governments that were suspected
of misappropriating SOA funds with a value of more than Rp170
million (Lokadata, 2020). From the two cases above, misappropriation
activities should be minimized through the implementation of optimal
accountability and transparency at each level of government, agencies,
and schools below. Based on the above problems, this study formulate
a problem on how the implementation and challenges of implementing
accountability and transparency in the financial management of School
Operational Assistance (SOA) funds in Indonesia.
2. DISCUSSION
2.1 Agency Theory
Agency theory explains that agency relationships arise when one or
more people (principal) hire another person (agent) to provide a service
and then delegate decision-making authority to the agent (Jensen &;
Meckling, 1976). Agency theory is used as the main theory because
this theory explains the relationship between the school as the principal
and the community as an agent who gives authority to agents to manage
funds and provide decent public services for the community.
2.2 Good Governance

Referring to opinions issued by the World Bank and the United National
Development Program (UNDP), public sector development is oriented
towards the implementation of good governance. Good governance is
an implementation of strong development management and has a sense
of responsibility that must go hand in hand with various provinces,
namely democracy, prevention of misallocation of investment funds,
and rejection of fraudulent practices, as well as obeying budgets that
are beneficial to the survival of an organization (Mardiasmo, 2018).
Here are the basics of law or principles in good governance:
1. Supervision: Is an action taken by the government to optimize
supervision over the course of development carried out by the
government itself through support from other parties such as the
private sector and society in general.
2. Accountability: Encourage a sense of responsibility for the need for
financial information needed by various parties that is useful for the
decision-making process of all aspects related to the organization.
3. Responsiveness: Stimulates the level of sensitivity of government
organization implementers to input and criticism obtained from the
community as a whole.
4. Efficiency & Effectiveness: Provide guarantees for the delivery
of services needed by the community, by utilizing existing inputs
optimally and full of prudence and responsibility.
5. Professionalism: Encourage the improvement of competence
and ethics of parties involved in decision-making of government
organizations that stimulate the improvement of economical,
efficient, effective service quality.
6. Equality: Creating a fair possibility for all levels of society to
achieve the same point of prosperity.
7. Transparency: Encourage the creation of trust by the public towards
the government with complete information and easy access to
obtain such information.
8. Foresight: Carrying out development that refers to real visions
and strategies and encourages community participation in the
implementation of the wheels of government, this creates a sense
of responsibility that the community has for regional development.
9. Law Enforcement: Implementing upright and fair laws for all levels
of society without exception, prioritizing human rights by obeying
all values in society.
10. Participation: Stimulate the entire community to be able to convey
their aspirations so that it will be useful for decisions taken by the
government that are oriented towards the welfare of the people.
The concept of Good governance is a result of interdependence and
relationships that accommodate all interests of government institutions,
society, and the private sector. Therefore, it requires coordination of
various interested parties for its implementation. This interaction can
only be realized when the government as mandated by the people
implements the principles of accountability and transparency.
According to Mardiasmo (2018), accountability is a necessity
carried out by the party entrusted to account and provide reports, by
disclosing all activities carried out in the context of accountability to
the trustee, and the trustee has the right to the accountability report.
According to the SOA instructions and t-echniques, accountability,
namely the use of Regular SOA Funds, can be accounted for based
on logical considerations in accordance with laws and regulations
(Ministry of Education and Culture of the Republic of Indonesia,
2020).
Accountability is divided into vertical and horizontal
accountability. Vertical accountability is a form of responsibility for
the implementation of activities to parties above the implementer. For
example, financial statements provided by schools to the education
office, local government, and education ministry. While horizontal
accountability is a form of responsibility of an organization to the
people or other citizens as a whole (Mardiasmo, 2018).
According to Ellwood (1993) in Mardiasmo (2018), there are at least
4 important things that must be carried out by public organizations
related to accountability, including:
1. Accountability, Honesty and Legal Accountability. Honesty
accountability is closely related to prevention of misappropriation of
office, while legal accountability is related to ensuring compliance
with law enforcement and other rules that are required in using
state-owned money.
2. Process Accountability: Relates to the procedures carried out in
the implementation of organizational activities whether they meet
the requirements for the adequacy of SIA, driver’s license, and
other procedures outlined by the implementation of economical,
effective and efficient services. Examination and monitoring of the
implementation of this accountability can be through examining the
practice of raising prices and expenses that are not in the budget,
and also finding out where inefficiencies come from which will
lead to high service costs or slow service failures.
3. Program Accountability: Relates to the extent to which a vision and
mission are achieved, and reviews the extent to which alternative
programs leave maximum benefits achieved through minimal
expenditure.
4. Policy Accountability: Closely related to the pattern of responsibility
given by the government for decisions implemented to the
representative council and the people.
According to Boy & Siringoringo (2009) indicators of
accountability in schools include:
1. The school runs the points in the Government Accounting Standards
(SAP) in the preparation of its financial statements.
2. The school reports its financial statements regularly every budget
period.
3. Participation of all interested parties in the preparation of the
Budget Details
According to Slamet in Umi Nur Lailia, (2018) to be able to
assess the success of the implementation of accountability carried out
by schools and assess the implementation or failure of school-based
management, it can be seen through the following aspects:
1. Achieving increased public trust and satisfaction with the
performance of education units or schools.
2. The creation of a community that is aware of its right to participate
in supervising the implementation of SOA funds in schools.
3. Encourage the suitability of programs implemented by education
units with applicable norms and the community.
All the above indicators can be used by education units to evaluate
the extent to which accountability is in accordance with the mandate
of the law. This will be useful to increase the satisfaction of all parties,
including students, parents, schools, and the wider community.
Transparency, according to Ardani (2020) is a candor provided
by the school as the implementer of SOA fund management submitted
to the community as the mandate through accountability reports.
Transparency is mandatory because school financial management is
a milestone in the implementation of quality education, with quality
education and schools, the support of the community, parents, and
government for education providers in Indonesia will be better. There
are indicators that can be used to measure transparency, namely:
1. Policy for making and implementing budgets in schools based on
openness.
2. Making school accountability reports that adhere to the principle of
openness.
3. The availability of means to obtain information precisely,
completely, and easily obtained.
The advantage of this openness is the creation of harmony of
trust between parties, namely the government, parents, students, and
the wider community obtained from appropriate, complete, and easily
obtainable information that can be accessed by all parties.
Regulation of the Minister of Education and Culture of the
Republic of Indonesia Number 8 of 2020 concerning Regular SOA
Technical Guidelines is a strategy issued by the government, in this case
the central government to provide education fee funds for all education
units in Indonesia originating from non-physical DAK. Regular SOA
funds used and utilized by each education unit certainly pay attention
to the principles of school-based management (SBM) which means
that all education units have the right to plan, manage and supervise the
management of their SOA funds depending on the situation that exists
in the education implementing unit. This fund is disbursed, of course,
with the aim that the Regular SOA Fund aims to reduce the burden
borne by parents on the tuition fees of students who are obliged to
study for 9 years so that the younger generation in Indonesia becomes
more qualified (Ministry of Education and Culture of the Republic of
Indonesia, 2020).
The implementation of SOA fund management must adhere to the fol-
lowing principles:
1. Flexibility: budgeting and use of these funds are carried out

according to the situation and conditions of each school.
2. Effectiveness: this grant must be useful and influential in achieving
the vision and mission of the school.
3. Efficiency: this aid fund is at least able to be a driver in order to
improve the quality of student learning, at the lowest cost to achieve
the best results.
4. Accountability: the manager of this aid fund must be able to account
for where these funds roll to the government referring to existing
regulations.
5. Transparency: the manager of this aid fund must be able to
provide complete and easily accessible information, and be able
to accommodate opinions from all interested parties regarding
decision making in schools.
Luthfiati &; Baihaki, (2018) examined the Transparency and
Accountability of SOA Fund Management (School Operational
Assistance) in one of the Madrasah Aliyah in Indonesia. This study
concludes that the implementation of transparency in schools still tends
to be not optimal, it is indicated because there are several statements
in several documents that have not been able to be verified by the
school. The absence of detailed standard operating procedures in the
implementation of fund management is one of the reasons why the
school has not been able to implement transparency. Therefore, parents
and committees have limited access to information because there is
no information posted or announced at certain periods regarding SOA
funds. Another problem was also found that honesty accountability in
schools was not good because of the discovery of mismatches in the
information submitted with printed documents regarding the decision to
provide free learning to students. There still found incomplete process
of accountability indicated by the lack of involvement of parents other
than the committee in making decisions in schools. The discrepancy
between printed documents and oral information indicates deficiencies
in program accountability implementation. In addition, the absence of
SOPs also encourages policy accountability to be not optimal.
Advanced schools can be determined from several aspects,
starting from the quality of good education, and having superior
graduates, having complete and adequate facilities and infrastructure,
reliable and professional educators, and of course having good
financial management. The financial management problem is oftenly
found by stakeholders. This problem arises due to the lack of openness
and responsibility of the school to stakeholders towards financial
statements.
The lack of stakeholder participation in planning activities
and managing school financial budgets is also one of the causes of
the problem. It shows that the school has not applied the principles
of accountability and transparency in school financial management.
However, to overcome this problem, it is necessary to set goals related to
the management of SOA funds in order that stakeholders have openness
and responsibility to obtain information about the source and use of
SOA fund budgets, thus creating accountability for the implementation
of SOA funds. Fund management system and transparency.
There are problems arising from the weak implementation of
accountability and transparency in the management of SOA funds
found in the practice, therefore it needs certain strategy to create the
application of accountability and transparency in the management of
SOA funds, namely by education and training to staff or educators
in the financial sector, there needs to be supervision carried out
directly by the principal and the need for Financial audit at school.
If the implementation of accountability and transparency of School
Operational Assistance (SOA) funds is carried out properly, it will
improve the quality of schools in managing SOA funds. The following
are problems that occur and resolution strategies that can be done along
with the expected results.
Real Conditions Problem Strategy Result
1. Lack of 1. Weak 1. Need education Implementation of

accountability implementation of and training in accountability and
and transparency accountability and school finance transparency in BOS
transparency in the fund management
in drafting, 2. There needs to
management of BOS
implementing, funds to stakeholders be supervision
and evaluating / communities by the principal
2. Lack of involving 3. The need for a
stakeholders in school financial
budget planning audit
3. There is no media 4. Need for
as a tool for increased insight
information about of financial staff
financial
statements. Feedback
Source:
Source: (Lailia,
(Lailia, 2018)2018)
Figure 2.1 Problems and resolution strategies
Figure 2.1 Problems and resolution strategies
3. CONCLUSION
3.
3.1 CONCLUSION
Conclusion
3.1 Conclusion
The SOA program is a service provided by the government that provides
operational cost funding for elementary education implementers as a form of
The SOA program is a service provided by the government that provides
encouraging the implementation of the 9-year compulsory education program. Because
operational cost funding for elementary education implementers as
this program comes from public funds, the concept of Good Governance is needed in its
a form of encouraging the implementation of the 9-year compulsory
management. The concept of good governance is a result of interdependence and
education program. Because this program comes from public funds, the
concept of Good Governance
10 RAMPOURRI | Innovation andisTechnology
neededforin Reformation
its management. The concept
in Public Sector
Finance
of good governance is a result of interdependence and relationships
that accommodate all interests of government institutions, society,
and the private sector. Therefore, to be able to implement this requires
coordination of various interested parties. This interaction can only be
realized when the government as mandated by the people implements
the principles of accountability and transparency.
School accountability can be seen through the accountability
of SOA managers in managing these funds and reporting them in
accordance with existing technical guidelines. Meanwhile, transparency
can be measured through the availability of access to information for all
school stakeholders. Referring to some previous studies that have been
analyzed, there are some schools in Indonesia that apply the principles
of accountability and transparency, but there are still shortcomings
in the implementation of accountability and transparency in several
other schools. Lack of accountability implementation is indicated by
schools that submit accountability reports that do not refer to existing
technical guidelines. Meanwhile, deficiencies in the implementation of
transparency are indicated through information that cannot be easily
accessed by students, parents, and the public.
4. BIBLIOGRAPHY
Ammar, F., &; Bustamam, B. (2019). Analysis of Accountability,
Transparency and Effectiveness of School Operational
Assistance Fund (SOA) Management (Case Study at Smp
Negeri 3 and Smp Islam Ypui Darul Ulum in Banda Aceh
City). Scientific Journal of Accounting Economics Students,
4(1), 116. https://doi.org/10.24815/jimeka.v4i1.10804
Anggraini, R. D. (2013). Transparency, Participation, and
Accountability of SOA Fund Budget Management in the
RKAS Program at SDN Pacarkeling VIII Surabaya. Public
Policy and Management, 1(2), 201–208.
Ardani, E. F., &; Trihantoyo, S. (2020). Implementation of Transparency
and Accountability of School Operational Assistance Fund
(SOA) to Increase Community Participation in Elementary
Schools
Negeri Banyu Urip VIII Surabaya. Journal of Educational Management
Inspiration, Vol.8.
Bastian, I. (2010). Public sector accounting. Penerrbit Erlanggga.
Boy, D., & Siringoringo, H. (2009). Analysis of the effect of
accountability and transparency in school budget management
(APBS) on parent participation. Scientific Journal of Business
Economics, 14(2), 5914. https://doi.org/10.35760/eb.
Halim, A., &; Kusufi, M. S. (2014). Public sector accounting (from
budgets to financial statements, from government to places of
worship. Salemba Four.
Ministry of Education and Culture of the Republic of Indonesia. (2020).
Regulation of the Minister of Education and Culture Number
8 of 2020 concerning Technical Guidelines for Regular School
Operational Assistance. 1–17.
Lailia, U. N. (2018). Analysis of Accountability and Transparency
Principles for School Operational Assistance Fund
Management at SMP Negeri 3 Malang.
Lokadata. (2020). Sri Mulyani reveals the mode of misappropriation of
SOA funds. Https://Lokadata.Id/. https://lokadata.id/artikel/
sri-mulyani-ungkap-modus-penyelewengan-dana-SOA
Luthfiati, L., &; Baihaki, A. (2018). Transparency and Accountability
of SOA Fund Management (School Operational Assistance) at
MA Miftahul Ulum Bettet Pamekasan. Seminar Proceedings
National Economics, Management, and Accounting (SINEMA), 1(01),
212–227.
Mardiasmo. (2018). Public Sector Accounting (Vol.4). ANDI.
Minarti, S. (2011). School-based management: managing educational
institutions independently. Ar-Ruzz Media.
Mulyono. (2012). The Concept of Education Financing. Ar-Ruzz
Media.
Silele E, S. H. & P. R. . (2017). Evaluation of School Operational
Assistance Fund (SOA) Management (Case Study at SD
Inpres 4, Akediri Village, Jailolo District, West Halmahera
Regency)
Evaluation Of Management Of Operational Funt Of Case Study In The
SD Inpres 4 Akediri Village District Jail. Jurnal Emba: Jurnal
Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi, 5(2),
1626–1635.
Sine, E. P. T., Tunti, MAria, E. ., &; Rafael, S. J. M. (2021). Accountability
and Transparency in the Management of School Operational
Assistance Funds (Study on Schools in Kupang City). 9, 1–8.
ARTICLE 10
THE IMPORTANCE OF FINANCIAL
MANAGEMENT
ON EDUCATIONAL FOUNDATION
By:
Siti Mutmainnah
Wahyudin Nor
Rahma Yuliani
1. INTRODUCTION
1.1 Background
One of the public institutions widely established by the community, both
individuals and groups, is the foundation. The purpose of establishing
this foundation is vastly different from the purpose of establishing a
business entity in the private sector, which is not intended to seek profit
or is not commercial (non-profit), so that the foundation is widely used
for educational, social, religious, humanitarian, and other activities.
In Indonesia, foundations have been regulated by the government
based on law number 16 of 2001 as amended by law number 28 of
2004 which explains that A foundation is a legal entity consisting of
segregated wealth and intended to achieve certain social, religious, and
humanitarian goals, which has no members (Republic of Indonesia,
2004). The Foundation as a non-profit entity, in maintaining the
continuity of its operational activities, it can collect funds in the form
of donations from the community, government and donors. Although
donors do not expect to benefit from the funds they have given, the
foundation must be able to show accountability by issuing financial
statements.
However, in fact, the foundation does not carry out activities
in accordance with its purpose, which is not commercially oriented.
Especially foundations engaged in education have received a lot of
criticism that their management leads to profit seeking (commercial).
This is what we find in many large private educational institutions under
the auspices of foundations, not even a few educational institutions
managed are private schools and universities that are famous for being
the elite. The institution receives a large amount of entrance money
and of course balanced with luxurious facilities that are expected by
parents to support their children’s education. Thus, the parents or donors
demand the foundation to be transparent in managing the foundation’s
finances.
Based on this fact, it is the time for educational foundations to prove
that they can be professional, accountable, and transparent. In addition,
educational foundations play a key role in improving the quality of
education through the institutions they manage. To achieve that goal, it
is necessary to have comprehensive institutional management of various
resources in it, and one of them is financial management. Financial
management in this context is finance, the source of operational funds
for educational foundations.
Foundations engaged in education are currently large, it can be seen
from the statistical data of the number of educational institutions in
Indonesia which more than a quarter are managed by private parties
where foundations are the organizers.
Table 1.1 Number of Educational Institutions in 2021
Education Level Country % Private %

SD (Elementary School) 131058 88% 17685 12%
SMP (Junior High School) 23670 58% 16927 42%
SMA (Senior High School) 6899 50% 6966 50%
SMK (Vocational High School) 3629 26% 10449 74%
Boarding School 26975 100%
PT (University) 125 4% 2990 96%
Sum 165.381 67% 81.992 33%
Source: Directorate of People’s Welfare Statistics, (2021); Katadata.id, (2022)
In table 1.1, we can see that the number of educational institutions
from elementary schools to private universities in Indonesia in 2021 is
81,992 with 17,685 elementary school levels, 16,927 junior high school
levels, 6,966 high school levels, 10,449 vocational schools, 26,975
Islamic boarding schools, 2,990 universities and a total percentage of
33%. This data can be used as a reference to the fact that the number
of private educational institutions managed by foundations is also
exceptionally large. So, it is not surprising that there are so many
problems or irregularities committed by the foundation because of
weak financial management at the foundation.
The problems surrounding the finances of educational foundations
that are often faced include poor financial management in this case
reporting that does not meet the standard, lack of human resources (HR)
who understand the ins and outs of foundation finance and taxation
aspects, fraudulent behavior by certain parties from foundation organs,
reduced sources of income due to extraordinary conditions such as a
pandemic that hampers teaching and learning activities, sources of
income that only rely on tuition fees and education money while the
need for greater expenditure funds, the demand for better facilities and
development of facilities and infrastructure and various other problems
that will continue to be faced by the foundation.
Based on this background, the author wants to explain various
things that can be a reference in professional foundation financial
management.
1.2 PROBLEMS FORMULATION

The formulation of the problem in this article are:
a) How is the financial management of educational foundations?
b) How is the financial reporting of educational foundations?
c) What are the taxation aspects of educational foundations?
d) What are some of the challenges often faced by foundations that
manage the education sector?
2. DISCUSSION
2.1 Financial Management of Educational Foundations
The term management linguistically means to organize, manage,
or take care of. Management is defined as a field of knowledge that
systematically seeks to understand how and why an organization works
together to achieve goals and create a system of cooperation that is
more beneficial to humanity (Masruri et al., 2021).
Fedena, (2019)“Financial management is one of the most
fundamental practices in any enterprise or business including schools
and other educational institutes. Financial management means planning,
organizing, directing, and controlling the financial activities in schools so
that the financial resources are used efficiently and effectively. Financial
management ensures that the administration and management team can
manage the budget in a better manner and make informed decisions
related to the school budget”
Financial management is one of the most fundamental practices
in every company or business, including schools and other educational
institutions. In essence, financial management means planning,
organizing, directing, and controlling financial activities in schools so
that financial resources are used efficiently and effectively. Financial
management ensures that the administrative and management teams
are able to manage the budget better, and make the right decisions
related to the school budget (Fedena, 2019).
Based on this definition, it can be concluded that the financial
management of educational foundations is a financial management
activity which includes planning, organizing, directing, and controlling
financial activities in an educational institution so that financial
resources are used effectively and efficiently.
2.2 The Importance of Financial Management in Education Foundations

Financial management in educational foundations is one of the crucial
factors in determining the success of providing quality education,
because financial management plays a role in influencing all aspects.
This will lead to the effectiveness of education management to be carried
out in accordance with the expected vision and mission (Andiawati,
2017). Maximum financial management will be achieved when it is
carried out in accordance with the principles of accountability and
transparency in its implementation.
Through good financial management, the foundation can plan
its programs optimally, in addition to measuring and maintaining the
health of the institution’s financial condition. Some of the following are
the reasons for the importance of financial management in educational
foundations include:
1. Utilization and management of foundation funds are more efficient
and effective.
The higher the effectiveness and efficiency in the financial
management of educational foundations, the easier it will be to
achieve the expected goals.
2. The guarantee of the use of foundation finances is more accountable
and transparent.
Accountability and transparency of financial management at the
foundation will build public trust and loyalty to the institution.
3. 3.
Minimize misuse misuse
Minimize of budget of budget
used used onposts.
on inappropriate inappropriate posts.
Good financial management will encourage better performance so
Good financial management will encourage better performance so that fraud and
that fraud and violations will be easily traced.
violations will be easily traced.
4. Provide convenience for parties who will make policy decisions in
4. Provide convenience for parties who will make policy decisions in the
the development of the foundation. In the financial management
development
cycle ofofthethefoundation,
foundation. there
In thewill
financial
be anmanagement
evaluationcycle
and ofmonitoring
the
foundation,
processthere will be
as well an evaluation
as reporting andwill
that monitoring process asfor
be a reference well as
foundation
managers
reporting that willto
bemake future
a reference plans. managers to make future plans.
for foundation
2.3 Education
2.3 Education FoundationFoundation Financial
Financial Management Management
Cycle Cycle
Planning
Reporting Budgeting
Monitoring
Implementation
and evaluation
Figure 1. Financial Management Cycle of Education Foundations

Figure 1. Financial Management Cycle of Education Foundations
Figure 1 explains the picture of the financial cycle in educational foundations
which begins with the process of planning activities by management, both foundation
Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI
administrators and institutional management. Then proceed with the process of
129
preparing a budget based on the planning of activities that have been prepared. In
Figure 1 explains the picture of the financial cycle in educational
foundations which begins with the process of planning activities
by management, both foundation administrators and institutional
management. Then proceed with the process of preparing a budget
based on the planning of activities that have been prepared. In preparing
the budget, it shall not ignore the 3E principles (effective, efficient, and
economical). After the next budgeting process, the implementation is
related to administration, procurement process, taxation, and accounting
recording process. The next cycle is monitoring and evaluation which
is carried out by internal supervisors or parties responsible for budget
management. Then proceed with reporting, in this case there is an
accountability report prepared by the management of the foundation,
which
is in the form is
of in the form
financial of financial
statements presented statements
in accordancepresented in accordance
with accounting
with
standards. accounting standards.
2.4 Financial
2.4 Financial System
System in Education in Education
Foundations Foundations
Reception
System
Budgeting Reporting
System System
Dispensing
Financial Management
System
Figure 2. Financial system at the Foundation

Figure 2. Financial system at the Foundation
Based2 explaining
Based on Figure on Figure 2 explaining
the foundation's the foundation’s
financial management system, there financial
management
are 2 major system,
systems, namely theresystem
the revenue are 2andmajor systems,system.
the expenditure namely
This theis revenue
system
where the role of and the expenditure
accounting is in managingsystem.
incoming This is where
and outgoing theThen
funds. roleinoftheaccounting
is in managing
system procedures are drawn upincoming
related to theand outgoing
receipt funds.
and expenditure Then in the system
of funds.
procedures are drawn up related to the receipt and expenditure
The sources of funding that can be obtained by educational foundations include: of funds.
1. Government
Funds sourced from the SB or RGB are usually distributed through the
BOS/BOSDA program for schools, and grants for universities.
2. Parent/Guardian
The sources of funding that can be obtained by educational
foundations include:
1. Government
Funds sourced from the SB or RGB are usually distributed through
the BOS/BOSDA program for schools, and grants for universities.
2. Parent/Guardian
Private educational institutions can collect funds through education
fees (SPP) or development funds or the like from parents or
guardians for the development of infrastructure facilities. The
better the facilities desired by parents, the more expensive the cost
will be.
3. Community
Educational institutions can collect funding from the public other
than parents or guardians such as assistance from donations from
social institutions, alumni, financial institutions, and sponsorship
from companies, etc.
4. Self-Help Fund
Educational institutions can get sources of funds from independent
businesses such as canteens, minimarkets, cooperatives, catering
and other events.
2.5 Presentation of Financial Statements of Education Foundations

Financial statements aim to provide information about the organization’s
resources and all activities carried out on them to interested parties.
In general, all legal entities are required to make financial statements
addressed to stakeholders, including foundations, of course, must
make financial statements as a form of transparency or disclosure of
foundation financial information.
The foundation’s financial statements refer to PSAK 45
which since January 1, 2020, has been replaced with ISAK 35. The
preparation of financial statements for non-profit entities is no longer
based on PSAK 45: Financial Reporting of Non-Profit Entities but is
transferred to ISAK 35: Presentation of Financial Statements of Non-
Profit Oriented Entities. In general, the presentation of the financial
statements’ version of ISAK 35 and PSAK 45 does not have significant
differences, but at least there are some adjustments that must be made
by the foundation in presenting the financial statements as follows:
Table 2. Reporting Differences based on ISAK 35 and PSAK 45
PSAK 45 ISAK 35
The report consists of: The report consists of:
(1) Balance 1. Statement of Financial Posi-
(2) Activity reports tion
(3) Cash Flow Statement 2. Comprehensive Earnings Re-
(4) Notes to Financial Statements port
3. Net Asset Change Report
Net asset classification 4. Cash Flow Statement
Consists of unbound, temporary, 5. Notes to Financial Statements
and permanently bound net assets Net asset classification is re-
Activity reports stricted and without restriction
Provides information on income
(–) expenses (=) surplus or defi- Comprehensive Income Re-
cit for the previous year (+) start- port Contains information up to
ing balance (=) ending balance the current year’s surplus or defi-
The Net Asset Change Report cit.
is an alternative only
Other Comprehensive Income Net Asset Change Report Is one
None type of financial statement for
non-profit entities. Other Com-
prehensive Income Other com-
prehensive income is accommo-
dated in the financial statements
of non-profit entities. (Gustani,
2021)
Financial Statement Presentation Format based on ISAK 35
Source: Indonesian Institute of Accountants (2019)
Source: Indonesian Institute of Accountants, (2019)
Source: Indonesian Institute of Accountants, (2019)
2.6 Taxation aspects of educational foundations
The educational foundation in its operations will not be separated from
the taxation aspect. Every incoming fund transaction such as education
funds, funds from the government and outgoing funds such as service
expenditures, goods expenditures, employee expenditures, capital
expenditures each has tax obligations. The tax aspects that must be
considered by the foundation include:(Maulida, 2019):
1. Income Tax (PPh) article 21 is an income tax on the salaries of
teachers and employees, and other services such as architects for the
construction of educational buildings. In this case, the foundation is
obliged to deduct, deposit and report PPh 21 that has been withheld
by the treasurer of the Foundation.
2. Income Tax (PPh) Article 4 paragraph 2 is an income tax from
building construction activities carried out by contractors and other
parties from all construction service activities.
3. Income Tax Article 29 Annual SPT Corporate Income Tax is income
tax from the remaining more foundations which if the remaining
excess is not reused for the needs of building construction and
educational foundation infrastructure after a period of 4 years, the
income tax will be calculated, otherwise if the remaining excess is
used to carry out the construction of buildings and infrastructure,
the foundation must report the Annual Income Tax Return of Zero
Income.
4. PPh Article 23 is income tax on activities that are the object of
income tax, including catering services, vehicle rental, shuttle
services and other services that are the object of article 23 income
tax.
5. This monthly income tax article 25 is an outstanding income tax that
must be deposited regularly a maximum of the 15th of each month
and must report a maximum of the 20th of the following month. If
there is none, it is mandatory to report even if it is nothing.
6. PPh Article 26 if there is an employment of foreigners, it is
mandatory to deduct, deposit and report on the income of individual
foreigners.
This taxation is important for educational foundations, so it is
very necessary for educational foundation managers to understand tax
objects, tax accounting to fulfill the tax obligations of the Foundation.
2.7 Financial Management Challenges of Education Foundations
Every organization or entity must not be separated from various
problems, especially in the management of educational foundations.
The Foundation will face various challenges and problems that come
one after another, especially problems in financial management. This
financial management problem will influence the existence, quality,
and service of education to the community. Therefore, foundation
managers should prepare and detect various risks that will be faced.
Several signs indicating poor financial condition of educational
foundation, include:
a. There are arrears in the rights / salaries of teachers / lecturers and
employees.
b. The elimination of some school / pesantren / University activities
such as extracurricular activities, student activity units and programs
that usually always exist is not implemented.
c. Delayed/incomplete construction activities.
d. Financial Statements that are not transparent.
e. Minus cashflow.
f. Facilities and equipment that do not increase as tariffs increase or
entrance fees that have been increased are estimated to increase in
considerable income.
g. The risk of large debt / financing bills to third parties that are not
predicted based on financial statement analysis.
Management and policy holders must be able to overcome all things
that become challenges for the foundation in the future because it will
affect the quality of education services. Some things that must be done by
the foundation to overcome the above financial problems include:
1. Improvement of Foundation Financial Management
Policymakers must make improvements starting with new human
resources (HR) who have good skills and understanding of finance,
budgeting, and others.
2. New innovations seek income
Education foundations do not have to rely on income from
educational funding sources alone. The Foundation can work with
the government, third parties, individuals, and companies to build
or fulfill school infrastructure.
3. Improved work culture
The Foundation must always increase the motivation of its
employees to always be professional, honest, and trustworthy in
every work. The Foundation has high standards of integrity and
honesty in all financial activities. While policies, job descriptions,
and internal controls help maintain this integrity, they are built on a
foundation of mission, values, and leadership.
4. Internal sources of income
The Foundation can get sources of income from internal businesses
such as teacher/employee cooperatives, catering services, shuttle
services, minimarkets, and others.
5. Education investment cooperation
A foundation’s decision to invest must be based on good analysis.
Cooperation for financing can be an alternative to overcome
financial problems. However, it must be analyzed accurately by the
board of the foundation before deciding.
3. CONCLUSION
Foundations engaged in education are important to implement
their financial management professionally because it will affect the
quality of educational services they provide. Problems in financial
management will always exist in every journey so that the foundation
shall implement the financial management practices correctly that build
stability and flexibility today and in the future. Several aspects need to
be considered include:
a. Planning: Budget planning is important because it provides financial
information to support all planning. Effective budgets are realistic,
using reasonable assumptions and clear accountability to achieve
those assumptions.
b. Financial Information: Each organ of the foundation is expected
to be able to learn terminology, understand and use financial
statements, and ask many questions. Useful information is provided
by trained and respected staff and professionals.
c. Taxation: Each organ of the foundation must understand that there
will be tax obligations that must be fulfilled by the foundation.
Thus, there needs to be a comprehensive understanding of this
aspect of taxation.
d. Financial Responsibility: The responsibility for making financial
decisions and carrying out financial activities is shared throughout
the organization. Responsibility needs to be supported with useful
information, frequent communication, and appropriate authority.
e. Accountability and Transparency: Foundation administrators,
governments, communities, everyone demands information and
answers about how an entity receives and uses financial resources.
This trend is accelerating, and many nonprofits are choosing to
make accountability an important organizational value. (Jackson,
2019)
4. REFERENCES
Andiawati, E. (2017). Financial Management of Educational Institutions
/ Schools. Proceedings of the Seminar on Economics and
Business Education, 1–6. https://jurnal.fkip.uns.ac.id/index.
php/snpe/article/view/10646
Central Bureau of Statistics. (2021). Education Statistics 2021. In
Central Bureau of Statistics.
Fedena. (2019). School Finance Management: How to Manage it
Effectively? https://fedena.com/blog/2019/07/school-finance-
management.html. https://fedena.com/blog/2019/07/school-
finance-management.html
Indonesian Institute of Accountants. (2019). DE ISAK 35: Presentation
of Financial Statements of Non-Profit Oriented Entities.
Indonesian Institute of Accountants. www.iaiglobal.or.id
Jackson, S. (2019). Twelve Golden Rules of Nonprofit Finance.
Nonprofit Essentials Conference, 55414.
Katadata.id. (2022). There are 26,975 Islamic boarding schools in
Indonesia, in which province is the most? https://databoks.
katadata.co.id/datapublish/2022/01/31/ada-26975-pesantren-
di-indonesia-di-provinsi-mana-yang-terbanyak
Masruri, M., Ali, H., &; Imron Rosadi, K. (2021). Financial management
in maintaining the quality of Islamic boarding schools during
the Covid-19 pandemic. Journal of Applied Management
Sciences, 2(5), 644–657. https://doi.org/10.31933/jimt.
v2i5.573
Maulida, R. (2019). Get to know the Tax Aspects of Education
Foundations in Indonesia. https://www.online-pajak.com/
tentang-pph21/pajak-yayasan-pendidikan
Republic of Indonesia. (2004). Amendments to Law Number 16 of 2001
concerning Foundations. In Law of the Republic of Indonesia.
ARTICLE 11
CONTINUOUS AUDITING DAN COUNTINUOUS
MONITORING (CACM): TRANSFORMATION OF
PUBLIC SECTOR SUPERVISION IN THE DIGITAL
AGE
By:
Dwi Puspita Sari
Wahyudin Nor
1. INTRODUCTION
1.1 Background
Currently, the role of the Government Internal Supervisory Apparatus
(GISA) as the internal auditor of the public sector has changed. Not
only as a watchdog that supervises compliance with regulations, and
a catalyst that provides advice to be able to carry out best-practices,
but also as a strategic partner and trusted advisor for government
management to be able to improve effectiveness in achieving goals.
The development of globalization, the complexity of regulations,
the pressure of people’s needs and rapid changes in government
conditions, cause higher management responsibilities and the
emergence of various risks that can threaten the achievement of goals.
Management in public sector organizations must respond appropriately,
so as a strategic partner and trusted advisor, GISA must be able to
provide added value and accurate and fast information to management,
whenever the information is needed.
Technology can be used to accelerate the flow of information
and expand the reach of its dissemination, including to public
sector organizations in Indonesia. We have become accustomed to
information technology-based systems within government agencies,
such as e-budgeting, e-payment, e-procurement, etc., Interaction costs
can be reduced through this type of technology.
In 2016, in the National Seminar of AAIPI (Association of Internal
Auditors of the Government of Indonesia), there was a discussion
about one of the innovations in the field of supervision called CACM
(Continuous Auditing and Countinuous Monitoring). CACM is a form
of transformation that can be carried out by GISA and management by
utilizing technology, which aims to provide solutions to weaknesses
and gaps in the traditional supervision process. Continuous Auditing
is carried out by GISA and Countinuous Monitoring is carried out by
management in public sector organizations. These two concepts are
inseparable, and their application would be ideal if it is done together.
CACM can be a tool for capability improvement, both management
and GISA. Until now, the culture commonly used in Indonesia is post
monitoring and post audit. CACM is a continuous audit and monitoring,
where supervision is carried out continuously, on all stages of public
sector management, from the planning process to reporting.
The concept of CACM is still relatively new in Indonesia, and
has not been widely known by public sector organizations. With this
background, the problems that will be presented in this paper are: what
is the description of the concept and application of CACM, how CACM
relates to the Three Lines Model and whether CACM can be used to
maximize the function of effectiveness and efficiency in Indonesian
public sector organizations.
2. DISCUSSION
2.1 Agency Theory
Agency theory defines an organization as a set of contracts between
resource owners, called principals, and managers of resource use and
control, called agents. There are two problems that can occur due to this
agency relationship. The first problem is the occurrence of information
asymmetry, which is because the principal has more information than
the agent. The second problem is the conflict of interest caused by
misaligned goals between principals and agents (Jensen &; Meckling,
1976).
Information asymmetry and misalignment of objectives are
two problems expected to be addressed with continuous auditing and
monitoring (CACM). CACM can provide data transparency for all
processes, activities and transactions carried out. All interested parties
can also ensure all processes remain in line with organizational goals.
This continuous audit and monitoring must be supported by useful
information technology governance to ensure quality, reliable, accurate
and fast data availability. The more reliable the data generated; the
more informed decisions made based on that data will be.
2.2 Internal Auditor Transformation

Internal auditors come from government organizations that have the
authority to conduct independent assessments as a form of service to
the company. The assessment carried out is related to the accuracy,
reliability, efficiency, and accuracy of the records, activities, and control
of the organization. The aim is to assist management in carrying out
their responsibilities, in this case by providing analysis, assessment,
suggestions, and comments on the activities being audited (Lusiana et
al, 2016).
To perform their responsibilities, internal auditors perform the
following activities:
1. Examine whether the implementation of operational control
systems is adequate and develop alternative controls that are more
effective.
2. Ensure existing policies are adhered to, as well as the organization’s
plans, procedures, and operational standards.
3. Ensuring accountability for the use of company assets, to avoid all
forms of abuse and fraud.
4. Manage the data that your organization collects and owns.
5. Assess work in the organization based on quality standards and best
practices.
6. Suggest recommendations for improvement for efficiency and
organizational effectiveness.
It can be concluded that the internal auditors focuses on fraud
prevention, fraud detection and investigation. The Indonesian
government has several internal auditors, such as:
1. Financial and Development Supervisory Agency (FDSA)
The Financial and Development Supervisory Agency was
established by Presidential Decree to report to the President in
matters of internal audit of the central government.
2. Inspectorate General of Ministries/Supervision Unit of Non-
Government Institutions
Department, as internal auditors in charge of their respective
institutions.
3. Provincial/District/City Inspectorate is an internal auditor within
the local government.
4. Internal Audit Unit at State-Owned Enterprises (SOEs)
Internal auditors continue to transform from time to time.
Transformation comes from English, namely ‘transform’ which means
change for the better. These changes can occur gradually to a certain
expected stage, due to a response to internal and external influences.
Based on the Presidential Decree of the Republic of Indonesia
Number 31 of 1983 concerning the Financial and Development
Supervision Agency, in the period 1983 – 2000, audit activities were
the main assignment of internal auditors. The implementation of the
watchdog’s role is carried out objectively and effectively, focused on
obedience.
The function of the watchdog has shifted with the issuance of a
Presidential Decree of the Republic of Indonesia Number 103 of 2001
concerning the Position, Duties, Functions, Authorities, Organizational
Structure, and Work Procedures of Non-Departmental Government
Institutions. In the period 2001 – 2013, GISA acted as a catalyst and
consultant, to take a preventive approach and coaching.
From 2014 to 2022, with the enactment of Presidential Regulation
of the Republic of Indonesia Number 192 of 2014 concerning the
Financial and Development Supervision Agency, GISA transformed
into a trusted advisor. Trust and grand expectations from stakeholders
require GISA to produce relevant, quality, and fast supervision, so
that the results of supervision can be relied upon by decision makers.
The effectiveness of this internal audit role requires constructive
collaboration with elements of management.
The level of maturity of the organization and internal audit unit
proposed by Pitt (2014) is the highest level achieved if audit activities
have been structured, systematic, can meet the expectations of
stakeholders and focus on strategic priorities (embedded). In addition,
audit activities should be a superior service in the organization. With
the use of innovative technology, data is carried out collectively and
all human resources have been experts and experienced in operating
it. This phase can only be achieved when there is intensive interaction
between humans and machines.
2.3 Continuous Auditing Concept

Continuous Auditing according to (Rezaee et al., 2018) is a
comprehensive auditing process using electronic media to process
data continuously and simultaneously, to produce a level of quality
information assurance and disclosure.
The Global Technology Audit Guide (Coderre, 2005) defines
continuous audit as a method to identify and analyze the entire process
of business activities presented through data using technology. The
scope of continuous audit objects is wider than traditional audits, so it
can allow more thorough identification of findings. However, it should
be underlined that continuous auditing does not abolish traditional
auditing, but rather become a collaboration to facilitate data needs.
The difference between continuous audit and traditional audit can be
illustrated in the following table:
Table 1 The Difference Between Traditional Audit and Continuous Auditing
Traditional Auditing Continuous Auditing

Retrospective (cyclical) Continuous
Audit focus on all used transactions Audit focus on irregular transactions
and stacks and professional judgment
Period evaluation Continuous assessment
Testing takes longer Testing made faster
Limited sample of transactions Retrieval data population get Max-
imized with the help of application
data
Source: Global Technology Audit Guide (2005)
The benefits of continuous audit include increasing the ability
to mitigate risk, reduce costs in conducting internal control, improve
financial capabilities, improve financial operations, and reduce errors
in financial activities and the potential for fraud. Continuous audit can
provide early warning of unusual activity, so that it can be followed up
immediately to avoid greater risks that can occur.
Steps for implementing continuous audit according to Global
Technology Audit Guide (Coderre, 2005) are:
1. Establishment of audit strategy
The establishment of an audit strategy requires coordination with
management as the risk owner and risk supervisor. This coordination
aims to set priorities and obtain management support. The results
of this coordination serve as a basis for adjusting the audit plan and
the specification of continuous audit indicators .
2. Routine data acquisition
Routine data acquisition requires access permissions from
management. This data will be used to analyze management
capabilities and determine continuous auditing techniques.
The auditor must validate the reliability of the data.
3. Determination of audit indicators
Determination of continuous audit indicators is carried out by
assessment and risk control. At this stage, the key controls and risks
that can occur in the achievement of goals are determined.
4. Reporting of audit results and recommendations.
The reporting phase in continuous audit is built from an iterative
methodology (review, analyze, recommend, record and monitor
follow-up. The results of continuous audits are used as a basis to
facilitate sustainable management decisions, and then continuous
monitoring is carried out with adjustments to the audit strategy if
there are changes in management conditions.
2.4 Continuous Monitoring Concept

Continuous monitoring is defined as a feedback mechanism by
management to ensure the running of the operating system and
transactions in accordance with the set objectives (Sarwar et al., 2010).
The benefits of continuous monitoring are improving management’s
ability to identify and control problems, reducing the possibility of errors
and fraud, increasing operational efficiency, reducing overpayments,
and increasing stakeholder satisfaction related to quality and integrity
services.
According to Lusiana et al (2016), the success of public sector
organization management cannot be separated from its three main roles
in society, namely:
1. The party that sets all regulations. Without good and effective
regulation, there will be chaos and inequality in society.
2. Guarantor of the smooth implementation of the regulations made.
3. Control and supervision of all public activities.
Viewed from these three roles, the implementation of monitoring
the condition of sustainable communities is an urgency to achieve the
ideals of good governance.
2.5 Application of Continuous Auditing and Continuous Monitoring

(CACM)
The challenge of implementing CACM is adaptation. Management
and GISA must be able to read, collect, and analyze data generated by
applications. Application integration is not easy, especially in limited
supporting infrastructure. In addition, creating structured data to be
compiled and integrated will take a long time.
Factors that can affect the application of Continuous Auditing and
Continuous Monitoring at the same time according to (Vasarhelyi et
al., 2006) include:
1. Management support
This factor is crucial in influencing the decision to implement
CACM, because it is related to consent and permission in providing
data access.
2. Human Resources Competence
The development of CACM is closely related to the use of several
technological tools and digital data. Of course, the success of its
implementation will depend on the competence of adequate Human
Resources.
3. Benefits and Costs
CACM can be adopted if it is based on the results of management
considerations, and the benefits generated outweigh the costs.
4. Regulatory support
The existence of regulations that become CACM mandatory
standards will help overall implementation.
The concept of CACM requires a combination of utilizing
technology and available human resource capabilities. The relationship
can be illustrated in the following figure:
Figure 1. The Concept of Using Technology in CACM (Ferianto, 2020)
a. Data Input
In the data input stage, important data will be carried out related
to the latest conditions. After being collected, cleansing, and giving
certain codes will be carried out, thus the data can be processed and
analyzed.
b. Data Analysis
The input data is analyzed through analysis types like descriptive,
diagnostic, predictive, and prescriptive analysis. Descriptive
analysis is an effective visual view to infer ‘what happened’.
Analysis is usually in the form of data collection or dashboards.
Diagnostic analysis utilizes the results of descriptive analysis to
infer ‘why it happens’. In this phase, data connectivity is studied
to identify patterns of connectedness. Predictive analytics is used
to make logical predictions of future possibilities. The models are
generally accurate statistics for the quality of prediction results.
And prescriptive analysis integrates all previous analysis results for
action and decision making.
c. Data Output
The output of data analysis is a dynamic infographic for data users,
so that any interest in sorting, comparing, seeing trends, and making
basic decisions can be done.
d. Utilization
The output will be utilized as a source of strategic step making.
In short, the implementation of CACM in Indonesia can be done
if there are tools, for example the Siswaskeudes application (Village
Financial Supervision System), developed by FDSA for supervision of
village financial management. Overseeing 75,000 villages in Indonesia
is certainly impossible if done traditionally. Through the Siswaskeudes
application, GISA can perform computer-based audit techniques with a
risk approach, and because the process documentation and supervisory
results are systematic and neat, CACM can be carried out. CACM can
facilitate the supervision of village management by GISA.
According to Putro and Pertiwi (2020), the stages carried out for
the implementation of CACM through Siswaskeudes begin with the
audit planning stage. This stage is in the form of a database connection
to compile the siswaskeudes database. Then fill in the risk factors to
determine priority villages, and the determination of these villages will
affect the number of audit and monitoring teams set. The second stage is
the implementation of audit and monitoring, in the form of preliminary
surveys, internal control testing and substantive testing. Then the third
stage is the collection of findings and reporting of supervisory results.
Another example of the implementation of CACM in Indonesia is
also carried out by Bappenas, using the SIMBAR (Payment Information
System) application. The initiation of SIMBAR began in 2012, when
the SIMBAR application was only a payment application. In 2018,
SIMBAR is also used as an application for monitoring that can be
integrated with other applications such as SILAYAR (Payment Track
Integration System), attendance applications, salary applications, tax
applications and e-Audit applications.
2.6 CACM and Three Lines Model
CACM is closely related to the concept of the Three Lines Model,
which is a model that distinguishes organizational functions into
three parts into first-layer defense, namely risk owners, second-layer
defense, namely functions that handle risk, and third-layer defense,
namely parties that guarantee independently (The Institute of Internal
Auditors, 2020).
1. First-Tier Defense
First-layer defense is implemented by functions that are the
organization’s spearhead and front line. In this case, this function is
expected to be able to:
a. Ensure the availability of a conducive organizational control
environment
b. Implement policies related to risks that arise when their roles and
responsibilities are done to achieve objectives. Policies must be
created, and risk factors must be considered in decision making.
c. Able to demonstrate effective control implementation in
organizational units and monitor the transparency and
effectiveness of internal control.
2. Second-Tier Defense
Second-layer defenses are implemented by functions that manage
risk management.
The functions of this second-layer defense are:
a. Responsible for developing the implementation of organizational
risk management.
b. Supervise the functions of the organization carried out in the risk
policy and ensure that all procedures and operational standards
have been established by the organization.
c. Monitor and report the results of riiko related supervision
to management who have the highest accountability in the
organization.
3. Third Layer Defense
Chemical defense is carried out by auditors, who are independent of
the company’s organizational activities. This function is expected
to:
a. Conduct periodic evaluations and reviews of the establishment
and implementation of comprehensive risk management.
b. Ensure first and second tier defenses run in accordance with the
provisions and objectives set by the organization.
In the Three Lines Model, GISA as a third layer of defense must be
able to provide continuous auditing. Meanwhile, management and risk
management as the first and second defense must carry out continuous
monitoring. Continuous monitoring is carried out to ensure effective
business policies, pprocedures,and processes.
2.7 CACM FOR EFFECTIVE AND EFFICIENT ORGANIZATION

According to Lusiana, et al. (2016) some innovations that must be
carried out related to the effectiveness and efficiency of government
include:
1. Trimming too much structure and practice, to increase organizational
productivity in an efficient way. It can be done by prioritizing
through risk measurement.
2. Creating accountability units as delegates of authority to organize
and manage resources.
3. Making decisions quickly by utilizing reliable information systems.
4. Fostering high awareness of the importance of non-financial
performance measurement, for outcome optimization.
CACM can support the achievement of these innovations. As its
definition, CACM is a function carried out with a continuous,
comprehensive, and continuous process using information technology
as a driving milestone in an organization. Unlike traditional habits
that still use manual systems and rely on direct observation activities,
CACM uses automation and provides benefits in terms of performance
improvement and time saving (efficiency).
Hiererra & Sarayar (2014) describe the impact of surveillance
with traditional methods compared to using CACM. The figure presents
audit visit data and its effect on the effectiveness of supervision. In
traditional (conventional) audits, supervision’s effectiveness increases
after a visit, but after some time it will decline again between the audit
visits. This is due to the human tendency to return to habits when
feeling monitored.
(Hiererra &; Sarayar, 2014, developed personally by the author)
Figure 2. The Effect of Traditional Auditing on Organizational Effectiveness
At CACM, the surveillance period is continuous.. All problems

can be detected quickly, and can be corrected accurately on the spot.
CACM makes management auditors and supervisors more often
contact the object under supervision. According to Hiererra &; Sarayar
(2014), the advantages of using CACM includes:
1. Reducing waiting time
2. Supervision can be carried out when there are control gaps
3. Surveillance can be done by examining the population, without
having to increase the costs incurred.
4. Surveillance has more alternatives, because it is not constrained by
the time and resources of the examiner.
Indeed, it will make the effectiveness of the organization increase,
as shown in the following figure:
(Hiererra &; Sarayar, 2014, developed personally by the author)
Figure 3. The Effect of CACM on Organizational Effectiveness
3. CONCLUSION
The development of globalization, the complexity of regulations, the
pressure of people’s needs and rapid changes in government conditions,
cause higher management responsibilities and the emergence of various
risks that can threaten the achievement of goals. Management in public
sector organizations must respond appropriately, so as a strategic
partner and trusted advisor, GISA must be able to provide added
value and accurate and fast information to management, whenever the
information is needed. Innovation is needed in the form of an auditing
process that comprehensively uses electronic media to process data
continuously and simultaneously, to produce a fast and quality level of
information disclosure. CACM is one workable solution.
Unlike traditional habits that still use manual systems and rely
on direct observation activities, CACM uses automation and provides
benefits in terms of improved performance and time savings. The
advantages of using CACM in terms of efficiency include reducing
waiting time, surveillance can be carried out when there are control gaps,
surveillance can be done by checking the population, without having
to increase the costs incurred, and supervision has more alternatives,
because it is not constrained by time and inspection resources.
4. BIBLIOGRAPHY
Coderre, D. (2005). Continuous Auditing: Implications for Assurance,
Monitoring, and Risk Assessment. Global Technology Audit
Guide, 3, 1–33.
Ferianto, T. (2020). The Urgency of CACM Implementation
During a Pandemic: A Scenario. Bureaucrats write. https://
birokratmenulis.org/mendesaknya-implementasi-cacm-di-
kalapandemi-sebuah-skenario/
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ARTICLE 12
DOES RGIS “REDUCE” OR STRENGTHEN
THE BUDGET FUNCTION OF THE RLA?
By:
M. Khaidir Rahmatullah
Shaiful Hifni
Kadir
1. INTRODUCTION
1.1 Background
The use of digital technology as a means of facilitating the delivery
of local government information widely to the public, especially in
the preparation of regional revenue and expenditure budgets (RGB) is
the hope of current government managers to create accountability and
standards for all regions. A local government information system is
needed that has an integrated work system from the planning process to
reporting so that it can support the performance of local governments
in the implementation of development.
Changes that occurred after the reform in the implementation
of development and governance were marked by the shift of the
government system from a centralized to a decentralized system, the
planning mechanism from the previous top-down to bottom-up. These
changes give broad authority to local governments and parliaments in
managing development in accordance with the region’s characteristics
and the needs of the local community. One of the authorities possessed
by local governments and Regional Legislative Assembly (RLC) is
through the preparation of the regional budget either purely or through
changes. The budgeting function of the RLC is contained in the latest
Local Government Law Number 23 of 2014 in the form of preparing
and determining the Regional Budget with the Regional Head.
The implementation of the latest regional financial management
system with the issuance of Government Regulation Number 12 of
2019 concerning Regional Financial Management which covers all
aspects of activities starting from planning activities, implementation
activities, administrative activities, reporting activities, accountability
activities to activities related to regional financial supervision. The basic
thing that underlies this regulation change is the obligation to local
governments in providing information related to financial management
to the community, the implementation of an electronic-based
government system (EBGS), and the obligation of local governments
in presenting consolidated financial statements and financial statistics
both at the provincial and district / city levels. More specific regulations
in describing the wishes of the government to regional governments
on the management of regional development information, regional
financial information and other regional government information that
are interconnected with one another are regulated through Permendagri
Number 70 of 2019 concerning the Regional Government Information
System (RGIS). Based on the regulation, RGIS is built and developed in
producing interconnected and integrated local government information
services based on electronic systems.
The RLC as one of the elements of local government
implementation together with regional heads, becomes the user of the
system to implement and input the main thoughts of the RLC to help
propose programs and activities that are aspirations of the community.
RGIS is a system that can facilitate the stages of proposing programs
and activities and assist in selecting activity programs based on priority
scales in accordance with predetermined targets and missions.
The complexity in the process of preparing the Regional Revenue
and Expenditure Budget (RGB) is something that is often encountered,
especially the problems in an annual RGB cycle, namely the budget
political process in regional legislatures, in this case the RLC. The
RLC which has a budget function in accordance with its authority has
the right to participate in the process of proposing activity programs
which will later be formulated into the RGB based on the results of the
recess implementation and aspirations submitted by the community in
accordance with their needs.
RGIS, as a regional development system that has been determined
by the government, is also used by the RLC to input the results of
aspirations that have been conveyed by the community in the form
of RLC ideas. In its implementation, many obstacles were faced that
caused the budget function that should be the right of the RLC not
to be properly accommodated in the information system used. This
has always been a recurring problem so that it becomes an obstacle in
the discussion stage carried out between the RLC and the RGB Team
(RGB-T). The RGIS, which was supposed to function as a network in
collecting RLC main ideas to be inputted into local government planning
documents, was not running optimally and was not in accordance with
the expectations of the RLC. Many aspirations have previously been
inputted into the system but only a small part can be accommodated
into budget planning documents.
Based on the above understanding, the author would like to
explore further related to the role of the budgeting function attached
to the RLC both personally and institutionally when the RGIS has
been fully implemented by the Regional Government in the series of
financial management in the regions. This is the basis for writing this
article after explicatively in the field often sees arguments between the
RLC and the Regional Government Budget Team when the points of
thought that have been conveyed by the RLC to local governments
through the RGIS are relatively low in percentage value, so whether
the existence of the RGIS can strengthen the RLC’s budget function or
even “reduce” it?
2. DISCUSSION
2.1 Budget
A budget is a detailed list or question related to receipts and expenses
needed at a certain time (Nurcholis, 2005). Abdullah (2006) Explain
that the budget is the main tool of the government in implementing all
promises and policies into concrete programs that are integrated into
the planned steps, the results to be achieved, at what cost and who will
pay the costs.
One important aspect in the implementation of decentralization
and regional autonomy is the budget issue (RGB) and financial
administration. Therefore, the role of the RLC is large to control regional
financial policies or RGB that are economical, efficient, effective,
transparent, and accountable (Nisa in Memed Ronsumbre, 2019). Many
things can also cause problems and weaknesses in regional financial
management from the aspect of legislative institutions, namely the low
role of the RLC in the entire budget process or cycle starting from
planning, implementation, reporting to supervision of executive work
programs, in this case local governments (Mustika Dewi, 2011).
One of the tools of local governments in providing public
services and encouraging community welfare is through the Regional
Budget (Wijaya, 2004). The RGB must be based on the community’s
aspirations and needs so that the development programs run by the
Regional Government are on target in their aim of providing welfare
to the community. The community’s aspirations should be the basis
for planning development programs, one of which comes from the
results of the RLC’s aspiration network when it descends directly to its
constituency.
Law Number 23 of 2014 Regarding Regional Government,
article 96 paragraph (1) mentions 3 (three) functions owned by the
RLC, namely the function of forming regional regulations, budgeting
functions and supervisory functions. All these functions must certainly
be carried out as a representation of the aspirations of the community
that have been received. Regarding the budget function, the RLC as a
representative institution of the people and one of the administrators
of local government is required to act in accordance with existing
mechanisms and regulations and prioritize the interests and aspirations
of the community. A budget may present a conflict regarding which
preferences should be met. People often cannot talk about budgets well
without considering which parties will benefit, so there is a hidden
background in a budget policy, time span and calculation method
which all have political implications indeed.
According to Bowman C, Kearny (2003) In Pratiwi (2010) there
are 4 (four) roles in the budgeting process, namely the official agenda,
interest groups, legislative bodies, and chief executives. Interest groups
act as executors of a testimony or testimony against budget hearing
by putting pressure on the other three roles to be able to support the
policies and programs they want. The agency’s role is to maintain the
baseline number of forecasts for the previous fiscal year by suggesting
innovative programs or improvements to a program. What many
agencies do is to evaluate the fiscal-political environment. The chief
executive or in this case the regional head has a slightly different role
in the budgeting process, the regional head acts as an adjuster between
the amount of the budget and program priorities. Proposals from the
agency should be adjusted to the targeted revenue to be achieved. Often
the amount of budget proposed by the agency exceeds the estimated
revenue that will be obtained by a region, therefore experienced regional
heads understand very well that proposals received tend to have been
exaggerated to avoid cuts. Furthermore, the last role, according to
Bowman, is the legislature. The legislature at the initial stage has a role
to respond to what the regional head conveys and adjust revenue targets
and expenditure allocation plans. In the next stage, the legislature also
can propose programs of activities that are in accordance with the
results of the aspiration network of constituents.
2.2 RLC Budget Function

The form of the RLC’s budget function is not only in terms of
discussion, but also manifested in the form of mutual agreement on
the draft regional regulation on the Regional Budget that has been
submitted by the Regional Head. In optimizing the budget function,
the RLC forms a budget body which is a completeness of the council
which one of its tasks is to provide suggestions and opinions in the form
of the main thoughts of the RLC to regional heads as input in preparing
the draft RGB before the local government work plan is determined
(Government Regulation Number 12 of 2018).
The implementation of the functions attached to the RLC is
influenced by several factors, one of which is the means. The means
used by the RLC in carrying out budget functions include the right
to provide suggestions and opinions contained in points of thought
through an information system that has been uniformly applied to all
regions.
Indications for the RLC that has implemented its budget function
well lie in the substance of the agreed RGB approval, not in the processes
and mechanisms carried out. The agreement includes alignment with
the public interest which is reflected in the extent to which the results
of aspiration screening have been accommodated in the RGB, the
amount of public spending is greater than apparatus expenditure and
how the RGB has reflected efforts to achieve the vision and mission of
the local government set. The next indication is how the RGB that has
been given approval from the legislature has referred to a performance-
based budget, no longer a budget that prioritizes a balance of revenue
with realized expenditures.
Budgeting has at least 3 (three) stages, namely first formulation of
budget proposals; second endorsement of budget proposals; and third
budget implementation becomes a product of Samuel’s law (2020) in
(Abdullah, 2006). In the contrary, Von Hagen (2002) explained that
budgeting is divided into 4 (four) stages, namely the first executive
planning; second, legislative approval; third, executive execution
and last Accountability. Of the four stages, the first 2 (two) stages
require an interaction between the executive and the legislature in its
implementation, while the last 2 (two) stages only involve the executive
or bureaucracy that acts as an agent.
The main thoughts of the RLC are obtained from the results of the
networking of aspirations for the community or in the form of council
recess activities scheduled for 3 (three) times in each session period.
The results of these aspirations become material in the formulation
of activities, locations and target groups that are aligned with the
achievement of development targets set in the RPJMD regional
regulations. In accordance with Permendagri Number 86 of 2017, the
points of thought of the RLC that have been prepared are submitted
in writing to the local government through the head of the Regional
Development Planning Agency.
The main thoughts of the RLC are formulated in a list of problems
that have been given signatures by the RLC leadership and submitted no
later than 1 (one) week before the implementation of the development
planning deliberations of Regional Government Workplan through
e-planning for areas that already have RGIS.
2.3 The role of RLC in the budgeting process
The role of the legislature in preparing the budget in recent decades is
considered to have increased, It can be seen from the regulations that
encourage the active role of the RLC to participate in providing points
of thought and input to regional heads in the form of suggestions and
opinions in the discussion of the general budget policy (GBP), setting
the priority of the budget ceiling (P-BC) followed by input given in
the context of drafting regional regulations on Pure RGB as well as
amendments and draft regional regulations on accountability for the
implementation of the RGB.
From this authority, it shows the strategic role of the RLC in the
budgeting process, but in its implementation this role does not work
as expected. The budget prepared still seems executive centric or still
shows dominance from the executive in determining the program
of activities allocated to the budget. Many of the activity programs
proposed by the RLC are based on aspiration screening when they
go to the constituency, it is “fall” when input is made into the RGIS
application with various information. This triggers conflicts that
always recur in every budgeting cycle between the legislature and the
executive so that the political process that runs always experiences
obstacles.
Inside theory agency Explained the tendency of the parties
involved in budgeting to maximize their utility in terms of allocating
resources to the established budget (Magner, 2015). The executive as
an agent acting as a proposer or user or implementer of the budget seeks
to maximize the amount of the budget, as well as the legislature which
has the authority in the budget discussion process also encourages the
same desire that the proposals for the program of activities submitted
can be accommodated in the budget document. The points of the RLC’s
thoughts conveyed also often experience delays and the language in the
main ideas is not well understood by the executive, causing problems
that become a new chapter in the budget discussion process.
The RLC, which gives authority to the Budget Agency to conduct
discussions with the RGB team (TAPD), feels that the executive does
not want to be open in the budget preparation process, especially to the
proposals submitted by the RLC through its principles. The RLC feels
that the main ideas submitted is only limited to fulfilling the budgeting
cycle mechanism and is not in accordance with the expectations of the
RLC as a representative of the voting community who also have the right
to propose programs and activities based on the aspirations received.
2.4 Regional Government Information System (RGIS)

The Regional Government Information System (RGIS) reflects
the realization of public information disclosure by the government
which guarantees that every citizen can access it in accordance
with the mandate of Law Number 14 of 2008 concerning Public
Information Openness. The main objective of RGIS management is
that regional information can be carried out professionally both on
regional development information and information related to regional
finances including planning and budgeting. In addition to regulations
on information disclosure, the development planning process which
is mandated by Law Number 24 of 2004 concerning the National
Development Planning System finally spurred the creation of a
regulation that is expected to regulate technically the management
of information systems in an integrated and electronic-based manner
that can produce accurate and integrated data from the regional to the
central level through Permendagri Number 70 of 2019.
According to Nurwani (2021) The RGIS developed by the
government contains regional development information, regional
financial information and other information related to regional
government. In the regional development information group, the
ability of RGIS in managing data and information related to regional
development planning cannot be separated from several related
elements. RGIS can facilitate the preparation of RPJPD, RPJMD,
RKPD, Regional Government Strategic Plan, and Regional Government
Work Plan so that analysis and profile of regional development plans
and implementation can be obtained easily and are able to provide
a basis for updating regional development data and information. In
addition, information related to geographical conditions, resource
potential, demographics, regional economic and financial conditions,
public services, community welfare and matters related to regional
competitiveness can be accessed from the RGIS.
Furthermore, the benefits that can be obtained in RGIS related to
regional financial information are its ability to manage regional financial
data more effectively and efficiently while adhering to the principles
of accountability and transparency. The financial management of the
region includes:
a. Regional Budget Planning
b. Regional Financial Implementation and Administration
c. Regional Financial Accounting and Reporting
d. Regional Financial Accountability
e. Local Property Liability
f. Other Regional Financial Information
The rampant practice of misuse of regional financial management
authority can be minimized by the existence of RGIS that is applied
appropriately and professionally. Furthermore, the coding and budget
items are mapped in detail during the planning process to produce
accurate and fast reporting.
The use of uniform activity codes and budget posts for all regions
in Indonesia helps accelerate the integration of regional financial data
with existing information systems at the central level, especially in the
preparation of reliable accountability reports.
Other general information facilitated in the RGIS is related to
the administration of government. The information is a Report on the
Implementation of Local Government (LPPD) within 1 (one) year,
regional regulations along with other general information managed by
related parties and elements.
2.5 RGIS in the Implementation of the RLC Budget Function

Optimization of the role of the RLC as a channel for the aspirations of
the community should be carried out optimally with the publication
of the Regional Government Information System (RGIS). RGIS is an
application built by the Government uniformly in the management of
regional development information, regional financial information and
local government information that are mutually integrated and used for
the implementation of regional development. The RLC as an element of
local government administration is interested in following the process
and mechanism of regional budgeting to channel the aspirations of the
community towards the programs and activities that will be included
in the budget document.
The RLC must absorb, collect, accommodate, and follow up the
aspirations of its constituents or voters. The recess period became a
forum for the community to meet with people’s representatives who
had been elected in previous legislative elections to convey various
problems and complaints about the course of development in the region
which would later be material in the preparation of the main thoughts
of the RLC. As voters who have representatives in the RLC, the public
has the right to participate in the decision-making process through a
predetermined mechanism. Recess is an official mechanism that allows
community participation through the RLC. One of the forms of follow-
up to the acceptance of these aspirations is through the program of
activities contained in the regional budget document.
In the implementation of the RGIS which is associated with the
budget function of the RLC, it is still in the adjustment stage. Since the
issuance of the regulation on RGIS in 2019, the process of planning
and budgeting of local governments using the system, is effective
only for the 2022 budget cycle, although in 2021 it has begun to be
disseminated to related parties, one of which is the RLC as an essential
element in the regional budget planning process. During the period,
the RLC still considered that the RGIS “reduced” its budget function
because many factors caused the non-accommodation of proposals
from the results of community aspirations through the RLC into the
budgeting document, for example is the South Kalimantan Provincial
RLC in discussing the regional budget for the 2022 fiscal year. The
Budget Board of the South Kalimantan Provincial RLC considers that
the non-openness of local governments to the implementation of RGIS
causes the points of thought that have been conveyed to most of the
points of thought that have been conveyed cannot be accommodated in
RGB programs and activities due to inaccuracy in time and authority
issues that are systematically locked through RGIS.
The budget function of the RLC seems useless when the main
ideas prepared and read at the plenary session of the council falls by
itself when input is made through RGIS. This condition is due to the
inadequacy of the non-delivery related to the mechanism of use of the
RGIS by local governments to the RLC, namely related to the timing
of the implementation of inputs, affairs, and authorities as well as the
compatibility between proposers for recent activity programs, causing
proposals that have been inputted systematically to be rejected. The
RLC adheres to previous communication with local governments,
namely allowing input of points of thought if the KUA-PPAS document
has not been published, but in the end the results of the communication
are contradictory and not in line with the mechanism contained in
RGIS.
The information conveyed improperly causes obstacles in the
RGB discussion process due to disagreements with the regulations.
The South Kalimantan Provincial Government still adheres to the
existing rules, namely the main thoughts of the RLC must be submitted
no later than 1 (one) week before the RKPD development planning
deliberations is carried out because with these provisions the RGIS
can only be used in accordance with its function, while the RLC holds
the local government accountable for the previous submission that the
input of points of thought can still be done as long as the KUA-PPAS
document has not been issued.
3. CONCLUSION
One of the authorities possessed by local governments and RLC is
through the preparation of the RGB. The budgeting function of the
RLC is contained in the latest Local Government Law Number 23 of
2014 in the form of preparing and determining the Regional Budget
with the Regional Head. In implementing the financial management
system, Government Regulation Number 12 of 2019 concerning
Regional Financial Management was issued which covers all aspects of
activities starting from planning activities, accountability to activities
related to regional financial supervision.
The implementation of the budget function attached to the RLC
is influenced by several factors, one of which is the means. One of
the facilities used by the RLC in carrying out its budget function is
the right to provide suggestions and opinions contained in the main
points of thought through the local government information system
(RGIS) which has been uniformly applied to all regions. RGIS is
an application built by the Government in the context of managing
regional development information, regional financial information and
local government information that are mutually integrated and used for
the implementation of regional development.
RGIS aims to provide convenience in managing data and
information specifically in bridging between the budget function
owned by the RLC and the authority that is the task of local
governments according to its work mechanism, so that the purpose
of the establishment of the system can be realized as expected. Good
communication between the government and the RLC in implementing
the RGIS must be a common concern, lest a system that has been built
properly is considered to weaken a function that exists when users of
the system run it not in accordance with the proper instructions and
corridors.
4. BIBLIOGRAPHY
Abdullah, S. (2006). Opportunistic behavior of the legislature in local
budgeting. National Symposium on Accounting 9 Padang.
Bowman, Richard C, K. (2003). State and Local Government, The
Essentials, Hought Miffin Company.
Indonesia, P. R. (2019). Permendagri Number 70 of 2019 concerning
Regional Government Information System. JDIH CPC RI, 5.
Indonesia, P. R. (2017). Permendagri Number 86 of 2017 concerning
Procedures for Planning, Control and Evaluation of Daera
Development, Procedures for Evaluating Raperda on RPJPD
and RPJMD and Procedures for Changing RPJPD and
RPJMD, JDIH BPK RI, 4.
Indonesia, P. R. (2014). Law Number 23 of 2014 concerning Regional
Government. JDIH BPK RI, 3
Indonesia, P. R. (2018). Government Regulation Number 12 of 2018
concerning Guidelines for the Preparation of Rules for
Province, Regency and City RLCs. JDIH BPK RI, 2.
Magner, N. & G. G. J. (2015). Municipal officials’ reactions to justice
in budgetary resource allocation. Public Administration
Quarterly (Winter).
Memed Ronsumbre1, Samson Werimon2, H. S. 2. (2019). Factors
affecting the role of RLC in regional financial supervision.
JFRES (Journal of Fiscal and Regional Economic Studies),
2(1), 58–68.
Mustika Dewi, I. (2011). Analysis of Factors Affecting the Capability
of RLC Members in Regional Financial Supervision (RGB).
Diponegoro University, 1–93.
Nurcholis, H. (2005). Theory & Practice of Government &; Regional
Autonomy. PT. Gramedia Widiasarana Indonesia.
Nurwani, M. I. Nasution and. (2021). Analysis of the application of
the Local Government Information System (RGIS) at the
Regional Financial and Asset Management Agency (BPKAD)
of Medan City. Journal of accounting and finance, 9 Number
2.
Von Hagen, J. (2002). Fiscal rules, fiscal institutions, and fiscal
performance. The Economic and Social review.
Wijaya, H. (2004). Regional Autonomy and Autonomous Regions. PT.
Rajagrafindo Persada.
ARTICLE 13
FINANCIAL MANAGEMENT OF STATE
UNIVERSITIES PUBLIC SERVICE AGENCY (PTN
BLU) AND LEGAL ENTITY STATE UNIVERSITIES
(PTN BH)
By:
Syamsu Rizal Noor
Atma Hayat
Ade Andriani
1. INTRODUCTION
1.1. Background
Educating the nation’s life is a particularly vital role for universities in
Indonesia. Indonesia higher education consists of state universities by
the government which are formed and implemented under ministries
and foundations or private parties that form and implement universities.
The principles that must be met in managing universities are
transparency, accountability, quality assurance, non-profit, effective,
and efficient. “Law Number 12 of 2012 concerning higher education as
the basis for implementing autonomous universities, becomes the legal
basis for regulations regarding independently managed universities
including academic and non-academic sections”. Independent
management of non-academic sections means the implementation of
institutional institutions, student affairs, financial management, human
resources, and infrastructure.
The management of higher education must adjust to the
changes of times. Higher education governance is crucial. Indonesia
currently has three forms of state university management. The first
is a university in the form of a PNBP PTN work unit. Most of the
number of universities in our country is in the form of PNBP which
is taken data from the entire population. To hire professional teaching
staff PTN in the form of PNBP does not have a special cost standard
that can be used. Limited provision of additional income for education
staff and educators adjusted to the cost standards listed in the State
Budget, lack of flexibility in Human Resources (HR) management that
makes it difficult for universities to improve the performance of their
employees. One weakness in managing surplus income in universities
is a PNBP PTN work unit. There exists a regulation that requires PTN
PNBP Work Unit to spend the excess on the revenue it has for activities
carried out in the same fiscal year. Only asset optimization can be used
as income for PTN when related to the implementation of duties and
functions, and if there is an excess of these funds, it becomes state
revenue that must be deposited in the state treasury. Assets in this case,
there are restrictions in the form and rates of levies by universities on
asset optimization. The centralized determination of the rupiah index,
the form and number of tariffs levied, causes minimal flexibility in
application in the field. The positive side is owned by PTN PNBP even
though it has shortcomings.
PTN with Legal Entity is a university with the second form. PTN
with Legal Entities, a concept that was prepared for the first time with
the issuance of “PP No.61 of 1999”, was further strengthened through
the issuance of “Law No.12 of 2012 concerning PTN BH to be able to
be modern and able to compete with world-class universities with its
flexibility”. And the third is PTN with BLU. Improvement of PP No.06
of 2000 concerning service companies so that public service agencies
emerged. To be designated as a BLU category, there are 5 types of
services, namely education, health, fund managers, area managers, and
managers of other goods and services.
1.2. Problems Formulation
Law Number 12 of 2012 implies that starting in 2012 PTN in Indonesia
adapts financial management rules, financial management for State
Universities in the form of PNBP Satker, PTN with BLU and PTN
with Legal Entities to support academic activities. Although the
management in the financial sector is different, the universities are still
under the same ministry. This paper will discuss the form of financial
management at PTN with BLU and PTN with Legal Entities so that the
formulations of the problems are:
1. What is the financial management of State Universities in the form
of a Public Service Agency?
2. What is State Universities’ financial management in Legal Entities?
2. DISCUSSION
2.1 PTN with BLU
PTN with BLU is a second level institution regarding campus
autonomy. Some universities that have obtained the status of Public
Service Agencies are Jember University, Surabaya State University,
Mulawarman State University Samarinda, Sebelas Maret State
University Surakarta, Lampung State University, Yogyakarta State
University, Malang State University, Gorontalo State University,
Bengkulu State University, and Sriwijaya State University, etc.
To achieve the objectives, flexibility in financial management
is given to BLU, as for what distinguishes in general in managing
state finances, namely management of income and expenditure,
management of cash, management of receivables and debts, investment
management, management of goods and fixed assets, remuneration and
surplus “PMK Number 129 of 2020”.
“Transparency and accountability in managing BLU finances can
be realized by submitting LPJ to the funds it has managed by processing
financial statements according to financial accounting standards based
on the principles of timely and appropriate presentation” (Law Number
1 of 2004).
Minister of Finance Regulation Number 220/PMK.05/2016 issued
by the Minister of Finance regarding the Accounting System (SA) and
Financial Reporting of Public Service Agencies (BLU) in the context
of implementing the SAP, become a guideline used to compile and
submit financial statements in BLU form in 2016. Previously, what was
used as a regulation as a guideline for preparing financial statements
in the form of BLU was the Minister of Finance Regulation No.76 /
PMK.05 / 2008 concerning Guidelines for Accounting and Financial
Reporting in the form of Public Service Agencies (BLU). The essence
of PMK is the delay in preparing and submitting financial statements
in accordance with SAP at the latest in 2018. Related to the system
application used for the process of preparing Financial Statements, the
form of BLU cannot be used, for its implementation it adjusts PP No.
23 of 2005.
BLU refers to the strategic plan of the ministry of institutions/
countries, including the plan of strategic objectives, vision, and mission,
as well as evaluation of the previous implementation of RSB, as well
as preparing the next 5 years business strategy (RSB), BLU and RSB
business strategic analysis details 5 years of measurable performance
indicators. BLU, to prepare an annual budget business plan (RBA), is
a reference to the RSB, which includes 1. Plan, 2. activities, 3. Key
performance indicators (IKU), 4. Performance targets, 5. Revenue and
Expenditure Budget, 6. Estimated initial cash balance and ending cash,
7. Threshold, and 8. RBA forecast for next year. The RBA emphasizes a
flexible budget model with certain thresholds. Setting the presentation
threshold considers the objectives and realization for revenues/expenses
as well as fluctuations or changes in activities within the framework of
BLU operations, as outlined through excerpts of the ministry’s work
plan and in the BLU budget. (PMK No.129 of 2020).
According to the Minister, the revenue obtained from the
implementation of BLU from service fees can be directly used to fund
BLU spending. Every BLU financial transaction must be accounted for
in accordance with accounting standards from the government based
on the accrual system, in accordance with the provisions of applicable
laws and regulations, certification documents must be managed in
an orderly manner. To prepare BLU financial statements, data from
transactions and information on financial events shall be collected,
recorded, then summarized, including data through transaction
accounting sub-systems. Financial statements show the results of the
accountability system in public service agencies, which are displayed
in the form of financial statements including LRA, reports of changes
in excess budget balances, balance sheet reports, reports on operations,
statements on cash flows, reports on changes in equity and statements
on financial records. The implementation of business units by business
service entities is made financial statements, consolidated through
BLU’s consolidated financial statements. (PMK No.129 of 2020)
2.2 PTN-BH
PTN-BH is a higher level compared to the other two forms because it
has full autonomy in managing its finances and resources on campus
or college. such as education staff and educators. The operating pattern
at PTN-BH has similarities with SOEs. Some of those who already
have PTN-BH status are Bandung Institute of Technology, Sepuluh
Nopember Institute of Technology, Bogor Agricultural University,
Gadjah Mada University, University of Indonesia, Padjadjaran
University, Airlangga University, Diponegoro University, North
Sumatra University, Sebelas Maret University, Hasanuddin University,
Indonesian Education University, Andalas University and Brawijaya
University.
The government has a role in the establishment of PTN-BH as a
regulator of developments in the world of education in the Indonesian
state and is a push for changes in the management of higher education
that can compete with other universities abroad. The application of
autonomy is important for universities so that they can freely develop
sustainably along with the development of science, technology, and art
(IPTEKS), immediately adapt to changes in dynamics so that they can
achieve an advanced society.
Higher Education requires autonomy in developing and flexible
academic management and managing bylaws and finances independently.
The law that regulates this does not only apply to universities but
also applies to the overall education unit which includes primary and
secondary education. This situation for universities, especially for PTN
with the form of BHMN, makes it dilemmatic. Higher Education is
organized by the government which has the form of BHNM stated
by the Attorney General that Higher Education no longer has a legal
basis so that PTN BHMN which has been implemented since 2000 is
required to return as a PTN implemented by the government.
PTN, which was previously in the form of BHMN with this
situation, makes it dilemmatic in its financial management so that this
condition causes difficulties due to the form of the institution where the
role and function of the board of trustees are different for PTN with the
form of BHMN, in addition to financial management, especially those
whose funds come from the community and the results of cooperation
that has been carried out PTN BHMN manages independently due to
limited autonomy, on BLU is deposited as state revenue instead of tax.
Therefore, financial management at former universities in the form of
BHMN, namely the University of Indonesia, Gadjah Mada University,
Bandung Institute of Technology, Bogor Agricultural University, North
Sumatra University, Airlangga University, and Indonesian Education
University implement the BLU financial management pattern.
The issuance of “Law of the Republic of Indonesia Number 12
of 2012 concerning Higher Education. Which regulates three forms
of state universities, namely: State Universities with Legal Entities,
State Universities with Public Service Agencies, and State Universities
with PNBP work units. The existence of universities has a special legal
basis, including the status of former PT with the form of BHMN which
became the pioneer of the establishment of State Universities with
the form of Legal Entity according to the Law. To become a quality
higher education, autonomy is given in the context of implementing
higher education and applying models for financial management, so
that universities with the form of public service entities can in the
future become PTN with the form of Legal Entities. (Law Number 12
of 2012).
Rules become the basis for financial management of an
organization for finance-related activities. “Government Regulation
(PP) number 26 of 2015 which replaces Government Regulation (PP)
number 58 of 2013 on the financial management of State Universities
with the form of Legal Entity, expressly regulates for State Universities
with the form of Legal Entity which will then be called PTN with the
form of Legal Entity is State Universities formed by the government
with the form of Public Law Entities that have Government Autonomy
(PP No.26 of 2015)”. It is necessary to supervise the fund management
mechanism, including revenue receipts and expenditures because it
is a legal entity owned by the government. Autonomy does not mean
freedom in managing finances, but there are restrictions in the rules
to manage finances set by the government. The rules derived from the
method or process of managing PTN-BH funds are derived from “Law
Number 12 of 2012” concerning Higher Education.
State University Funding Assistance in Legal Entity is a fund
given to PTN through the State Budget and Expenditure Revenue by
the government in organizing and managing higher education activities.
Covering all revenues at PTN in the form of Legal Entities whose funds
are sourced outside the SB (state budget) is called non-SB funds.
“Generally accepted accounting principles (PABU) and financial
accounting standards (SAK)” that have been issued by the “Indonesian
Accounting Association (IAI)” are the basis for compiling the
management of funds sourced from non-SB.
There are three stages in the framework of procedures for
disbursing and reporting funds received by State Universities in the
form of legal entities whose funds come from the government through
the State Budget as follows: the first is submitting, the second is
disbursing and the third is reporting. At the stage of submitting, State
Universities with the form of Legal Entities make proposals for the
need for the allocation of PTN Funding Assistance in the form of Legal
Entities including performance targets, the need for costs in the context
of implementing the Tridharma in Higher Education excluding salaries
and allowances for civil servants (Civil Servants) and calculations
of BO units (operational costs). The liquefaction stage is carried out
with 4 stages divided into the first, second, and third and fourth three
months. (PMK No.139 of 2015 Ps 8 Paragraph 3).
In this third stage, PTN with the form of a Legal Entity processes
and makes and reports on the realization of the use of State University
Funding Assistance in the form of a Legal Entity quarterly, reports on
the results of performance and the Financial Statements (LK) of PTN
with the form of a Legal Entity after being examined or audited by
an auditor, conclusions can be made for financial statements for PTN
in the form of Legal Entities consisting of three, namely realization
reports on the use of Funding Assistance State Universities with the
form of Legal Entities, reports on performance results and financial
statements for PTN with the form of Legal Entities after inspection or
audit by auditors.
Table 1 Financial Statements for PTN with Legal Entity form

No. Report Type Report Purpose
1. realization report on the use of a) KPA (Power of Budget Users).

State University Funding Assis- b) Board of Trustees (quarterly).
tance in the form of Legal Entity
2. Performance Report a) Board of Trustees (per Year).

b) Minister of Finance (Minister
3. financial statements for PTN of Finance).
with the form of a Legal Entity c) Menristekdikti (Minister of
after inspection or audit by audi- Research, Technology and
tors Higher Education) per year.
(Source: pmk no. 139 of 2015 Psl 11)
The preparation process for financial statements for PTN with

the form of a Legal Entity is in accordance with the “Generally
Accepted Accounting Principles” and in the “Financial Accounting
Standards” issued by the “Indonesian Accounting Association” stated
in “Government Regulation Number 26 of 2015 Article 20”. Basic
Framework Preparation to present financial statements explains the
desired purpose of financial reporting, namely, to provide information
related to financial condition, work ability or performance and the
transition to the financial condition of an organization or institution has
benefits for some users with the matter of taking economic decisions. In
this case, financial statements is an organized submission of the financial
condition and financial capabilities of the entity “STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS Number 1 of 2009”.
Understandable, aligned/relevant, convincing/reliable, and
comparable are the “qualitative characteristics” of financial statements.
The preparation of financial statements is used to present harmonized
information about the financial condition of all transactions after they
have been carried out during a reporting period by an organization
or reporting entity based on “Government Regulation numbee 71 of
2010”. According to Syam Anwar (2017). In the “Financial accounting
standards” that have been issued by the “Indonesian Accounting
Association” states that there are two “STATEMENTS OF FINANCIAL
ACCOUNTING STANDARDS” that can be used as standards in terms
of preparation for financial statements for PTN with the form of Legal
Entities, namely “STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS 45”, concerning Financial Reporting of a Non-
Profit Entity and “STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS OF Entities without Public Accountability”. “ETAP
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS”
in it states that there is a Profit / Loss Statement, therefore it is very
appropriate for organizations or companies that are designated as
business entities”.
Financial statements in STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS 45 mentioned a work / activity and
operations in a period that has been running, without thinking about
operational profits or losses in an entity consisting of statements of
financial position, statements of activity, statements of cash flows and
notes to financial statements. The financial statements of PTN in the
form of a Legal Entity do not have an income statement, the field of
education is a non-business or non-profit field, so that the financial
statements prepared by PTN in the form of a Legal Entity do not
generate profits or losses in carrying out its operations is the purpose
of PTN in the form of a Legal Entity. Clearly showing the report of the
increase or decrease in the financial value of PTN in the form of Legal
Entities sourced from Unbound, Temporarily Bound, and Permanently
Bound Funds is the content of the activity report.
Use with a specific purpose for an unlimited source of funds
provided by the donor of funds with no desire for reciprocity is called
an unbound source of funds. Use with specific purposes for limited
sources of funds by donors with no desire for reciprocity is a source of
temporary tied funds. The use of sources of funds with restrictions by
not expecting return by donors of the source of funds that determine
so that the source of funds remains unchanged in its original state
until a certain period or with the achievement of certain conditions
is called a temporary limitation “STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO.45 of 2011”.
There are differences in preparing the presentation of the
statement of financial position in general according to STATEMENT
OF FINANCIAL ACCOUNTING STANDARDS 45, which is seen
in the equity position presented consisting of permanently bound,
temporarily bound and unbound. So that it can be seen in the financial
statements of PTN in the form of a Legal Entity, the equity position
shows the rise and fall of a university operation in accordance with the
source of funds owned. Stakeholders by looking at the presentation of
equity positions in the PTN report in the form of Legal Entities can
provide and draw conclusions on the operations that have been carried
out. (Government Regulation No.26 of 2015 Article 11).
The activity statement replaces the income statement, which is
in the STATEMENT OF FINANCIAL ACCOUNTING STANDARDS
45. Providing a global and clear representation of the main activities
or operations running is the activity report’s purpose. There are three
forms, namely form A which presents information based on the net asset
classification, there are two columns, where one column is used for
each classification and the other column is used to present the amount.
Whereas form B presents confirmation of justification or substantiation
for the consequences of completion of restrictions by resource donors
by not wanting to return payments for certain assets for net asset
reclassification, form B also presents the possibility of a mixture of
information about grants and income derived from investments.
For form C, focus its attention on changes in untied net assets.
(STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.
45 OF 2011.).
Changes in transactions that relate historically to the classification
of cash and cash equivalents according to types such as activities on
operations, investment activities and funding at a time running are a
description of the cash flow statement as part of preparing financial
statements.
(Martani). The operational activities of the Tridharma of Higher
Education at PTN in the form of an Agency Law based on STATEMENT
OF FINANCIAL ACCOUNTING STANDARDS Number 2 revised
in 2009 means activities that are the main revenue generator for
PTN in the form of Legal Entities and other activities that are not
activities on investment and activities on funding. The acquisition and
disposal of long-term assets and other investments that do not include
cash equivalents are investment activities and funding activities are
activities that cause changes in the amount and composition of capital
contributions and loans to PTN with Legal Entities.
3 CONCLUSION
The pattern of Financial Management used by the Public Service
Agency is a pattern of financial management that provides flexibility
in the form of flexibility in carrying out sound business practices to
develop services to the community with the aim of improving general
welfare and educating the nation’s life.
Preparation of Financial Statements and Performance Reports
of State Universities Public Service Agency uses financial accounting
standards and Government Accounting Standards.
State Universities with the form of Legal Entity are a higher level
compared to the other two forms because in managing their finances and
resources, the campus or college have full autonomy, such as education
staff and educators. Based on the same objectives and characteristics of
financial statements in terms of submitting and providing information to
stakeholders, as a non-profit entity, state universities with legal entities
apply Statement of Financial Accounting Standards 45 as a basis for
reference in the process of preparing financial statements. PTN with
Legal Entity receive funds from various sources that vary so much that
it requires a method for grouping the funds received and can describe
an activity in PTN in the form of Legal Entity as an entity.
4. BIBLIOGRAPHY
Republic of Indonesia. 2020. “Regulation of the Minister of Finance
of the Republic of Indonesia No. 129/PMK.05/2020 Year
2020 concerning Management Guidelines for Public Service
Agencies. Republic of Indonesia. 2015.
Regulation of the Minister of Finance of the Republic of Indonesia
No. 217 / PMK.05 / 2015 of 2015 concerning Statement of
Accrual-Based Government Accounting Standards Number
13 concerning Presentation of Financial Statements of Public
Service Agencies.
Republic of Indonesia. 2015. Regulation of the Minister of Finance of
the Republic of Indonesia No. 139/PMK.05/2015 Year 2015
concerning Procedures for Provision, Disbursement, and
Accountability for Providing Funding Assistance for State
Universities with Legal Entities.
Republic of Indonesia. 2012. Law Number 12 of 2012 concerning
Higher Education. Republic of Indonesia. 2015. Government
Regulation No.26 of 2015 concerning the Form and Mechanism
of Funding for State Universities Legal Entities. IAI. 2009.
Statement of Financial Accounting Standards of Entities
without Public Accountability (ETAP). Jakarta
Republic of Indonesia. 2010. Government Regulation No.71 of 2010
concerning Government Accounting Standards.
Indonesian Institute of Accountants. 2011. Statement of Financial
Accounting Standards Number 45 on Financial Reporting of
Non-Profit Organizations.
Syahromi M &; Cheisviyanny C. (2020). “Financial Performance
Analysis before and after the implementation of the Financial
Management Pattern of Public Service Agencies at UNP”.
Journal of Accounting Exploration. Volume 02 Number 02,
series C, May 2020, pp. 2839-2860.
Diana Sekar Anggraini. (2019). The Existence of Legal Entity State
Universities against
Provision of Higher Education. Volume 6 No.2, September 2019.
Syam Anwar &; Ruswandi D. Irwan. (2017). Financial Accounting
Standards for
Financial Management of State Universities Legal Entities.
ARTIKEL 14
ROLE OF VILLAGE FINANCIAL SYSTEM (VFS)
APPLICATION PLANNING AND INTERNAL
CONTROL IN IMPROVING ACCOUNTABILITY OF
VILLAGE FUND MANAGEMENT
By:
Indriaty Ermayani
Shaiful Hifni
Sarwani
1. INTRODUCTION
1.1. Background
The Law Number 6 of 2014 states that Village Funds are state budget
transfer funds through Regional/City APBs and their use is for
fundraising for governance, development, and empowerment of rural
communities, and is implemented in accountability of village fund
financial management. As a manifestation of the principles of financial
governance, Good Governance refers to the main pillars: accountability,
transparency, responsibility, independency and fairness, The village
government is responsible for the management of organizational
resources to the Ministry of Finance which has the right and authority
to request clear and accurate information periodically. Village financial
managers, including the Village Head, and village officials under the
supervision of the District Government are responsible to the Central
Government to prepare an Accountability Report on the Implementation
of the Regional Budget.
The 2014 Village Minister Regulation in the Law on Villages
explains that the priority of using village funds is not limited to local
initiatives in village priority development activities listed in the Village
RKP and LOCAL VILLAGE GOVERNMENT BUDGET documents,
so that the planning that has been made should be carried out correctly
(Hasniati, 2016). However, in fact, the village planning are still prone
to manipulation and incomplete accountability of the Regional Budget
is often encountered, where there are still many unclear plannings
contained in the same paper as reporting village financial management.
In addition, the VFS Application as an implementation of
information technology in the form of an application to expedite the
village financial reporting process ideally and as a tool to control village
financial management, the Financial and Development Supervisory
Agency (FDSA) in collaboration with the Ministry of Home Affairs
must be used by all Village Finance Officers. However, in practice,
Rivan, et al (2019) found that the implementation of the village
financial system still experienced obstacles, namely the low quality of
human resources and limited facilities. Rosyidi (2018) explained that
the village government as a community trustee must be accountable,
present, report and disclose all activities of using village funds
accurately and transparently so that they are in accordance with the rules
and are well organized. However, the reality shows that competence
based on education, training and skills of village resources does not
affect the accountability of village fund management according to Arif
Widyatama, et al (2017).
Village apparatus tools assisted by the Village Consultative Board
(BPD) are expected to manage finances, including: 1) planning, 2)
implementation, 3) administration, 4) reporting, and 5) village financial
responsibility. Zulaifah, I.A, et al (2020) explained at the planning
stage as the first point is managing village funds, preparing the regional
budget in an orderly and correct manner as a means of controlling and
controlling village finances. In this case, the presentation of quality
financial statements as a form of accountability for the performance
of the village government to the village community is stated Wardani,
D. K., &; Andriyani, I. (2017). The two opinions of the researchers
above conclude that financial management with good accountability
can produce financial statement accountability.
Accrual-based accounting aims to increase transparency,
accountability and Government performance. The Village Government,
in managing village fund finances, conducts planning and budgeting of
Village RKP, contains important points of village development policy
and directs the achievement of the vision and mission and optimal
village goals. Careful village-indicative preparation is done with the
help of the Village RKP drafting team and programs planned to be
held by the village, to be consulted with the district/city government or
other informants. If the Village RKP has been drafted and submitted to
the Village Head, then the next step with BPD (Village Representative
Body) through village deliberations is to discuss and agree on the
village RKP which will be submitted to the District first to be submitted
then to the DPMD (Village Community Empowerment Office) to get
approval from the local Regent.
The planning stage of the Village RKP condition show that
the budget allocation that was originally prepared could not all be
submitted to the sub-district due to the condition of community demand
for various Village development planning deliberations and did not
reach an agreement, whereas if the village RKP planning is considered
complete and timely submitted to DPMD to get approval from the
Regent, it is certainly a result to be achieved by the village government
so that it can continue activities village construction in the following
year. Considering that planning is a crucial factor in the preparation of
Village Fund finances, the researcher focused on planning indicators as
a benchmark for village fund financial accountability. To increase the
use of village funds in accordance with accountable and transparent
principles, on November 27, 2015, Number 143/8350/BPD, The Village
Financial System (VFS) application serves as a portal for village fund
financial management integrated thoroughly with the central system.
Furthermore, the evaluation of the use of the village financial system
application (VFS) itself according to its development until 2020 which
has been operationalized by tens of thousands of villages in Indonesia,
produces complete documents on administration. Sulina, I. G. T. A, et
al (2017) discussed the purpose of implementing VFS is to facilitate the
task of village governments in making village financial reports, as well
as optimal village financial management, as well as controlled financial
management because it is in accordance with laws and regulations.
FDSA data (2019) as of December 31, 2019, states that the Village
Financial System application has achieved implementation of 95.06%
in all villages in Indonesia. VFS application version 2.0.3 has been
used in 71,249 villages in 417 districts / cities from 74,954 villages in
434 districts / cities.
Evaluation of the use of the VFS application can be optimally
influenced by several internal and external ways. Internal factors such
as the level of ability of the VFS application operator in running the
application, as well as compliance with the village financial management
regulatory signs correctly. Pratiwi, D. N et al (2020) argue that internal
factors that affect the use of the VFS application depend on the interest
of an employee in the village, in this case the treasurer who acts as a
village operator shall learn it correctly. While external factors are more
on the benefits of information technology to encourage someone to
use the VFS application. The influence of these internal factors is also
supported by the results of the research hypothesis test of Trisnawati,
et al (2021) using structural model evaluation, showing that the high
involvement of employees who use VFS will have a significant effect
on the development of the operational performance level of VFS
itself. External factors are also influenced by the level of training or
information provided to village officials from the Village Community
Empowerment Agency.
In fact, there are still found weaknesses of the village apparatus in
the operation of the VFS application which are encountered, such as by
asking for help from outside parties, namely Village Local Assistance
(PLD) to conduct guidance and consultation on improving the use of
the VFS application. Delays in reporting village fund management
planning are also still often experienced by some villages. This statement
is supported by Sulina, I. G. T. A, et al (2017: 4) stating that the VFS
application has weaknesses such as the difficulty of new employees to
understand the use of this application in its implementation and use,
worsen with the lack of training provided to employees. Watulingas,
P. et al (2019) states that the problem of using the VFS application is
also caused by the weakness of human resources, where the number of
village devices owned is minimum, so that errors often occur (error)
when inputting data in the VFS application. Some of these studies are
the reason of the authors to add the factor of using VFS application to
be the second indicator that influenced accountability of planning and
budgeting for financial management of village funds.
Meanwhile, the internal control of village officials is not optimal,
where several factors affect the policy of internal control problems
of village officials. The Village Head is chosen from the community
based on individual or group interests. Although it does not rule out
the possibility that some Village Heads are individuals who are elected
honestly and fairly by the community. This situation indirectly affects
the policies taken by the Village Head, where sometimes the Village
Head must fulfill his obligations by providing one-sided policies, the
interests of the community take precedence over the main vision and
mission of the Village Fund Financial management itself. Looking at
the field conditions, it is natural that the responsibility of the Village
Government is questioned, considering the bureaucratic structure.
There are similar studies explaining the influence of planning,
technology use and the absence of internal control on financial
statements’ reliability. Zulaifah, I. A (2020) stated the need for
responsibility and firm attitude of village officials towards making
Village RPJM and village RKP documents by reporting APBDes to
the local government for accountable and trusted planning purposes.
Karmila K, et al (2014) explained that the results of regression analysis
on the amount of human resource availability H1 did not affect the
reliability of financial statements significantly, and internal control
variables as H2 did not affect the reliability of financial statements.
Wilopo, I. A (2017) shows based on the results of multiple regression
and linear model tests showed hypothetical results including factors
such as PAD variables, government complexity, regional expenditures,
local government size, debt financing ratios did not affect the variable
transparency of regional financial information disclosure. Darmawati
(2018) in research on factors affecting accountability of local
government financial statements in West Sulawesi shows the results
of a study of HR capabilities and internal control, simultaneously
affecting financial statement accountability.
2. DISCUSSION
1.1. Planning on Village Financial System Accountability
Planning can be abstracted as the process of determining appropriate
upcoming period activities through a series of alternatives and
consideration of available resources. Regarding the government’s own
development planning program, the National Development Planning
System is regulated in Law Number 25 of 2004. The Directorate General
of Financial Balance (2013) explained that planning as a reference for
budgeting is a process of preparing plans for receipts, expenditures,
and financing for a certain period. The lack of a correct budget usage
planning concept will inevitably affect some difficulties in directing the
purpose of using the budget correctly. Mardiasmo (2019) explains that
Budget as a planning tool is used to:
a. Formulate policy goals and directions to fulfill the vision and
mission set.
b. Design various programs and activities to achieve organizational
goals and plan other sources of financing
c. Allocate funds for various programs and activities that have been
prepared, and
d. Establish performance indicators and levels of strategy achievement.
Deficient budget planning is a significant obstacle to budget
absorption.
Village authority according to Law No. 6 of 2014 in managing
and organizing government and finance itself aims to improve the
efficiency, effectiveness, and accountability of prosperous, independent,
and prosperous village government. The village community’s
participation in village financial management should also be going
well at the planning stage. Programs that have been prepared in village
Development planning deliberations activities are still monitored,
and if deemed inappropriate should be directly reported to the Village
Government and BPD.
Based on the 2020 Tapin District Inspectorate Inspection Results
Report, it was still found that 56 villages out of 137 villages had not
completed the VGB on time. Of course, this impacts delays in disbursing
village funds and Village Fund Allocation. The implementation of VGB
is carried out through the village treasury supported by valid proof of
expenditure, and the Village Treasurer is required to maintain books
on all village revenues and expenditures using applicable guidelines or
regulations.
Given the importance of timeliness in submitting the VGB on
time, it is found from several conditions that occur, such as the slow
completion of the preparation of which programs are village priorities
and not. Village development planning deliberations are often carried
out on the last dates, and result in slow budget reporting to the District
Government represented by VCEA. The results of Village development
planning deliberations on its implementation were reported too late
and did not reach an agreement because the interests of the community
were considered still not fully stated. Indedd, this is factor makes
the performance of the Village Government finally seem slow and
unaccountable.
2.2. VFS Application Uses and Implications

The Village Financial System Application (VFSA) is an
application issued by the Finance Development and Supervisory
Agency (FDSA) and the Ministry of Home Affairs, aimed at improving
quality village financial management, as a manifestation of the village
financial accountability framework, and has the necessary functions
and is easy to carry out (FDSA, 2018). The use of this function will
make the village government, the user, organization, and the village
apparatus are benefited from the system. Malahika J, M et al (2018)
explained that village governments are easy to use the VFS application
because they can still be used without using the internet network,
and their functions have been adjusted at the stages and processes of
government financial documents and statements.
The weak quality of Human Resources owned by the Village
Government in running a computerized system and supervision
from internal and external parties affect the results of budgeting for
village financial management. Azkia et al (2016) argue that the higher
the quality of human resources will also affect the accountability of
financial management. It can be seen from the lack of understanding of
Village Finance even though they have received guidance from Outside
Village Assistants. The fact shows that there found the inability to pour
village financial management planning into the account posts of the
Sisekudes Own Application system. Ensuring that the account number
and name on the Village Financial System application is appropriate
or not still requires assistance from the Outside Village Companion,
which occurs repeatedly. Financial coordinator should have known
about account items in the VFS application, making it easier to input
financial data when running the VFS application itself. Indeed, the
quality of human resources of the village government will continue to
doubt their ability and professionalism in managing village finances
correctly and appropriately, because they are still unable to carry out
their duties and roles optimally.
2.3. Internal Control on Village Financial Supervision

COSO (1992) defines internal control as a process that includes
directors and commissioners, management, and human resources (HR)
in an entity to provide reasonable guarantees to achieve the following
3 objectives: efficiency of financial operations, reliability of reports
and compliance with applicable laws and regulations. Similarly,
Government Regulation Number 60 of 2008 concerning the internal
control system is a business; activities that are tried by leaders and all
employees at any time, so that organizational goals can be achieved
through activities that are in accordance with laws and regulations.
The internal control system is a method for guiding, monitoring
and measuring the organization’s energy resources, which can fight
corruption and financial statement fraud.
Village Financial Management in its duties and responsibilities
needs to get supervision from the village government and from
community participation and the District Government itself. Village
financial management must be monitored at the planning stage, use and
reporting stage to avoid financial abuse.
2.4. Accountability of Village Fund Management

According to Gray et al. (1996), the concept of accountability
describes the act of providing information or a request (obligation) to
satisfy one person in response to the activities of another. Regarding
village government, Riyanto (2015) in Sugiarti I (2017) explained that
accountability is an obligation of accountability to the authorities by
explaining the performance and behavior of individuals/leaders of
organizations or enjoying rights in accordance with laws and regulations
and showing that village communities are entitled to receive financial
reports from village governments. Accountable financial statements
can be seen from an accounting system that can share reliable,
accurate, accountable, and timely information (Lestari, et al, 2019).
Accountability is a process that can be implemented and accounted
for, containing the management of village resources or funds obtained
from the central government and the application of trusted policies to
village officials in achieving the final goals that have been made in a
certain period (Noordiawan, 2006: 34).
Village Financial Management Cycle Chart
3. CONCLUSION
1. The importance of achieving the objectives of preparing Village
CTR on time to be submitted to VCEA is the responsibility of the
village government as a government organization. Being on time
and accurate to submit priority proposals, which has not been
necessarily done since November of the previous year. Village
officials accompanied by village communities under the supervision
of outside village assistants in the RKP preparation meeting must
be completed in carrying out their activities.
2. Planning on Village Financial System Accountability will
determine the appropriate activities of a village government in the
future period through a series of alternatives and consideration of
available resources owned by the village.
3. The use of the VFS application is used by the village government
in making posts regarding the allocation of funds to be used and
reported, related to the elaboration of the feasibility of the value of
using village finances according to the instructions of the central
government
4. The internal control system in village financial supervision is a
method to guide, monitor and measure the organization’s energy
resources, which can fight corruption and financial statement fraud.
5. Financial accountability of the village government as a process of
implementation and accountability, contains the management of
village resources or funds obtained from the central government
and the application of trusted policies to village officials in being
used to achieve the final goals that have been made in a certain
period
3. BIBLIOGRAPHY
Budiana, D. A., Said, D., & Nursini. (2019). The effect of village device
competencies and internal control system on accountability of
village management. Scientific Research Journal,
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and Challenges in Corporate Social and environmental
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Hasniati, H. (2016). Village Fund Management Accountability
Model. JAKPP (Journal of Policy Analysis & Public Service),
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Karmila, K., Tanjung, A. R., &; Darlis, E. (2014). The Effect of
Human Resource Capacity, Information Technology
Utilization, and Internal Control on the Reliability of Local
Government Financial Reporting (Study on Riau Provincial
Government). Highlight, 9(1), 25-42.
Malahika, J. M., Karamoy, H., &; Pusung, R. J. (2018). Implementation
of village financial system (VFS) in village government
organizations (Case study in Suwaan Village, Kalawat
District, North Minahasa Regency). Going Concern: Journal
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Mardiasmo, Prof, Mba, Ak. 2009. Public Sector Accounting. ANDI
Publisher, Yogyakarta
Noordiawan. (2006). Public sector accounting. Jakarta: Salemba
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Pratiwi, D. N., &; Pravasanti, Y. A. (2020). Analysis of the use of
VFS in village fund management. Journal of Accounting and
Taxation, 20(2), 217-223.
Rivan, A., &; Maksum, I. R. (2019). Application of Village Financial
System (VFS) in Village Financial Management. Public
Administration Journal, 9(2), 92-100.
Rosyidi, M., Azlina, N., &; Putra, A. A. (2018). The effect of
transparency, competence, and internal control system on
Village Government accountability in managing Village
Fund Allocation (Empirical study on all villages in Salo
District, Kampar Regency). Student Online Journal (JOM) in
Economics, 1(1), 1-14.
Sugiarti, E., &; Yudianto, I. (2017, July). Analysis of Human Resource
Competency Factors, Information Technology Utilization,
and Budgeting Participation in Village Fund Management
Accountability (Survey of Villages in Klari District, East
Karawang District, Majalaya District and Rengasdengklok
District, Karawang Regency). National Seminar on
Accounting and Business (SNAB), Faculty of Economics,
Widyatama University.
Sulina, I. G. A. T., Wahyuni, M. A., Kurniawan, P. S., &; ST, M.
(2018). The role of the village financial system (VFS) on the
performance of village government (case study in Kaba-kaba
village, Kediri District, Tabanan Regency). JIMAT (Scientific
Journal of Accounting Students) Undiksha, 8(2).
Trisnawati, R., Achyani, F., & Ulifiati, N. (2021). Determinants of the
Quality of Village Financial Statements and the Implementation
of VFS as Mediation Variables. Riset Akuntansi dan Keuangan
Indonesia, 5(3), 262-277.
Wardani, Dewi Kusuma, and Ika Andriyani. “The influence of the
quality of human resources, the use of information technology,
and internal control systems on the reliability of village
government financial reporting in Klaten Regency.” Journal
of Accounting 5.2 (2017): 88-98.
Watulingas, P., Kalangi, L., &; Suwetja, I. G. (2019). The Role of Village
Financial System on Village Government Performance (Case
study in Kapataran Village, East Lembean District, Minahasa
Regency). Indonesia Accounting Journal, 1(2), 105-111.
Wilopo, I. A. (2017). Analysis of factors affecting accountability &
transparency of regional financial information through the
website. JESI (Indonesian Journal of Sharia Economics),
7(1), 61-78.
Zulaifah, I. A. (2020). Village Financial Management Planning (Case
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Regency). Journal of Accounting and Taxation, 21(01).
ARTICLE 15
INSPECTORATE GENERAL (INTERNAL AUDIT)
AND AUDIT RISK: IS THE ROLE OF THE
INSPECTORATE GENERAL VULNERABLE TO
RISK?
By:
Yustisiana Sari
Kadir
1. INTRODUCTION
1.1. Background
Over time, public sector work units change and evolve according to the
internal and external environment. Changes in work units that adjust
to this can bring opportunities and risks to work units. Opportunity
can be a boon for public sector entities, whereas risk is the potential
for loss and even failure. Risk is a word we hear every day that even
sounds bad and that we try to avoid. It needs to be managed properly
to avoid bad things from happening. It is the possibility of an event
that affects the achievement of the work unit’s objectives. When public
sector entities face risks and it cannot be avoided, the only thing to be
done is to reduce the impact of these risks. It is not only associated with
individuals, but also with the work units as larger units.
Associated risks to government institutions where the government
needs reforms that adopt corporate procedures to increase efficiency
and reduce costs (Osborne and Gaebler, 1992). This condition shows
poor financial management in the public sector. The government has the
main responsibility entrusted by the people. They need to pay attention
to strengthen the supervisory function in its implementation. Oversight
systems increase transparency and accountability of government
processes (Szymanski 2007; Baltach and Yilmaz, 2006). This function
is performed by the Inspectorate Generalas an internal auditor who
conducts internal audits within the government. Internal auditors can
carry out good local government governance (Taufik, 2010).
To minimize the risk of errors in public sector institutions,
supervision is needed from within the public sector institution itself
called the General Inspectorate. The Inspectorate Generalassesses the
internal control unit and performs internal control functions in the
public sector. Internal supervision plays a crucial role and provides
adequate assurance that governance activities and accountability
through the accountability system can be realized as expected. Internal
supervision is concerned with using state financial management activities
and performance achievements followed up effectively. However, in
carrying out its duties, the inspectorate general is inseparable from risks.
The Inspectorate Generalalso needs to identify and manage risks in its
internal control activities. Supervision is a management function closely
related to achieve organizational goals. But in practice, surveillance is
often seen as a threat. The public sector is in dire need of checks to ensure
organizational goals are being achieved and minimise errors.
In practice, fraud occurs due to the weak internal control system of
public sector entities. Fraud occurs because of the ability, opportunity
and weak supervision system. With the advancement of science and
technology and the development of information, the modus operandi of
counterfeiters has become increasingly complex and diverse. The type
of fraud and modus operandi in each country will differ, depending on
that country’s law enforcement system. In developed countries with
good economic conditions and good law enforcement systems, there
are fewer methods of fraud, while in developing countries, there are
more methods of fraud.
Various cases occurred within the public sector due to fraud and
corruption. According to the Association of Registered Fraud Examiners
(ACFE), corruption is a form of fraud. Public officials, including
politicians and public servants, usually act to make themselves rich
or become legally rich by abusing the public power granted to them.
Eradicating corruption in Indonesia requires increased transparency
and accountability in state and private financial management. The
complexity of an entity’s operations and the development of business
and investment opportunities have led to a higher risk of fraud in the
public sector. Fraud cases are not just fictitious operations that have
been carried out by companies or government forums on fraudulent
practices, but corruption packaged using the ranks of corporate
management is found.
But there is still a problem where a government auditor has
vulnerabilities because he neglects to complete his duties. In disclosing
the risk of fraud, there is still an audit risk faced in the disclosure
process. Audit risk is the vulnerability of an account balance or
transaction class to a material misstatement, as well as related internal
control mechanisms (Sandari, 2018).
This paper discusses the audit risks faced by the Inspectorate
General as the government’s internal audit responsible for providing
confidence that the risks can be managed and controlled properly, so as
not to have an impact on greater losses, especially related to the misuse
of the purpose of using funds that have been determined by the work
unit in accordance with Presidential Decree No. 20 of 2001 which
explains the abuse of power due to position or position which can harm
the country’s economy. The provision of confidence is also supported
by the implementation of corporate governance / government work
units which are sometimes strongly influenced by political relations
(Faccio, 2006).
The Inspectorate General as the Government Internal Supervisory
Apparatus (GISA) must manage, utilize owned resources economically,
efficiently, effectively, and prioritize the allocation of resources into
activities that have major risks. Resources that must be managed
include people, finance, and equipment. Resources must use sound
management practices. With the limited allocation of funds based on
the Government, the inspectorate general as the government’s internal
supervisor should create a priority scale in supervision works which
based on laws and regulations must be completed in a certain period.
This risk-based approach based on Supono (2007) is different from the
conventional audit approach, risk-based auditing reduces attention in
testing individual transactions and is more serious in testing the system,
the process of how management overcomes obstacles to achieving
goals and trying to help management overcome (divert) obstacles
due to risk factors in decision making.
2. DISCUSSION
1.1. Institutional Theory
DiMaggio and Powell (1983) argue that because of institutional
pressure, work units acquire similar characteristics through the desire to
organize in the same way as other work units in the same environment.
According to Deegan (2007), institutional theory deals with the form
of work units and explains how work units in certain fields tend to
share the same characteristics and forms (homogenization). In addition,
Deegan (2007) revealed that the main idea behind institutional theory
is the formation of work units under pressure from the institutional
environment, which leads to institutionalization.
1.2. Accountability Theory

LAN and FDSA (2000) stated that accountability is one of the
important characteristics of the concept of good corporate governance.
The basic idea of accountability is the ability of a person or work
unit or mandate recipient to be accountable to the mandated party. In
general, work units or agencies should be accountable to those affected
by their decisions or actions. In relation to internal audit, the internal
audit function, according to accountability theory, helps a work unit
determine the success or failure of the work unit’s mission in achieving
its goals. We are regulated by expanding the audit function to provide
internal consulting and assurance services aimed at adding value to
the work unit by evaluating operations and proposing improvements to
risk management, control, and management processes.
1.3. Audit and Internal Audit

Auditing is an act of comparing actual circumstances (conditions) using
conditions that should exist (criteria). The audit aims to assess whether
the application is synchronized using what has been set and to assess
or see if what is coordinated using as expected. Internal supervision
and internal audit are the same thing. Internal control plays a key role
in providing sufficient assurance that management and accountability
can be implemented as expected by the accountability system. Internal
control is also one of the functions of the work unit that must be
carried out so that problems and irregularities related to the activities
and achievements of the State Financial Authority can be monitored
effectively.
1.4. Internal Audit Effectiveness

Van Gansberghe (2005) argues that the effectiveness of public sector
internal audit can be measured according to the extent to which it
contributes to effective and efficient service delivery. Albrecht et
al. (1988) emphasize the expansion of internal audits to consulting
engagements, where financial audits fail and non-compliance.
According to him, internal audit can be considered effective as a
consultant and as a traditional auditor. In other words, internal audits
are considered effective if they can create added value regardless of
whether they perform an assurance or advisory role.
1.5. Regulations related to the Internal Control System of the

Government and the Inspectorate General
Government Regulation Number 60 of 2008 concerning the
Government Internal Control System mentions the inspectorate general
is the executor in internal supervision of the implementation of duties
within the Ministry and reports directly to the Minister / head of the
Institution. The Inspectorate General is headed by the Inspectorate
General. The functions of the Inspectorate General are different in
each department, but in general they functions to supervise and inspect
the application, finances, and performance of general administrative
activities; in accordance with the report on the results of supervision and
examination; make recommendations on the follow-up of the results of
supervision and examination; Supervision and follow-up evaluation of
the results of supervision and inspection, as well as improvement of the
supervision system. All implementation of ministerial and commission
responsibilities is supervised so that they can use planning, ministerial
policies and applicable laws and regulations to operate simultaneously
in day-to-day tasks and development.
1.6. Risk
Risk is a hazard or consequence that can occur because of an ongoing
process or future event. In the field of insurance, risk can be interpreted
as a state of uncertainty, where if an undesirable situation occurs it can
cause a loss. Risk is the possibility of damage or loss in the face of
uncertainty about the outcome of an action or circumstance. Attitude to
risk exerts considerable influence on strategic choice.
Risk is a combination of the possibility of an event and the
consequences of the event by not ruling out the possibility that there is
more than one effect that may occur for one event. In general, risks are
viewed from a negative perspective, such as loss, danger, failure, etc.
1.7 Audit Risk

Audit risk means the auditor accepts uncertainty in conducting an audit,
or it is a risk where an entity’s financial statements do not provide a
true and reasonable view of its financial position, or the entity intends
to distort facts even though the auditor determines that the financial
statements are free from material misstatement. Ideally, the inspectorate
general in conducting internal audits should be more vigilant in audit
areas that have an elevated risk of corruption (Muehlmann, et al.2010).
Internal auditors must maintain their independence and objectivity
to ensure effective risk management (Douglas, et al.2013). Internal
audits conducted by the inspectorate general should focus audits on
areas where fraud is possible using a risk-based audit approach (Fraser,
2011). Where risk-based audits can improve the effectiveness of local
government risk management (Danescu, et al.2010).
2.8 Risk management

Risk management is considered sufficient to be used, especially to
improve auditors’ internal control which is not only oriented towards
reviewing financial statements. Risk management is a structured
approach/methodology in managing uncertainty related to threats; a
series of human activities including Risk assessment, development of
strategies to manage it and risk mitigation using resource empowerment/
management. Strategies that can be taken include transferring risk to
other parties (transfer risk), avoiding risk, reducing the negative effects
of risk (mitigate risk), and accommodating some or all the consequences
of certain risks (accept risk). Traditional risk management focuses on
risks arising from physical or legal causes (such as natural disasters or
fires, deaths, and lawsuits). Financial risk management, on the other
hand, focuses on risks that can be managed using financial instruments.
The objective of risk management is to reduce the different risks
associated with the chosen field to a level acceptable to society. It can
be several types of threats caused by the environment, technology,
people, work units and politics. On the other hand, the implementation
of risk management involves all means available to humans to risk
management entities (humans, staff, and work units).
1.9 Risk Maturity

Risk maturity is an assessment of the level of how the work unit
understands and manages risk. The level of risk management maturity
must be measured to determine whether the implementation of risk
management in the work unit has been successful or not. Its level
assessment is especially important because it can be used to identify
the strengths and weaknesses of work units and their management.
1.10 Government Internal Control System

The structure of internal control is an especially crucial factor in a work
unit because it affects the running of the government’s internal control
system. The task force will achieve its objectives through efficient and
effective operations, reliable financial reporting, protection of state
assets, and compliance with laws and regulations. The work unit’s
operation requires good internal control in its activities.
1.11 Government Internal Supervision Apparatus

Government Internal Supervision Apparatus (GISA) is a government
agency formed with the task of conducting internal supervision /
internal audit at the central government and / or local governments
formed with the task of carrying out internal supervision within the
central government and / or local governments, including the Financial
and Development Supervisory Agency (FDSA), Inspectorate General
of Ministries, Inspectorate / internal control unit of the Ministry of
State, Principal Inspectors/NGO Inspectors, Inspectors/internal control
units in the High Secretariat of State Agencies and State Agencies,
Province/Province/City Inspectors, and other internal control units of
Government Legal Work Units in accordance with the law.
1.12 Risk-Based Internal Control

According to Government Regulation Number 60 of 2008 Article
11, Government Internal Supervision Apparatus (GISA) improves
the effectiveness of risk management in the implementation of duties
and functions of state institutions including audits. By using risk-
based control, GISA is expected to act as a catalyst to encourage the
implementation of risk management in a government agency to achieve
good governance. Internal Audit or Risk-Based Internal Audit is an
inspection methodology used to ensure that risks have been managed
within the risk limits set by management at the corporate level. In other
terms, Internal Audit or Risk-Based Internal Audit is an audit focused,
prioritized in business risks and processes and control of risks that can
occur. Internal audit is based on the belief that the risks faced by the
work unit are professionally managed and well controlled. Thus they
do not have a negative impact on the work unit’s operations and do not
hinder the achievement of the work unit’s objectives. According to the
concept of risk-based auditing, with the increasing risk of an area, the
audit that area needs to be paid attention to.
1.13 INSPECTORATE GENERAL AND GOOD GOVERNANCE

The Inspectorate General plays a role in ensuring the quality of
activities in the agency’s work area to improve governance, and has a
strategic role in terms of duties and responsibilities in managing and
implementing the vision and mission as well as government programs.
Prerequisites for good governance, accountability and transparency of
Internal government is not only created by the integration of auditors.
Not only internal government, but internal audit institutions must
embrace the community adds public value to society. The existence of
these factors is a crucial in increasing participation of the community
to become better, that they can participate in any interest related to
government officials to monitor their performance. This small thing can
help internal control work so that corruption problems can be resolved
immediately. The accounting industry today plays a significant role in
increasing people’s awareness of economic sustainability to achieve a
better future.
With the characteristics of an ethical accounting industry
recognized by the business world, openness, accountability, and
transparency determine the existence of public values, thus fostering
public trust in accountants and so that trust continues to grow and be
maintained. Accountants can make efforts to increase public value
by focusing on improving professional standards and knowledge,
demonstrating good ethics and integrity, increasing general awareness
of the impact of accountants’ presence on the creation of good corporate
governance. Some perspectives on the role of accountants in efforts
to promote civil society action can also be used to address or even
eradicate corruption in government.
The national internal auditor who carries out the duties of
government internal audit will carry out its function in overcoming
and preventing government corruption. The main objective of internal
audit activities is to assist management in implementing appropriate
internal controls to prevent corruption and criminal acts. In Indonesia,
preventing corruption is not enough, internal auditors must really
understand how to detect fraud early. These fraud detection measures
cannot be extended to all frauds, ecause each type of fraud has distinctive
characteristics. A good understanding is needed to understand and
detect fraud Against the type of fraud that the company may have.
1.14 PREVIOUS RESEARCH ON RISK-BASED INTERNAL AUDIT

Research on risk-based internal audits, particularly in the public
sector, is limited. This is understandable, as risk-based internal audits
themselves are new. In the overall conduct of risk-based internal audits,
auditors fail to reach consensus on standards. There has not been much
research on risk-based internal audit in Indonesia, especially in the
public sector. Some of them conclude that risk-based internal audits
have not been fully implemented in Indonesian government agencies
(Istianah 2007, Purwaningsih 2012, Prasasti 2014 and Rahmawati
2015). Internal risk-based assessment did not run optimally due to
several obstacles faced by GISA. As a result, there is still a wide-open
space for related research.
1.15 Risk-based Internal Audit in Indonesia and Its Problems

Risk-based internal audit is a good practice adopted by the international
internal audit work unit. Based on previous research reviews, GISA
in Indonesia has not conducted a comprehensive internal risk-based
assessment. One of the destructive conflicts we both face is the
lack of risk maturity, i.e., the absence of proper risk management
implementation as a prerequisite for implementing risk-based internal
audit. The risk-based internal audit plan for Indonesian government
agencies is regulated by SAIPI 3010 and PANRB Regulation No. 19
of 2009.
Both regulations state that GISA executives need to prioritize
the highest-priority, risky activities and develop strategic and annual
internal audit action plans consistent with company objectives. In
preparing the audit plan, strategic plan and annual audit plan, the
Inspectorate General complies with both regulations. Strategic and
annual audit plans are developed with risk-based considerations in
mind, and internal audit is a work unit’s risk management framework
to enable audit planning to prioritize maximum risk.
1.16 Inhibiting Factors for Risk-Based Audit Assignment

Another factor that hinders audit activities is the lack of auditors. One of
the cases faced by the Inspectorate General of ministries and branches
is the lack of auditors. The combination of a limited number of auditors
using different skills in the face of high audit workloads weighs heavily
on the Inspectorate General. The scope of audit is extremely broad and
distributed, certainly exceedingly difficult, especially for trained and
experienced auditors. To create optimal audit activities, from limited
audit power, focus on high-risk areas. In this case, high-risk auditors
are given higher priority because they are considered by auditors to
be using the best competencies. Risk-based internal auditing helps
auditors resolve conflicts over auditors’ use of deficiencies
The auditor is far away. The range of remote control of ministries/
agencies Deployment from Sabang to Merauke also raises its own
questions for the Inspectorate General. Long-distance problems
between Settlers audited in some areas of eastern and central Indonesia
also arise, and transportation in these areas is difficult. The erratic sea
freight time and long travel time are quite difficult for the Inspectorate
General to conduct on-site audits, especially when they have limited
time and auditors. Long distance is also indirectly related to the range
of Control between inspectors general located at the head office of
departments/agencies Auditors are throughout Indonesia. Range
of control the extent can be seen from the number of satkers at the
provincial and district / city levels which means that the number of
satkers audited is also exceptionally large.
1.17 Discussion of factors hindering the planning of a Risk-Based

Internal Audit
One of the most essential elements of a risk-based internal audit plan is
the risk identification and assessment process. The Inspectorate General
said this was still not the best way to conduct this process, which could
see the risk of material misstatement in unspecified financial statements,
which would affect the CPC’s view of the financial statements with
WDP. The risks arising from the change in accounting policy to
accrual accounting in 2015 were unexpected for parties related to the
ministry/agency, including the Inspectorate General responsible for the
risk analysis of the work unit. Changes in accounting methods have
significantly impacted changes in the accounting practices of ministries
and institutions, especially changes related to the recognition of State
Property (BMN) on financial statements.
1.18 Paradigm Shift in Risk Based Internal Auditing Approach

A change in approach to risk-based auditing is fundamental and
therefore requires a comprehensive mindset change. According to the
concept of risk-based internal auditing, the higher the risk, the more
attention should be paid to the audit of that area. To determine business
risk. The auditor must be aware of relevant aspects of activity-based
control. Understanding of business processes, including knowledge of
risk and system-based control to achieve the goals or objectives of the
work unit.
2. CONCLUSION
Corruption in the internal government is caused by weak government
management and not optimal Internal Control System (SPI). The
achievement of good corporate governance, accountability, and
transparency in government is not only created due to the integration
of internal government auditors but it must embrace the community.
With the government’s commitment to implement good governance,
the government plans to improve the administrative performance of
government work units, including through an effective control system
that enhances the role of GISA. To minimize risk, internal control
begins with inspection, assessment, evaluation, monitoring and other
control measures over the implementation of tasks and activities of
the work unit to obtain adequate assurance that activities have been
carried out in accordance with previously established indicators.
Therefore, government internal supervisors continue to make changes
in the implementation of their duties to provide added value for
Ministries/Institutions in administrative management which aims to
encourage improved risk management, control, and governance in
accordance with Government Regulation Number 60 of 2008. If the
Inspectorate General as an internal supervisor carries out its functions
properly, professionally, independently, prioritizes transparency
and accountability to prevent fraud and provide valuable results for
the input of external, executive, and legislative auditors to improve
financial management and accountability in the future and improve the
fairness of financial statements.
3. BIBLIOGRAPHY
Dewi, L., Sari, P., Widyastuti, T., &; Classsification, J. E. L. (2018).
Expectation Gap on Internal Auditor Perception with Auditee
related to Audit Competence, Independence, and Quality.
5(1), 53–64.
DRAFTING TEAM
Jember University Lecturer Team

1. Prof. Dr. Isti Fadah, M.Si., CRA., CMA.
2. Dr. Siti Maria Wardayati, M.Si., Ak.,CA.CPA, CSRS, CRMO
3. Dr. Yosefa Sayekti, S.E., M.Com.
4. Dr. Ahmad Roziq, S.E., M.M., Ak.
5. Dr. Agung Budi Sulistiyo, S.E., M.Si., Ak.
6. Dr. Hendrawan Santosa Putra, S.E., M.Si., Ak.
7. Dr. Ririn Irmadariyani, M.Si., Ak.
8. Taufik Kurrohman, S.E., M.SA, Ak. Ph.D
9. Dr. Nining Ika Wahyuni, S.E. M.Sc, Ak.
10. Dr. Alfi Arif, SE., M.AK., Ak.
11. Arif Hidayatullah, S.E., M.Ak
Lambung Mangkurat University Lecturer Team

1. Dr. Kadir, Drs. M.Si, Ak, CA
2. Dr. Atma Hayat, Drs. Ec. M.Si, Ak, CA
3. Dr. Syaiful Hifni, Drs. Ec. M.Si, Ak, CA
4. Dr. Ade Adriani, S.E., M.Si, CA
5. Dr. Sarwani, Drs. M.Si, Ak, CA, CPA
6. Dr. Wahyudin Nor, SE, M.Si, Ak, CA, CSRS, CSRA, CertDA
7. Dr. Rahma Yuliani, SE, M.Si, Ak, CSRS
Gadjah Mada University Lecturer Team

Prof. Dr. Abdul Halim, M.B.A., Ak., CA
Editors team:
1. Dr. Muhammad Miqdad, S.E., M.M., Ak.
2. Dr. Whedy Prasetyo, S.E., M.SA., Ak,
3. Dr. Wahyu Agus Winarno, S.E., M.Sc., Ak.
4. Dr. Alwan Sri Kustono, S.E, M.Si, Ak.
5. ANISAH LUTFIATIN, S.S.
6. Bayu Aprilianto, S.E., M.Akun
University of Jember Student Team
1. Trisna Gayatri
2. Alifi Tria Susanti
3. Femba Akris Diantoro
4. Holilullah
5. Mikaila Khalisha Dadiarto
6. Cici Wijayanti
7. Ditio Adi Surya Wijaya Hadi
8. Imanita Septian Rusdianti
9. Michael Chandra Gunawan
10. Mohammad Fiqkri
Lambung Mangkurat University Student Team

1. Annisa Tri Hidhayati
2. Siti Mutmainnah
3. Dwi Puspita Sari
4. M. Khaidir Rahmatullah
5. Syamsu Rizal Noor
6. Indriaty Ermayani
7. Yustisiana Sari
THANK-YOU NOTE
To the academic community of the University of Jember and Lambung
Mangkurat University as well as the 2020 class of accounting master
students who have supported the smooth running of this volume.
BIODATA
DRAWING TEAM
Jember University Lecturer Team
Prof. Isti Fadah, M.Si., CRA., CMA. Dr. Siti Maria Wardayati, M.Si., Dr. Yosefa Sayekti, S.E., M.Com.
Dosen FEB UNEJ Ak., CA., CPA. Dosen FEB UNEJ
istifadah@unej.ac.id Dosen FEB UNEJ yosefa_sayekti@yahoo.com
0821 4029 1875 siti.maria@unej.ac.id 0816 591 325
0812 3467 4009
Dr. Ririn Irmadariyani, M.Si, Ak. Dr. Ahmad Roziq, S.E., M.M., Ak. Dr. Agung Budi Sulistiyo, S.E.,
Dosen FEB UNEJ Dosen FEB UNEJ M.Si., Ak.
ririn.feb@unej.ac.id ahmadroziq.feb@unej.ac.id Dosen FEB UNEJ
0811 350 265 0823 3061 9570 agungbudi.feb@unej.ac.id
0813 3612 9425
Dr. Hendrawan Santosa Putra, Taufik Kurrohman, S.E., M.SA, Dr. Alfi Arif, SE., M.AK., Ak.
S.E., M.Si., Ak. Ak. Ph.D. Dosen FEB UNEJ
Dosen FEB UNEJ Dosen FEB UNEJ alfi rif@unej.ac.id
hendrawan@unej.ac.id taufik.feb@unej.ac.id 0857 5533 5455
0818 0346 3174 0813 3674 6638
Dr. Nining Ika Wahyuni, S.E. Arif Hidayatulah, S.E., MAK.
M.Sc, Ak. Dosen FEB UNEJ
Dosen FEB UNEJ hidayatarief42@gmail.com
niningikawahyuni@gmail.com 0853 3307 9989
0812 1777 7411
Lambung Mangkurat University Lecturer Team
Dr. Atma Hayat, Drs, Ec, M.Si, Dr. Kadir, Drs, M.Si, Ak, CA. Dr. Wahyudin Nor, SE, M.Si,
Ak, CA. Dosen FEB ULM Ak, CA, CSRS, CSRA, CertDA.
Dosen FEB ULM kadir@ulm.ac.id Dosen FEB ULM
ahayat@ulm.ac.id 081351533007 wahyudinnor@ulm.ac.id
0822 5106 0069 0812 5737 1981
Dr. Ade Adriani, SE, M. Si, Dr. Sarwani, M.Si, Ak, CA. Dr Rahma Yuliani, SE, M.Si, Ak.
Ak, CA. Dosen FEB ULM Dosen FEB ULM
Dosen FEB ULM Sarwani@ulm.ac.id rahma.yuliani@ulm.ac.id
adriani@ulm.ac.id 0821 5309 2772 0813 2927 9545
0852 4811 9470
Dr. Syaiful Hifni, Drs, Ec, M.Si,
Ak, CA
Dosen FEB ULM
syaiful.hifni@ulm.ac.id
0812 5376 8148
Gadjah Mada Lambung Mangkurat University Lecturer
Prof. Dr. Abdul Halim,

M.B.A., Ak., CA
Dosen FEB UGM
ahali58@ugm.ac.id
0822 2674 1116
Editor Team
Dr. Alwan Sri Kustono, S.E, Dr. Muhammad Miqdad, S.E., Dr. Whedy Prasetyo, S.E.,
M.Si, Ak. M.M., Ak. M.SA., Ak
Dosen FEB UNEJ Dosen FEB UNEJ Dosen FEB UNEJ
alwan.s@unej.ac.id miqdad.feb@unej.ac.id whedy.prasetyo@unej.ac.id
0852 5830 3999 0812 3458 680 0812 3538 1999
Dr. Wahyu Agus Winarno, ANISAH LUTFIATIN, S.S. Bayu Aprilianto, S.E., M.Akun
S.E., M.Sc., Ak. anisahlutfiatin@gmail.com Dosen FEB UNEJ
Dosen FEB UNEJ bayu_aprillianto@unej.ac.id
wahyuaw@unej.ac.id 085231798901
0817 5412 057
University of Jember Student Team
Ditio Adi Surya Wijaya Hadi, Femba Akris Diantoro, S.Ak.,

Holilullah, S.Akun., M.Ak
S.E., M.Ak. M.Ak
Mahasiswa FEB UNEJ
Mahasiswa FEB UNEJ Mahasiswa FEB UNEJ
holilullah43@gmail.com
ditioadi2@gmail.com fembarozket97@yahoo.com
0822 3494 4596
0896 0444 5881 0816 591 325
Alifi Tria Susanti, S.E., M.Ak Trisna Gayatri, S.E., M.Ak. Imanita Septian Rusdianti,
Mahasiswa FEB UNEJ Mahasiswa FEB UNEJ S.Ak., M.Ak.
alifitria.susanti@gmail.com trisnagayatri33@gmail.com Mahasiswa FEB UNEJ
0823 3963 3224 0853 3098 66663 imanitaku@gmail.com
0896 1671 7913
Mikaila Khalisha Dadiarto, S.E Cici Wijayanti, S.E., Michael Chandra Gunawan
Mahasiswa FEB UNEJ Mahasiswa FEB UNEJ Mahasiswa FEB UNEJ
mikailakhalisha812gmail.com wijayantic800@gmail.com michaelchandra2016@gmail.
0853 3607 8907 0822 4495 8396 com
0896 6827 5012
Mohammad Fiqkri
Mahasiswa FEB UNEJ
fiqkrimohammad@gmail.com
0855 3654 6707
University of Lambung Mangkurat Student Team
Annisa Tri Hidhayati, M.Ak. Dwi Puspita Sari, S.E.

Siti Mutmainnah, SE. Ak. M.Ak.
Mahasiswa FEB ULM Mahasiswa FEB ULM
Mahasiswa FEB ULM
Annisatri05@gmail.com ddwipspt89@gmail.com
st.mutmainnah09@gmail.com
0896 9282 9813 0812 5399 4629
0857 5412 4288
Indriaty Ermayani,S.Pd M. Khaidir Rahmatullah, S.E., Syamsu Rizal Noor, S.E.

Mahasiswa FEB ULM M.Ak. Mahasiswa FEB ULM Mahasiswa FEB ULM
nisa.dino567@gmail.com tkhaidirrahmatullah@gmail.com srizalnoor@gmail.com
0812 4782 2983 0821 5639 3105 0853 4922 3096
Hj. Yustisiana Sari, S.E.

Mahasiswa FEB ULM
yustisianasari05@gmail.com
0813 2602 0093

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Innovation and Technology for Reformation in Public Sector Finance BUNGA RAMPAI i

Bunga Rampai : Innovation and Technology for Reformation in

Publishers and Printers:

Law of the Republic of Indonesia Number 28 of 2014

Head of Writing and Editor Team and Head of

Yogyakarta, Medio August 2023

Prof. Dr. Abdul Halim, MBA, Akt. CA

Prof. Dr. Isti Fadah, M.Si, CRA.

Jember, August 2023

Prof. Dr. Isti Fadah, M.Si, CRA

Assalamualaikum wr wb, Shalom, Om Swasti Astu, Namo

I am proud of our students, especially those who have completed

Banjarmasin, August 2023

Dr. Atma Hayat, Drs, Ec, M.Si, Ak, CA.

FOREWORD Head of Writing and Editor Team and Head of APSSAI.......iii

ARTICLE 1 MOSQUE ACCOUNTING: PANCASILA IDEOLOGY (A

ARTICLE 2 ACCOUNTABILITY ACCOUNTING IN PLACES OF

ARTICLE 3 APPLICATION OF PSAK 109 ACCOUNTING AT

ARTICLE 4 AUDITOR EDUCATION AND FORMATION IN THE

ARTICLE 5 IS INDONESIAN PUBLIC SECTOR INTERNAL AUDIT

ARTICLE 6 UNIVERSITY ACCRUAL ACCOUNTING IN

ARTICLE 7 ACCOUNTABILITY OF MOSQUE FINANCIAL

ARTICLE 8 INFORMATION TECHNOLOGY USE ON

ARTICLE 9 SOA FUNDS: ACCOUNTABILITY, TRANSPARENCY

ARTICLE 10 THE IMPORTANCE OF FINANCIAL MANAGEMENT.

ARTICLE 12 DOES RGIS “REDUCE” OR STRENGTHEN THE

ARTICLE 13 FINANCIAL MANAGEMENT OF STATE

ARTICLE 14 ROLE OF VILLAGE FINANCIAL SYSTEM (VFS)

ARTICLE 15 INSPECTORATE GENERAL (INTERNAL AUDIT)

DRAFTING TEAM.................................................................................... 209

1.2 Problems Formulation

2.3 Mosque Financial Statements based on FASI 35

2.4 Notes to Financial Statements

2.5 Application of Pancasila Ideology

1.2 Problems Formulation

Classification based on this temple’s characteristics also illustrates

2.4 Organizational Structure in Temples

Figure 1. Organizational Structure and Management of Aditya Jaya Temple

2.5 Temple Funding Sources

2.6 Financial Management in Temples

2.7 Public Accountability Practices in Religious Organizations

2.8 Accountability Practices in Financial Management in Temples

Based on the explanation above, it can be concluded that in

Figure 2. Accounting Cycle of Non-Profit Organizations

According to Halim and Kusufi (2014) the accounting cycle in non-

2.10 Financial Statements of Religious Organizations Based on

(Source: Mahendra et al. 2017)

Figure 3. Ponjok Batu Temple Revenue Report 2016

1.2 Problems Formulation

2.2 Description of Research Subject at LAZISMU Lumajang

2.3 Compatibility of the Application of Zakat, Infaq and Alms

LAZISMU has provided an overview of the transparency of its

1.2 Problems Formulation

2.2 Internal Auditor Effectiveness

2.3 Factors Affecting the Effectiveness of Internal Auditors

1.2 Problems Formulation

University Possession 2020 Revenue Location

Table 2. List of Universities with Accrual Account Relationship

2.2 Research Fund

2.3 Capital Grants