A case study of governmental accounting and budgeting reform at local authority in Indonesia
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Date
2009
Authors
Djamhuri, Ali
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Abstract
This interpretive case study is about accounting reform in a local government in East
Java, Indonesia, whose pseudo name is Ratan Ombo Regency (ROR). Since 2001
Indonesian central government have introduced Performance based budgeting (PBB)
and accrual double entry accounting to its local governments. New Institutional
Sociology (NIS) as suggested, among others, by DiMaggio and Powell (1991), as
well as the processual approach by Pettigrew (1997) are used to understand how the
PBB and accrual accounting have been institutionalized in ROR with its technical
and socio cultural characteristics. It is found that rapid, intensive, and extensive
reform approach applied within a relatively short time period have only succeeded in
institutionalizing the new systems ceremonially. The systems are loosely coupled
from the existing ROR’s socio cultural realities. Though the new systems have
challenged existing institutions in ROR, however, due to insufficient quantity and
quality of ROR’s staff in accounting, rigidity of its bureaucratic culture, and the
influence of Javanese concepts such as “pangreh praja” and “pamong praja”, it
failed to be embedded in the organization life of ROR. Such institutionalization has
given ROR an “unforgettable” experience, specifically when their several politicians
were legally guilty connecting with budget issues. Low level and unclear usage of
financial statements in decision making particularly due to its high financially
dependent to central government was another cause for decoupling the new systems
in ROR. Nevertheless, Increased anti corruption moves and audit by the government,
seemed to be significant factors in attaching the new systems with their underpinning
values.
Description
PhD
Keywords
Management , Governmental accounting , Budgeting reform , Local authority