Strengthening Financial Performance of Local Governments through Internal Supervision and Accountability

Guan Kusuma; Tenripada; Andi Chairil Furqan; Haryono Pasang Kamase

Authors

Guan Kusuma Faculty of Economics and Business, Tadulako University, Indonesia
Tenripada Faculty of Economics and Business, Tadulako University, Indonesia
Andi Chairil Furqan Faculty of Economics and Business, Tadulako University, Indonesia
Haryono Pasang Kamase Faculty of Economics and Business, Tadulako University, Indonesia

Keywords:

APIP, SAKIP, Financial Performance, Financial Independence, Financial Flexibility

Abstract

This study investigates the influence of the Government Internal Supervisory Apparatus (APIP) and the Government Agency Performance Accountability System (SAKIP) on the financial performance of local governments in Indonesia. Financial performance is measured through indicators of independence and sustainability, reflecting regional capacity in managing fiscal resources effectively. Using panel data from 2019–2021 with 1,623 observations across provincial, district, and city governments, multiple linear regression analysis was conducted. The results indicate that APIP significantly enhances financial performance through stronger internal control and accountability mechanisms. SAKIP also contributes positively by fostering transparent and result-oriented management. Both variables collectively strengthen fiscal independence and sustainability, confirming that internal supervision and accountability are crucial for sustainable local financial governance.

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