Economics Development Analysis Journal 9 (2) (2020) Economics Development Analysis Journal http://journal.unnes.ac.id/sju/index.php/edaj Comparison the Autonomic Regional Financial Performance in Southeast Sulawesi Province Tajuddin1, Ilyas2 Economics and Business Faculty, Halu Oleo University, Kendari Article Info Abstract ________________ History of Article The consequence of the implementation of regional autonomy is that the regions must have their Received January 2020 own abilities to implement government affairs and regional development. There is some research on Accepted March 2002 the financial performance of the area but is still done in a partial autonomic region only. This Pusblished May 2020 research compares the financial performance between the autonomic regions of the expansion and ________________ the parent area. Based on this, study aims to compare the financial performance of the parent regency and the expanded district. In this study financial performance is measured based on Regional Keywords: Financial Independence (KKD) rastio, Fiscal Decentralization Degree (DDF) ratio and the Regional Balancing Funds, Loan Financial Effectiveness Ratio (EKD). Overall, secondary data are used, namely the realization of Funds, Regional Regional Original Revenues (PAD), PAD targets, Balancing Funds, Loan Funds, and Regional Autonomic, Financial Expenditures. To answer the research problem, the data is processed using ratio analysis. The results Performance showed that the Regional Financial Performance measured by the ratio of KKD and DDF in the __________________ parent regency was still higher than the KKD and DDF in the expanded districts. Both the parent district and the expanded districts of KKD and DDF are included in the Instructive category. The role of the central government is still very dominant in regional financing. In general, the expanded district EKD ratio was very effective while the parent district EKD ratio was generally included in the quite effective category. The financial performance of the regional results is better than the parent region due to the existence of autonomous regions to promote maximum income sources. © 2020 Universitas Negeri Semarang Corresponding author : ISSN 2252-6560 Address: : BTN Azatata Citra Blok F.3 Kendari, Indonesia 93121 E-mail: [email protected] 180 Tajuddin, Ilyas / Economics Development Analysis Journal 9 (2) (2020) INTRODUCTION increase in the contribution of Regional Original Revenues (Pendapatan Asli Daerah, PAD) in The purpose to giving of regional regional financing. autonomy is to reduce the dependence of Regional government is expected to be regional governments on the central government. able to explore financial resources optimally, With regional autonomy, autonomous regions especially to meet the financing needs of have the opportunity to implement the government and development in the region. development in order to improve the welfare of Fiscal decentralization policies make local their communities (Wekan, R.J, Madris, & governments have the authority to generate Harryanto, 2019). In the last few years many revenue and manage regional finances developing countries have to implement independently for public services and public inefficient and effective governance, economic welfare (Zahari, M., Tan, S., Haryadi, H., & growth and a number of other macroeconomic Syaparuddin, S. 2018). The development of the variables have been unstable by the reason they acceptance of Regional Original Revenues have changed the form of government into a (Pendapatan Asli Daerah, PAD) in several parent fiscal decentralized system. (Richard M. Bird, districts and the districts expanded in Southeast François Vaillancourt, 1999). Regions must be Sulawesi Province is shown in Table 1. more independent, one of the indicators is the Table 1. Regional Original Revenues Receipts From Several Parent Districts and Districts Expanded in Southeast Sulawesi Province, 2015-2019 (Million Rupiah) North East South Noth North Years Kolaka Konawe Buton Bombana Kolaka Kolaka Konawe Konawe Buton 2015 66,37 40,53 12,28 56,04 43,85 9,26 24,78 15,26 9,65 2016 72,21 40,25 15,51 57,70 48,03 14,81 39,14 12,83 31,27 2017 55,45 55,45 34,38 97,59 52,59 21,69 48,26 26,05 54,51 2018 46,07 46,07 38,87 76,71 61,32 15,61 27,64 15,27 65,54 2019 112,25 49,28 47,84 142,42 66,04 12,76 47,03 32,74 84,89 Source : Regional Financial Statistics of Southeast Sulawesi Province, 2019 Aras (2019) states that in general, the efficient, economical, effective, transparent, and objectives of decentralization can be classified accountable with regard to the principles of into two important variables, namely: increasing justice, politeness, and benefits for the the efficiency and effectiveness of governance community (Gousario and Harmastuti, 2015). (structural efficiency approach) and increasing Fiscal decentralization is expected to create community participation in governance and regional independence and can reduce local development (local democracy approach or government dependence on the central political approach). government. The independence of regional The purpose of regional autonomy is not finance is reflected by the comparison of the merely delegating central government authority amount of Regional Original Revenues to local governments, but more importantly is the (Pendapatan Asli Daerah, PAD) to total regional desire to improve the efficiency and effectiveness income (Febiandani, R, Suseno, D. A, 2016). of financial resource management in order to The implementation of regional autonomy improve welfare and services to the community in Indonesia has not shown performance as as stipulated in Government Regulation No. 58 mandated by Law No. 32 of 2004 concerning of clause 4 of 2005 concerning regional financial Regional Government and and Law Number 33 management, regional finances are managed in of 2004 concerning financial balance between an orderly, compliant with statutory regulations, the Central Government and Regional 181 Tajuddin, Ilyas / Economics Development Analysis Journal 9 (2) (2020) Governments. The implementation of regional are a number of regional financial ratios that can autonomy is not yet optimal due to the still low be developed, namely the ratio of independence contribution of PAD in Regional Revenues. (fiscal autonomy), the ratio of effectiveness and Varlitya, C. R., Masbar, R, Jamal, A & Nasir, M. efficiency, as well as a harmonious expenditure (2018) from the results of their research ratio (Halim, 2007). concluded that the effect of fiscal decentralization This study aims to analyze and find out the on poverty alleviation is still very small. The financial performance comparison between the expected effect on poverty reduction is greater, parent district and the district resulting from the bearing in mind that after that decentralization division based on the Regional Finance Ministry must be the reach of local governments to pay (KKD), the Degree of Fiscal Decentralization closer attention to the poor and be able to (DDF) and the Regional Financial Effectiveness immediately do so to overcome the problem of Ratio (EKD). poverty. area. Fiscal decentralization in According to (Halim, 2017) KKD analysis Indonesia which began in 2001 has proven to be is one of the tools to analyze the performance of effective and efficient, however its local governments. Some parties that need the implementation still needs to be evaluated results of the KKD analysis are: the Regional (Sasana, H. 2019). Representative Council (DPRD), the central and Several study results explained that there regional government and the community. The were several obstacles in the implementation of DDF is the ability of local governments to regional autonomy, for example: (Mulatsih, E, S, finance their own governance, development and 2014) explaining that regional expansion caused public service activities. The percentage ratio of high regional expenditure costs, while Regional independence shows the ratio between the Original Revenues (Pendapatan Asli Daerah, amount of regional income with the help of the PAD) could not increase because both parent central government and loans. regions and expanded areas needed some Halim (2001) argues about the relationship adjustments. The results of the study (Sabilana, between the central and regional governments in A. 2016) concluded that the degree of the implementation of regional autonomy, decentralization in Blitar was still very small with specifically the application of a law on financial high fiscal dependence. Supporting factors and balance between the central and regional obstacles to the implementation of fiscal governments, as follows: (1) The pattern of decentralization include the potential of natural instructive relations, the role of the central resources, the potential of human resources, the government is more dominant than the potential of artificial resources, and the potential independence of local governments , the ratio of of institutional resources. Blitar Regency should independence (0-25%), (2) The pattern of be further improved in utilizing the potential consultative relations, the intervention of the resources, and the optimal resources should be central government has begun to decrease and maintained. In addition, funds need to be further more on providing consultations, the ratio of optimized to hold capital expenditures that are independence (> 25% -50%), (3) Pattern of more productive than operating expenses. participatory relations, the role of government