The Effectiveness Analysis of Village Funds Management Planning
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Proceedings of The 8th Annual International Conference (AIC) on Social Sciences, Syiah Kuala University 2018 September 12-14, 2018, Banda Aceh, Indonesia The Effectiveness Analysis of Village Funds Management Planning *1Yuliana, 2Cut Rahmawati, 1Yulfrita Adamy, 1Edwar and 1Azlim 1Faculty of Economics, Abulyatama University, Aceh Besar 23372, Indonesia 2Department of Civil Engineering, Faculty of Engineering, Abulyatama University, Aceh Besar 23372, Indonesia *Corresponding author: [email protected] Abstract The effectiveness analysis illustrates the local authority ability to realize Village Finance or Village Budget Allocation to implement planned programs compared to established targets based on potential real value. The management of village funds in Aceh seems to be ineffective where there is an unaccountable village financial realization as well as the planned program is inconsistent with the initial target. Therefore, it is necessary to find the effectiveness of the use of village funds. This study takes a case study in Lambaya, Simeulue Tengah Subdistrict of Simeulue District in 2015-2016. This study aims at determining the level of effectiveness of village funds management planning in village development. Data collection methods were conducted qualitatively through observation, interview, documentation and questionnaire. Data analysis techniques used descriptive qualitative method. The analysis used to calculate the effectiveness level of Village Finance or Village Funds Allocation in Lambaya from 2015-2016 uses the effectiveness ratio’s formula. In which the effectiveness of an organization is said to be good if the ratio achieved at least 90% to 100%. The results show that the effectiveness of village funds management from 2015-2016 has been in the very effective category that is in 2015 of 100.96% and in 2016 of 100.21%. At the planning stage is seen ineffective level, as society participation is still low. At the stage of implementation has reached an effective level where the budget can be used properly. At the village funds accountability stage has been effective, where direct preparation is conducted by the Lambaya’s local authority and evaluate with community leaders and the Village Council Board openly. Thus in the management of village funds need to be considered at the planning stage. All aspects of society need to be actively involved to generate effective use of village funds. Also, it is necessary to improve the quality of human resources (HR). Keywords: effectiveness of financial planning, development, village funds. Introduction In the Ministry of Home Affairs Regulation No. 113 year 2014 concerning Financial Management of Village defines the Village as a legal community unit that has regional boundaries and are authorized to regulate and manage the interests of the local community, based on the origin and local customs that are recognized and respected in the government system of the Republic of Indonesia. Villages have an important 37 Yuliana, Cut Rahmawati, Yulfrita Adamy, Edwar and Azlim role in the progress of a region. Therefore, empowering rural communities is a must (Solano Lara, Fernández Crispín, & López Téllez, 2018). Empowerment of communities is an effort to realize the independence and ability of the community in the life of the nation, state and society(Shi, Chen, Ma, & Lan, 2018). The active community in involvement and participation is a concept of a participatory development model (Vaughn, Jones, Booth, & Burke, 2017). This is manifested through the joint development management system in the process of planning, evaluating and implementing deliberations, consensus, and mutual cooperation. Thus village development is the responsibility of the village head, all village officials and the community in carrying out all good affairs in the planning, implementation and monitoring stages. In cunducting the construction of village heads was assisted by village officials and can be assisted by community institutions in the village (Saputra, Sujana, & Haris, 2016). Analysis of the effectiveness of the village government in actualizing the Village Finance has been widely investigated but there is very little analysis of the effectiveness of the village government in carrying out the development process in remote areas. Therefore, this study aims to determine the level of effectiveness of village fund management planning in rural development, especially in Lambaya Village, Central Simeulue District, Simeulue Regency in 2015-2016. Literature Review Definition of Effectiveness Effectiveness is the activity, usefulness, or the suitability in an act of someone who performs the task with the intended target. Effectiveness basically shows the level of achievement of results, often or always associated with the efficient understanding, although there is actually a difference between the two (Loomis & Dziedzic, 2018) (Kakwani, Li, Wang, & Zhu, 2018). Effectiveness also emphasizes the results achieved, while efficiency is more on how to achieve the results achieved by comparing the input and output (Streers, 2010:24) but Streers also point out that effectiveness is not only to gain a lot of profit but also by the number of goods and quality of service achieved, where an effectiveness criterion itself becomes intangible. So it can be said that organizational effectiveness is the ability of an organization in using the available resources efficiently to achieve that goal (Azlina, Hasan, Desmiyawati, & Muda, 2017). Definition of Village Financial Planning Financial planning is an activity to estimate revenue and expenditure for a certain period of time in the future (Martins, 2017). In relation to the Village Fund Management, the planning is the process of preparing the Village Budget (Kiryluk- Dryjska & Beba, 2018). Definition of Planning Planning is a process to establish the beginning of various end results which is achieved by the company in the future. Between the time log, where the longer planning is made so the lag time between the planning with the achieved final result is greater and the degree of uncertainty of achievement of these results are also increasing. Conversely, the shorter time lag between the planning made and the target of the outcome to be achieved so the degree of uncertainty of achievement of results will decrease (Solihin, 2015:62). Village Finance Management According to Ministry of Home Affairs Regulation No. 113 Year 2014, the management of village funds is an overall activity that includes planning, implementing, 38 Proceedings of The 8th Annual International Conference (AIC) on Social Sciences, Syiah Kuala University 2018 September 12-14, 2018, Banda Aceh, Indonesia administration, reporting, and accountability of village finances. The village head is the power holder of the village's financial management authority and represents the Village Government in the ownership of separated village property. Meanwhile, according to Ministry of Home Affairs Regulation No. 113 Year 2014, the Village is a legal community with a territorial boundary that is authorized to regulate and administer government affairs, the interests of local communities based on community initiatives, rights of origin, and / or traditional rights which are recognized and respected in the system of Indonesia government. Source of Revenue Village consists of: According to Law no. 6 Year 2014 About Village, the Village Revenue comes from: The original income of the village consists of the results of operations, asset results, self-reliance and participation, mutual assistance, and other village revenues; Allocation of State Revenue and Expenditure Budget; Part of the Regional Tax and Retribution of the Regency / City; Allocation of Village Funds (ADD) which is part of the Balancing Fund received by the Regency/City; Financial Assistance from Provincial Revenue and Expenditure Budget and Regency/City Revenue and Expenditure Budget Non-binding grants and donations from third parties; and Other legal village income. The Village Budget consists of Village Revenue, Village Expenditure, and Financing. The Village Budget extension is discussed in the village development planning meeting. The village head together with the BPD establishes the Village Budget annually with Village Rules. Research Method Method of data collection in this study is qualitative by observation and documentation, interview, and questionnaires. While, the data analysis technique used in this research is the descriptive qualitative method. The research is conducted by using the necessary data related to the indicator from the research variables, then interpret the obtained data and facts in the form of descriptive. Results and Discussion Village Government Working Plan (RKP-DESA) The Village Government prepares Village Government Working Plan as an elaboration of the Village Long-term Development Plan. It was prepared by Lambaya Village Government in accordance with information of regency / city government related to the indicative ceiling of villages in Lambaya village government infrastructure. It will focus on dealing with development and road hardening. It will also focus on the other infrastructure development activities that are useful for the village apparatus and community. The following table uses the budget cost and report on the realization of the implementation of the village income and expenditure budget for 2015-2016 that runs in the village of Lambaya, Central Simeulue District, Simeulue Regency. 39 Yuliana,