Proceedings of The 8th Annual International Conference (AIC) on Social Sciences, Syiah Kuala University 2018 September 12-14, 2018, Banda Aceh,

The Effectiveness Analysis of 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. have an important

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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,

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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

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.

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Yuliana, Cut Rahmawati, Yulfrita Adamy, Edwar and Azlim

Table 1. The Use of Budgets Year 2015-2016 No Type of activity Amount in Millions 1. Village Source Administration 2015 2016 Sector: Fixed Income and ADD/AP 88.200.000 178.200.000 Benefits BK Honorarium of Village Finance Management Officer, Technical ADD/AP Implementation Of 19.200.000 21.500.000 BK Village Financial Management and Village Treasurer ADD/AP Office Operations 65.437.503,48 32.511.842 BK ADD/AP Operational BPD 4.608.000 1.140.000 BK Implementation of 20.148.500 3.525.520 APBA Village Planning Maintenance of Village - 600.000 PAD Offices Implementation of - 12.700.000 ADD Village Head Election The Amount of Sector 197.594.003, 250.177.362,

1 48 00 Village Development 2. Sector: Development of 75.340.000 22.776.300 APBN Posyandu Building Volley Field Development and 25.910.00 101.238.581 APBN Environmental Facilities & Infrastructure Road Improvement & 30.000.000 128.247.727 APBN Village Bridge Road Improvement, Farming & Prevention of 150.000.000 54.455.942 APBN Abrasion & Landslide Pamphlet Making of Village Offices & Worship 3.340.000 46.161.387 APBN Preparation Business Activities in Improving Agricultural 98.000.000 79.500.000 APBN Products & Agricultural Fence and Plantation Gotong Royong Activities, Clean Friday & 1.478.000 142.913.435 APBN Development of BUMDES The Amount of Sector 575.293.372, 384.068.000 2 00 3. Community

Development Sector:

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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

No Type of activity Amount in Millions 1. Village Source Administration 2015 2016 Sector: Fixed Income and ADD/AP 88.200.000 178.200.000 Benefits BK Honorarium of Village Finance Management Officer, Technical ADD/AP Implementation Of 19.200.000 21.500.000 BK Village Financial Management and Village Treasurer ADD/AP Office Operations 65.437.503,48 32.511.842 BK ADD/AP Operational BPD 4.608.000 1.140.000 BK Implementation of 20.148.500 3.525.520 APBA Village Planning Maintenance of Village - 600.000 PAD Offices Implementation of - 12.700.000 ADD Village Head Election The Amount of Sector 197.594.003, 250.177.362,

1 48 00 Development of 16.180.008.13 14.100.000 APBN Increasing Religious Life Coaching of Improvement Activation 3.065.000 3.300.000 APBN of TPA Guidance and Application of Islamic 10.128.000 24.055.000 APBN Sharia PKK Improvement APBN/ 10.449.500 1.000.000 Activities ADD Youth Improvement - 1.000.000 ADD Activities Capacity Building of Government Apparatus - 12.786.000 DDS and Village Devices Operational Activity of - 14.200.000 DDS Posyandu The Amount of Sector 39.823.008.1 70.441.000,0

3 3 0 621.485.011. 895.911.734, Total 61 00 Source: Village Revenue and Expenditure Budget

Effectiveness Analysis Effectiveness analysis illustrates the village government's ability to realize the Village Finance or the Village Fund Allocation in implementing the planned programs which is compared to the established targets that based on potential real value. The analysis calculate the effectiveness level of the Village Fund or Village Fund Allocation in

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Yuliana, Cut Rahmawati, Yulfrita Adamy, Edwar and Azlim

Lambaya Village from 2015-2016. It uses the formula of effectiveness ratio. The effectiveness of an organization is said to be good if the ratio achieved at least 90% to 100%.

Effectiveness Ratio The effectiveness ratio illustrates the capability of the government within Lambaya Village, Central Simeulue District in actualizing the planned Village Revenue and Expenditure Budget. Lambaya village is able to perform its duties if the ratio achieved at least 1 or 100 percent (%), but the higher of the Effectiveness Ratio means the ability of the village government is better in managing the Village Fund Allocation.

Based on calculations conducted through effectiveness analysis, it can be explained that the effectiveness of management conducted during the research through documentation explained that the Village Fund Allocation which is received by Lambaya Village from 2015 to 2016 has fluctuated, in which the amount of IDR received tends to change.

Table 2. The Calculation of Effectiveness Ratio Realisation of Effectiveness Year Target of ADD ADD Ratio 2015 621.485.011,61 621.721.546,61 100,96 2016 895.775.199,00 896.285.083,63 100,21

Based on the table above showed that there is a decrease in effectiveness ratio from the previous year, from 100, 96% to 100, and 21% in 2016. Because of every year the effectiveness ratio is at 100% level, thus its criteria becomes "Very Effective". It can be concluded that Lambaya Village Government in 2015-2016 has been effective in managing Village Fund or Village Fund Allocation. Even though the Village Government in implementing a big amount of the village funds is not easy, it requires the right strategy, such as planning, implementing and managing which must be targeted according to the purpose and objectives of the Village Fund Allocation.

The Effectiveness of Village Fund Allocation Management in Improving the Village Development in Lambaya Village Related to the process of the Village Fund Allocation Management in increasing the village development in Lambaya Village, Central Simeulue District, Simeulue Regency. The village government of Lambaya should develop the planning team / implementers of the Village Fund Allocation consisting of the village head as the operational responsibility of the activity, the village secretary as the activity administration, the treasurer as a Village Finance affair which is assisted by Community Institutions in the Village. Furthermore, the process of managing the allocation of village funds should consist of three stages; planning, implementation, and accountability.

The results showed that the planning stages of Village Fund Management or Village Fund Allocation in improving development in Lambaya Village had reached an effective level. This is based on the level of the village development meeting process carried out by the village government in discussing the plans for the use of village funds allocation and how the village fund allocation management process as well as the number of parties involved in village development planning deliberations.

In the planning stage of village funding allocation management showed that the community participation in taking part in each stage of village fund allocation management process held by the village government and in the process of village development planning deliberations were lack. It also found that at the planning stage

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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

is less information disclosure from the village government to the community so that the low level of participation and supervision every villager in every village fund allocation management process.

Conclusions Based on the data analysis, it can be concluded that the effectiveness of Village Fund Management Planning in Improving Physical Development in Lambaya Village, Central Simeulue District, Simeulue Regency, 2015 to 2016 is in the very effective category since the effectiveness level every year is above (100%). Effectiveness rate in 2015 is 100,96% and in 2016, it is 100,21%.

At the planning stage, even though involving the community, the level of community participation is still low in the activities planned by the management team of the Village Fund Allocation in the village development planning deliberations. In the management stage, even though the participation of the community is still low, has reached the effective level where the village government uses the fund in accordance with the programmed requirements of physical development in Lambaya Village. At the stage of accountability, in the preparation of accountability reports directly prepared by the village government. After that the village government conducted an evaluation with community leaders and Village Consultative Agency from the results of village planning and management.

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