Challenges in Oversight Budget Allocation and Disclosure of Irregularities by Local Government Inspectorates in Indonesia

Authors

  • Cenia Avrilly Nur Azizah Department of Accounting, Tadulako University, Palu, Indonesia
  • Haryono Pasang Kamase Department of Accounting, Tadulako University, Palu, Indonesia
  • M. Ikbal Abdullah Department of Accounting, Tadulako University, Palu, Indonesia
  • Nina Yusnita Yamin Department of Accounting, Tadulako University, Palu, Indonesia
  • Erwinsyah Erwinsyah Department of Accounting, Tadulako University, Palu, Indonesia

Keywords:

Local Government, Regional Inspectorate, Oversight Budget, Internal Control, Audit Findings

Abstract

Regional financial management is an important component in realizing good and clean governance. In Indonesia, regional internal oversight is carried out by the Regional Inspectorate as the Government Internal Supervisory Apparatus (APIP). To strengthen this function, the Ministry of Home Affairs has established a mandatory policy on the minimum budget allocation threshold in the Regional Revenue and Expenditure Budget (APBD) for oversight programs. However, increased realization of the oversight budget has not always been followed by a decrease in BPK audit findings. These findings include weaknesses in the Internal Control System and non-compliance with statutory regulations. This condition indicates that regional financial management problems remain, even though internal oversight by APIP has been implemented. This study examines the relationship between the budget realization of the Regional Inspectorate Oversight Implementation Program and the number of BPK audit findings in provincial governments. This study uses a quantitative approach with panel data regression and a one-year lag. Data were obtained from the Financial Statements of Provincial Regional Inspectorates for 2021-2023 and BPK Audit Reports on Regional Government Financial Statements (LKPD) for the following years, 2022-2024, covering 20 provinces and 60 province-period observations. The results show that oversight budget realization has no significant relationship with the number of BPK audit findings next year. This finding indicates that increasing oversight budget realization in the current year is not yet sufficient to be associated with fewer BPK audit findings in the following year, particularly when budget allocation has not been directed toward substantive oversight outcomes.

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Published

2026-06-20

How to Cite

Azizah, C. A. N., Kamase, H. P., Abdullah, M. I., Yamin, N. Y., & Erwinsyah, E. (2026). Challenges in Oversight Budget Allocation and Disclosure of Irregularities by Local Government Inspectorates in Indonesia. Economics, Business, Accounting & Society Review, 5(2), 171–184. Retrieved from https://ecsis.org/index.php/ebasr/article/view/443

Issue

Vol. 5 No. 2 (2026): Economics, Business, Accounting & Society Review

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Articles

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Copyright (c) 2026 Cenia Avrilly Nur Azizah, Haryono Pasang Kamase, M. Ikbal Abdullah, Nina Yusnita Yamin, Erwinsyah Erwinsyah

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