ANALYSIS OF FINANCIAL CHARACTERISTICS AND INDEX PUBLIC DISCLOSURE ON THE LEVEL OF VOLUNTARY DISCLOSURE Yeni Priatna Sari Ida Farida Sunandar

Background Issues Public sector organizations in Indonesia is defined as an organization that uses public funds ( Bastian, 2006) and local governments are part of the public sector organizations ( Sinaga, 2011)

Background Issues Law of the Republic of Indonesia No. 14 of 2008 on Public Information One way that can be done by the local government to improve the transparency of financial reporting is to disclose voluntarily the local government on the internet

Previous Research NoPenelitiJudulVariabelHasil Penelitian 1.Puspita, 2010 Analysis of the performance and characteristics of local government influence on the level of disclosure and quality of information on government websites The independent variable is PAD ( X1 ) Level of dependence ( X2 ) The size of the local government ( X3 ) Complexity Government ( X4 ) Shopping areas ( X5 ) and the dependent variable is ( Y ) the level of voluntary disclosure in local government websites. PAD ( - ) Dependence level ( + ) The size of the local government ( + ) The complexity of government ( + ) Loval Expenditure (- )

Previous Research Yunanto, 2010 Liestiani,2008 Amirudin,2010 Intellectual Capital Disclosure and characteristics of local government in Indonesian Disclosure of financial statements government district / city in Indonesia for the 2006 financial Analysis of factors affecting the level of provincial government financial statements The independent variable is the size of the Local Government ( X1 ) Age Local Government, ( X2 ) PAD ( X3 ) Functional differences ( X4 ) Independence level ( X5 ) and liabilities ( X6 ). The dependent variable is ( Y ) level of intellectual capital disclosure disclosure The independent variable is the level of regional assets ( X1 ), Complexity area ( X2 ), regional dependency rate ( X3 ), Many of his findings ( X4 ), Level Deviation ( X5 ) The dependent variable is ( Y ) level of disclosure LKPD The independent variable was the type of government ( X1 ), political competition ( X2 ), the size of government ( X3 ), leverage ( X4 ), the wealth of government ( X5 ) and its independent variable is the level of disclosure in the province LKPD The size of the Local Government ( - ) Age Local Government, ( - ) PAD ( - ) Functional differences ( - ) Independence level ( + ) and liabilities ( - ). The level of regional assets ( + ), Complexity area ( + ), regional dependency rate ( - ), Many of his findings ( + ), Level deviation ( - ) Type of government ( - ), Political competition ( no effect ), the size of government ( no effect ), leverage ( no effect ), the wealth of government ( no effect )

Research Questions Does the level of local independence has positive effect on voluntary disclosure ? Does the level of optimization of public spending has positive influence on voluntary disclosure ?

Research Questions Does the level of public investment has positive influence on voluntary disclosure ? Does public disclosure index has positive effect on voluntary disclosure ?

Research Objectives To describe the variations in the level of voluntary disclosure influenced by the index of public disclosure and financial characteristics consisting of : 1. The level of local financial independence 2. The level of optimization of public spending 3. The level of public investment

Framework Level of Independence Level Public Investment Level Optimization of Public Expenditure Financial Characteristics of Local Government Provincial Government Information Transparency Index Level of Public Information Level of Voluntary Disclosure

Hypotesis H1. Levels of Regional Independence has positive effect on the level of voluntary disclosure H2. Optimizing Level Public Expenditure has positive effect on the level of voluntary disclosure H3. The level of public investment has positive influence on the level of voluntary disclosure H4. Level of Index Public disclosure has positive effect on the level of voluntary disclosure

Operational Definitions and Research Variables Level Local Financial Independence Local Financial Independence Ratio = ( PAD : Total Revenue Region) * PAD = Pendapatan Asli Daerah

Operational Definitions and Research Variables Level Optimization of Public Expenditure Level Optimization of Public Expenditure = ( Expenditure Subsidy Grant + Social Assistance Expenditure ) : Total Local Expenditure

Operational Definitions and Research Variables Level of Public Investment Realization of Capital Expenditure : Total Local Expenditure

FITRA ( Indonesian Forum for Budget Transparency ), 2013 INDEX OF PUBLIC INFORMATION DISCLOSURE PROVINCIAL GOVERNMENT 2012 NOKOTAPROVINSIIKIP 1Banda AcehNangroe Aceh Darusalam15 2MedanSumatera Utara39 3Bukit tinggiSumatera Barat59 4Pekan baruRiau15 5Jambi 59 6PalembangSumatera Selatan72 7Bengkulu 15 8Bandar LampungLampung40 9Pangkal PinangKep.Bangka Belitung59 10Tanjung PinangKep Riau- 11JakartaDKI Jakarta70 12BandungJawa Barat42 13SemarangJawa Tengah15 14SerangBanten15 SurabayaJawa Timur15 16Yogyakarta 72 17DenpasarBali15 18MataramNusa Tenggara Barat15 19KupangNusa Tenggara Timur42 20PontianakKalimantan Barat42 21PalangkarayaKalimantan Tengah45 22BanjarmasinKalimantan Selatan15 23SamarindaKalimantan Timur30 24ManadoSulawesi Utara15 25PaluSulawesi Tengah15 26MakasarSulawesi Selatan15 27KendariSulawesi Tenggara15 28Gorontalo 42 29MamujuSulawesi Barat15 30AmbonMaluku15 31TernateMaluku Utara- 32JayapuraPapua15 33ManokwariPapua Barat15

TABLE 3.2. CONTENT INDEX ACCOUNTABILITY Secondary data were processed, 2013 Item AccountabilityWeights Overview of Local Government 1. Statement of Purpose Local Government3 2. Report of the Governor2 3. Report of the Council2 4. Organizational Structure1 5. Internal Control2 6. Personalia2 7. Policy on Health and Safety2 Performance 8. Measurement of performance3 9. Financial Performance Ratio3 Financial Information 10 Review of Financial Report1 Total Weight21

Analysis tools Regression test Local Government Voluntary Disclosure regression models ( PSP ) : PSP = β0 + β1KKD + β2TOBP + β3TIP + β4TKIP + Ɛ * PSP : Pengungkapan Sukarela Pemda KKD : Kemandirian Keuangan Daerah TOBP : Tingkat Optimalisasi Belanja Pemda TIP : Tingkat Investasi Pemda TKIP : Tingkat Keterbukaan Informasi Publik

Procedures and Data Collection Financial characteristics data obtained from Data level of public disclosure of FITRA release in 2013 Voluntary disclosure of data obtained from the public disclosure of the provincial government in May- June 2013 Observations carried out by two researchers to provide objectivity

The average of local government accountability disclosure Statement of purpose local governments governors report board reports organizational structure internal control Personalia policies on health and safety performance measurement financial performance ratios Financial review

The Local Government Accountability Disclosure

Statistic description NMinimumMaximumMeanStd Deviation PSP KKD TOBP TIP TKIP Valid N (listwise)

VariabelNilai MinPemprovNilai MaxPemprov PSP28.00Maluku79.00Jambi KKD0.03Papua Barat0.79Jawa Timur TOBP0.01Lampung; Jambi0.40Nusa Tenggara Timur TIP0.06Jawa Tengah0.32DKI Jakarta TKIP15.00Aceh; Sumbar; Bengkulu; Jateng; Jatim; Kalteng; Kalsel; Sulut;Sulteng;Sulsel; Sultengg; Bali; NTB; Maluku;Papua;Banten ;Papua Barat;Sulbar 72.00DI Yogyakarta Statistic Description

F and t -Test Results of F test count of with a probability less than 0.05 The results of the t test statistic for the regression coefficient ( KKD ) of with a significance of and the regression coefficient ( TKIP ) of with a significance of 0.000

Discussion and findings The Local financial independence has positive effect on the level of voluntary disclosure of government. In contrast to Liestiani (2008 ) and Puspita (2010 ) ; Supports Yunanto (2010 ) The higher the level of local financial independence, the higher the participation of the community in paying taxes, the higher the level of voluntary disclosure ; they are more confident and bold in making disclosures

Discussion and findings Level optimization of public spending does not affect the level of voluntary disclosure Local Government In line with Puspita (2010 ) Receipts and expenditure of social assistance expenditure ( expenditure grants and social assistance ) is possible not recorded in local government accountability therefore it does not affect the level of voluntary disclosure of government

Discussion and findings The level of public investment does not affect the level of voluntary disclosure of local government In line with Puspita (2010 ) Local Government which has a high level of spending does not automatically improve its public disclosure. Not all capital expenditure for infrastructure development and support the economic growth.

Discussion and findings The level of public disclosure affect the level of voluntary disclosure Local Government Availability of information and accessibility of budget information has positive influence on the level of voluntary disclosure of government

Conclusions The Level of local financial independence and the level of public disclosure has positive effect on the level of voluntary disclosure of local government

Limitations and suggestions Data disclosure is not simultaneous with the data of financial statements The data of the public disclosure is only 31 provincial public disclosure. The addition of item in level of voluntary disclosure is better. Other factors that can be added such as the characteristics of the local government, audit results, the characteristics of regional heads etc.