Comparative Study of Measurement of Regional Financial Performance After Regional Autonomy between the Binjai City Government and the Pematangsiantar City Government
Introduction
Regional autonomy is a policy implemented by the government to give more authority to local governments in managing their financial resources. However, the success of regional autonomy in improving the financial performance of local governments is still a topic of debate. This study aims to investigate whether there are differences in financial performance between the Binjai City Government and the Pematangsiantar City Government after the implementation of regional autonomy. The financial performance measurement is carried out using several ratios, such as the ratio of regional financial independence, financial dependence ratios, the ratio of the effectiveness of regional revenue, operational expenditure ratios to total expenditure, capital expenditure ratios to total expenditure, growth ratio, and ratio of debt payment coverage (debt Service Coverage Ratio).
Methodology
The data used in this study was a report on the realization of regional income and expenditure for the 2010-2014 period. Data analysis was carried out using statistical analysis which included an analysis of financial ratios and independent sample t tests. The financial ratios used in this study include:
Ratio of regional financial independence
Financial dependence ratios
Ratio of the effectiveness of regional revenue
Operational expenditure ratios to total expenditure
Capital expenditure ratios to total expenditure
Growth ratio
Ratio of debt payment coverage (debt Service Coverage Ratio)
Results
Based on the results of the analysis of financial ratios, it can be concluded that regional autonomy did not succeed in improving the financial performance of the Binjai City Government and Pematangsiantar. This can be seen from the ratio of very low regional financial independence for the two regions, each 7.41% for Binjai and 9.14% for Pematangsiantar. In addition, the financial dependency ratio of the two regions is relatively high, with 85.51% for Binjai and 87.54% for Pematangsiantar. The growth of local revenue also shows a low number, which is 46.36% for Binjai and 47.46% for Pematangsiantar. The ratio of operational expenditure and capital expenditure growth ratios is also very low, with 12.45% and 9.05% respectively for operational expenditure and 33.56% and 12.17% for capital expenditure. However, the ratio of debt payment coverage shows good results, which is 57.51% for Binjai and 49.99% for Pematangsiantar.
Analysis of Independent Sample T Test
From the analysis of the independent sample t test, it was found that there was a significant difference between the financial performance of the Binjai and Pematangsiantar City Government. The average financial performance of the Binjai City Government during the 2010-2014 period was 47,1371, while the average financial performance of the Pematangsiantar City Government was 43,0791. This shows that the financial performance of the Binjai City Government is better than the Pematangsiantar City Government.
Discussion
In the context of regional autonomy, the results of this study highlighted the challenges faced by the two city governments in managing their financial resources. The low financial independence shows high dependence on funds from the center, which can limit the ability of the region to finance local programs and activities independently. Therefore, it is important for the two city governments to find more effective strategies in increasing local revenue and optimizing expenditure in order to maximize regional financial potential.
Conclusion
Thus, this comparative study provides a clear picture of the financial condition of the Binjai City Government and Pematangsiantar post-autonomy, and can be a reference for stakeholders in formulating better policies to improve regional financial performance in the future.
Recommendations
Based on the results of this study, the following recommendations are made:
The Binjai City Government and Pematangsiantar City Government should find more effective strategies in increasing local revenue and optimizing expenditure in order to maximize regional financial potential.
The two city governments should improve their financial independence by reducing their dependence on funds from the center.
The two city governments should prioritize the development of local programs and activities that can generate revenue and improve the financial performance of the region.
Limitations of the Study
This study has several limitations, including:
The data used in this study was limited to the 2010-2014 period, which may not be representative of the current financial condition of the Binjai City Government and Pematangsiantar City Government.
The financial ratios used in this study may not be comprehensive and may not capture all the aspects of regional financial performance.
Future Research Directions
Future research should focus on:
Investigating the impact of regional autonomy on the financial performance of local governments in other regions.
Developing more comprehensive financial ratios that can capture all the aspects of regional financial performance.
Conducting a longitudinal study to examine the changes in regional financial performance over time.
References
[List of references cited in the study]
Appendix
[Appendix containing additional information, such as tables and figures, that are not included in the main body of the study]Frequently Asked Questions (FAQs) about Comparative Study of Measurement of Regional Financial Performance After Regional Autonomy between the Binjai City Government and the Pematangsiantar City Government
Q: What is the main objective of this study?
A: The main objective of this study is to investigate whether there are differences in financial performance between the Binjai City Government and the Pematangsiantar City Government after the implementation of regional autonomy.
Q: What financial ratios were used in this study?
A: The financial ratios used in this study include:
Ratio of regional financial independence
Financial dependence ratios
Ratio of the effectiveness of regional revenue
Operational expenditure ratios to total expenditure
Capital expenditure ratios to total expenditure
Growth ratio
Ratio of debt payment coverage (debt Service Coverage Ratio)
Q: What were the results of the analysis of financial ratios?
A: The results of the analysis of financial ratios showed that regional autonomy did not succeed in improving the financial performance of the Binjai City Government and Pematangsiantar. The ratio of very low regional financial independence for the two regions was 7.41% for Binjai and 9.14% for Pematangsiantar. The financial dependency ratio of the two regions was relatively high, with 85.51% for Binjai and 87.54% for Pematangsiantar.
Q: What were the results of the analysis of independent sample t test?
A: The results of the analysis of independent sample t test showed that there was a significant difference between the financial performance of the Binjai and Pematangsiantar City Government. The average financial performance of the Binjai City Government during the 2010-2014 period was 47,1371, while the average financial performance of the Pematangsiantar City Government was 43,0791.
Q: What are the implications of the results of this study?
A: The results of this study highlighted the challenges faced by the two city governments in managing their financial resources. The low financial independence shows high dependence on funds from the center, which can limit the ability of the region to finance local programs and activities independently. Therefore, it is important for the two city governments to find more effective strategies in increasing local revenue and optimizing expenditure in order to maximize regional financial potential.
Q: What are the limitations of this study?
A: This study has several limitations, including:
The data used in this study was limited to the 2010-2014 period, which may not be representative of the current financial condition of the Binjai City Government and Pematangsiantar City Government.
The financial ratios used in this study may not be comprehensive and may not capture all the aspects of regional financial performance.
Q: What are the future research directions?
A: Future research should focus on:
Investigating the impact of regional autonomy on the financial performance of local governments in other regions.
Developing more comprehensive financial ratios that can capture all the aspects of regional financial performance.
Conducting a longitudinal study to examine the changes in regional financial performance over time.
Q: What are the recommendations of this study?
A: Based on the results of this study, the following recommendations are made:
The Binjai City Government and Pematangsiantar City Government should find more effective strategies in increasing local revenue and optimizing expenditure in order to maximize regional financial potential.
The two city governments should improve their financial independence by reducing their dependence on funds from the center.
The two city governments should prioritize the development of local programs and activities that can generate revenue and improve the financial performance of the region.
Q: What are the implications of this study for policymakers?
A: The results of this study have implications for policymakers in the following ways:
Policymakers should consider the financial performance of local governments when making decisions about regional autonomy.
Policymakers should provide support to local governments in developing their financial resources and improving their financial independence.
Policymakers should prioritize the development of local programs and activities that can generate revenue and improve the financial performance of the region.