The Role of Internal Control

Oct 13, 2025 by windailys.com 60 views

Factors that Influence the Application of Performance-Based Budgets with Internal Control as Moderating Variables in the Serdang Bedagai Regency Government

Introduction

The implementation of performance-based budgets in the Serdang Bedagai Regency Government is a strategic step to increase the effectiveness of financial management. This study aims to analyze the factors that influence the effectiveness of the implementation of performance-based budgets, with a focus on the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation to the results. In addition, this research also explores the role of internal control as a moderating variable in the relationship between these factors and the effectiveness of the application of performance-based budgets.

Background

The Serdang Bedagai Regency Government has been implementing performance-based budgets as a strategic step to increase the effectiveness of financial management. However, the effectiveness of this implementation is still a concern. The government needs to identify the factors that influence the effectiveness of the implementation of performance-based budgets and the role of internal control as a moderating variable. This study aims to provide valuable insights for the government to formulate policies and strategies to increase the effectiveness of performance-based budget management.

Methodology

This study uses a descriptive research approach with a quantitative method. The population of this study is all employees of the Serdang Bedagai Regency Government, totaling 87 people. The sample used is the entire population, as it is a small number. Primary data is collected through a questionnaire consisting of 72 items. The questionnaire is designed to measure the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation to the results. The data is analyzed using multiple regression methods and residual tests.

Results

The results of this study show that simultaneously, the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation on results have a significant influence on the effectiveness of the implementation of performance-based budgets. In-depth analysis revealed that the commitment variables of all components of the organization, improvement of the administrative system, and orientation to the results partially contributed positively and significantly to the effectiveness of the implementation of performance-based budgets. However, the quality of human resources, awards, and sanctions do not show significant effects.

Discussion

The findings of this study confirm that to increase the effectiveness of performance-based budgets, commitments and good administrative systems are very necessary. The commitment of all components of the organization, improvement of the administrative system, and orientation to the results are the most significant factors that influence the effectiveness of the implementation of performance-based budgets. However, the quality of human resources, awards, and sanctions do not have a significant effect on the effectiveness of the implementation of performance-based budgets.

The Role of Internal Control

Internal control plays an important role in moderating the relationship between these factors and the effectiveness of the application of the budget. That is, good internal control can strengthen the positive effect of organizational commitment and improve the administrative system on the effectiveness of the application of performance-based budgets. With a strong internal control, the organization can ensure that each component in implementing a performance-based budget runs according to the plans and objectives that have been set.

Conclusion

This research provides valuable insights for local governments in formulating policies and strategies to increase the effectiveness of performance-based budget management. A strong commitment of all components of a good organizational and administrative system, combined with effective internal control, can be the key to success in implementing a performance-based budget. Therefore, it is important for the Serdang Bedagai Regency Government to continue to develop and strengthen these aspects in an effort to improve performance and accountability in budget management.

Recommendations

Based on the findings of this study, the following recommendations are made:

The Serdang Bedagai Regency Government should continue to develop and strengthen the commitment of all components of the organization, improvement of the administrative system, and orientation to the results.
The government should implement effective internal control to ensure that each component in implementing a performance-based budget runs according to the plans and objectives that have been set.
The government should provide training and development programs for employees to improve their quality of human resources.
The government should establish a reward system to motivate employees to achieve their goals and objectives.
The government should establish a sanction system to discipline employees who do not meet their goals and objectives.

Limitations

This study has several limitations. The population of this study is limited to all employees of the Serdang Bedagai Regency Government, totaling 87 people. The sample used is the entire population, as it is a small number. The questionnaire used in this study is designed to measure the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation to the results. However, the questionnaire may not be comprehensive enough to measure all the factors that influence the effectiveness of the implementation of performance-based budgets.

Future Research

This study provides a foundation for future research on the implementation of performance-based budgets in local governments. Future research can explore the following topics:

The role of internal control in moderating the relationship between the factors and the effectiveness of the implementation of performance-based budgets.
The impact of the quality of human resources on the effectiveness of the implementation of performance-based budgets.
The effect of awards and sanctions on the effectiveness of the implementation of performance-based budgets.
The role of orientation to the results in the effectiveness of the implementation of performance-based budgets.

References

[List of references cited in the study]

Appendix

[Appendix containing additional information, such as the questionnaire used in the study, the data analysis, and the results of the residual tests]
Q&A: Factors that Influence the Application of Performance-Based Budgets with Internal Control as Moderating Variables in the Serdang Bedagai Regency Government

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the factors that influence the effectiveness of the implementation of performance-based budgets in the Serdang Bedagai Regency Government, with a focus on the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation to the results.

Q: What is the significance of this study?

A: This study provides valuable insights for local governments in formulating policies and strategies to increase the effectiveness of performance-based budget management. A strong commitment of all components of a good organizational and administrative system, combined with effective internal control, can be the key to success in implementing a performance-based budget.

Q: What are the factors that influence the effectiveness of the implementation of performance-based budgets?

A: The factors that influence the effectiveness of the implementation of performance-based budgets are:

Commitment of all components of the organization
Improvement of the administrative system
Quality of human resources
Awards
Sanctions
Orientation to the results

Q: What is the role of internal control in moderating the relationship between these factors and the effectiveness of the application of the budget?

A: Internal control plays an important role in moderating the relationship between these factors and the effectiveness of the application of the budget. That is, good internal control can strengthen the positive effect of organizational commitment and improve the administrative system on the effectiveness of the application of performance-based budgets.

Q: What are the implications of this study for local governments?

A: The implications of this study for local governments are:

To continue to develop and strengthen the commitment of all components of the organization, improvement of the administrative system, and orientation to the results.
To implement effective internal control to ensure that each component in implementing a performance-based budget runs according to the plans and objectives that have been set.
To provide training and development programs for employees to improve their quality of human resources.
To establish a reward system to motivate employees to achieve their goals and objectives.
To establish a sanction system to discipline employees who do not meet their goals and objectives.

Q: What are the limitations of this study?

A: The limitations of this study are:

The population of this study is limited to all employees of the Serdang Bedagai Regency Government, totaling 87 people.
The sample used is the entire population, as it is a small number.
The questionnaire used in this study is designed to measure the commitment of all components of the organization, improvement of the administrative system, the quality of human resources, awards, sanctions, and orientation to the results. However, the questionnaire may not be comprehensive enough to measure all the factors that influence the effectiveness of the implementation of performance-based budgets.

Q: What are the future research directions based on this study?

A: The future research directions based on this study are:

The role of internal control in moderating the relationship between the factors and the effectiveness of the implementation of performance-based budgets.
The impact of the quality of human resources on the effectiveness of the implementation of performance-based budgets.
The effect of awards and sanctions on the effectiveness of the implementation of performance-based budgets.
The role of orientation to the results in the effectiveness of the implementation of performance-based budgets.

Q: What are the practical implications of this study for the Serdang Bedagai Regency Government?

A: The practical implications of this study for the Serdang Bedagai Regency Government are:

To continue to develop and strengthen the commitment of all components of the organization, improvement of the administrative system, and orientation to the results.
To implement effective internal control to ensure that each component in implementing a performance-based budget runs according to the plans and objectives that have been set.
To provide training and development programs for employees to improve their quality of human resources.
To establish a reward system to motivate employees to achieve their goals and objectives.
To establish a sanction system to discipline employees who do not meet their goals and objectives.