Abraham Busiara, Mesak Iek, Halomoan Hutajulu, Muammar Rinaldi

Assessing Regional Government Financial Performance through Financial Ratio Analysis: A Case Study of Jayawijaya Regency, 2013–2023

Introduction

Assessing regional government financial performance through financial ratio analysis: a case study of jayawijaya regency, 2013–2023. Analyze Jayawijaya Regency's financial performance (2013-2023) via financial ratios. Reveals high PAD effectiveness but critical central transfer dependence. Identifies fiscal limits & policy needs.

Abstract

This study analyzes the financial performance of the Jayawijaya Regency Government from 2013 to 2023 using key financial ratios: autonomy, effectiveness, growth, and efficiency. The research employs a mixed-method approach, combining quantitative analysis of budget realization data with qualitative insights from key informants. The results show that while the effectiveness of locally generated revenue (PAD) was high—averaging 166.38%—the autonomy ratio remained critically low at 6.44%, reflecting substantial dependence on central transfers. Growth in revenue and expenditure was also suboptimal, falling below 30%, while efficiency ratios hovered around 99%, indicating limited fiscal flexibility. Strategic responses identified include digital tax reform, diversification of PAD sources, and creation of local enterprises. Despite promising policy directions, structural limitations such as geographic isolation and administrative capacity remain major obstacles. The study concludes that sustainable fiscal management in special autonomy regions requires not only technical effectiveness but also systemic reforms in institutional governance and local economic empowerment. The findings offer a valuable reference for policymakers seeking to enhance regional financial resilience in Indonesia's decentralized governance framework.

Review

This study undertakes a timely and relevant analysis of regional government financial performance, focusing on the Jayawijaya Regency over an extensive 11-year period from 2013 to 2023. Employing a robust mixed-method approach, which intelligently combines quantitative analysis of budget realization data with qualitative insights from key informants, the research provides a comprehensive and nuanced view of local fiscal health. Its focus on critical financial ratios—autonomy, effectiveness, growth, and efficiency—offers a structured and highly pertinent framework for assessing the intricacies of local government finance, especially within the complex landscape of Indonesia's decentralized governance. The findings present a compelling and somewhat sobering picture, revealing both commendable aspects and significant structural challenges. A notable strength lies in the high effectiveness of locally generated revenue (PAD), averaging an impressive 166.38%, suggesting strong collection capabilities. However, this positive indicator is starkly contrasted by a critically low autonomy ratio of 6.44%, underscoring a pervasive and problematic dependence on central government transfers. Further concerns arise from suboptimal growth in both revenue and expenditure, falling below 30%, which points to limited expansion of the fiscal base. While efficiency ratios hovering around 99% might seem positive, they paradoxically indicate restricted fiscal flexibility. The abstract effectively highlights the persistent structural limitations, such as geographic isolation and administrative capacity, which fundamentally impede sustainable fiscal development despite promising strategic responses like digital tax reform and diversification of PAD sources. The study's conclusion, emphasizing the necessity of systemic reforms in institutional governance and local economic empowerment beyond mere technical effectiveness, is a crucial and insightful contribution. By identifying practical strategic responses while simultaneously acknowledging inherent structural obstacles, the research provides a grounded and realistic perspective for policymakers seeking to enhance regional financial resilience. This work serves as a valuable reference, particularly for special autonomy regions within Indonesia's decentralized framework, offering concrete data and actionable insights. Future research could potentially build on these findings by exploring the implementation challenges of the proposed reforms or by conducting comparative analyses with other regions facing similar developmental impediments.

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