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 An Analysis of The Opinion and The Follow-up Status of Auditor Board of Finance (Badan Pemeriksa Keuangan/ BPK) Recommendation on The Local Government Financial Report in West, Central and East Kalimantan

 

Charles Bohlen Purba

Pasca Sarjana Universitas Bhayangkara Jakarta Raya

Email : bohlenpurba@yahoo.com

 

Abstract

 

The recommendation of BPK on the local government financial report (LKPD) constitutes an attempt of improving the finance management and responsibility of the local government entities. The objectives of this study are to analyze and map the progress of the opinion on LKPD as well as to analyze the follow-up status of the BPK recommendation based on the BPK assessment result. The methodology of this research uses bivariate correlation, map of markers radar, and histogram analysis. The opinion on LKPD showed positive and significant progress (sig 0.05) in West Kalimantan from 2007 to 2008 (PC 0.712; sig 0.03) and in 2009 (PC 0.549; sig 0.034); also in Central Kalimantan from 2007 to 2008 (PC 0.635; sig 0.11) as well as in 2010 (PC 0.602; sig 0.018) and 2011 (PC 0.533; sig 0.041); and in East Kalimantan from 2007 to 2008 (PC 0.603; sig 0.017) as well as in 2010 ((PC 0.611; sig 0.016) and 2011 (PC 0.701; sig 0.004). The map of the opinions on LKPD in West Kalimantan changed from narrow zigzag in 2007-2009 into a stable wide trend in 2011 (13 of 15 entities in the circle of the three maps), whereas in Central and East Kalimantan remained zigzag up to 2011. The status “followed up as recommended” was given by BPK to the three studied regions; West Kalimantan with approximately 3,007 cases (59.45%) which amounted 68.336 billion rupiah (29.29%), Central Kalimantan with 3,800 cases (61.77%) which was equal to 126.569 billion rupiah, and finally East Kalimantan with 2,350 cases (55.31%) which resulted in 202.01 billion rupiah and USD 1,126,272,000.

 

1. Foreword

1.1. Background

 

The BPK recommendation on the local government financial report (LKPD) denotes an effort to improve the financial management and responsibility of the local government entities including provinces, districts, and cities. In accordance with the Indonesian Constitution (Undang - Undang Dasar 1945), particularly in Article 23 E point (2) and (3), and the Law No.15 Year 2004 on The assessment of the state finance management and responsibility, especially in Article 21 point (1), the recommendations of BPK are necessary to be followed up by each local government entity in the province/ district/city and the opinions given become references for the improvement in the following year.

According to BPK (2012a), the opinion on the local government finance report (LKPD) is given as a performance appraisal of the financial management of each local government entity as it is mandated, and the follow-up status of the BPK recommendations becomes the local government’s responsibility to improve their financial management. It is important to bear in mind that the objective of the local government finance report (LKPD) is to provide information about the finance position, budget realization, cash-flow, and the finance performance that are useful for the provincial/district/city government to create and evaluate the decisions of resources allocation and utilization in order to promote people’s welfare. According to the Law No 15 Year 2006, the Auditor Board of Finance (Badan Pemeriksa Keuangan/BPK) is mandated to submit the opinions that have been assessed and evaluative recommendations as well as do supervision to the follow-up of the assessment result.

The Law No 15 Year 2004 regulates four categories of opinions, which were also mentioned by Suwanda (2013) in his book about The Strategy of Gaining Unqualified Opinion – Local Government (PEMDA) financial report; they are (1) Unqualified Opinion, (2) Qualified Opinion, (3) Adverse Opinion, and (4) Disclaimer Opinion. The opinion on LKPD acts as an essential parameter of local government’s accountability and transparency in managing the state finance in the region. The positive progress of the opinion on LKPD from year to year becomes an important indicator of the conducive of the ongoing local government.

The follow-up status of the BPK recommendation on the local government financial report (LKPD) is possibly different among local government entities, depending on their quality of human resources, lack of facilities and infrastructure, the area of the region, and the complexity of the problems existing in the regions. Suwanda (2013), stated that the ability of financial administrator to follow up the recommendations given by the auditor is greatly affected by the availability of facilities to exhibit better reporting, the quality and capacity of human resources as well as the perception of the accountable financial report. Further, BPK (2007a), mentioned that the follow-up statuses of the BPK recommendations that are based on the assessment results include “followed up as recommended”, “in process” (incomplete follow-up), “not yet followed up”, or “cannot be followed up”.

The local government entities in Kalimantan, particularly the provinces of West Kalimantan, Central Kalimantan, and East Kalimantan, with their vast regions and limited facilities and infrastructure as well as some other limitations, surely have distinctive achievements and follow-up statuses on their local government financial reports (LKPD). The research is trying to do deeper study of what the local government entities in the three regions in Kalimantan have done regarding the opinion assessment and the follow-up status on LKPD.

 

1.2. Problems Framework

The Law No 15 Year 2004 states that BPK has an authority to assess the local government financial report (LKPD), give necessary recommendation based on the assessment result on LKPD, and monitor the follow-up process based on the recommendation. The mentioned BPK’s duties should be published to the public through an official representative institution. The local council (DPD) of which the members are from all over the country will receive the report of assessment result of the local government financial report (LKPD) directly from BPK in an official meeting between DPD and BPK. However, the report is generally global, superficial, and less known by the public. This is the consideration for the writer to do the research; moreover, according to the law, the findings have to be published widely, deeply and transparently to the public.

This study also intends to analyze the progress of the opinion on LKPD, map the annual achievement, and analyze the follow-up status of LKPD submitted by each local government in the three studied regions. According to Suwanda (2013) and Suroso (2000), the local government financial report (LKPD) is a form of local government's responsibility in managing public finance which is granted by the state under the law. Therefore, it is proper if the detail information on the opinion assessment and the follow-up status of the BPK recommendation on LKPD can be delivered to the public through this study. Schematically, the framework of this study can be seen in Picture 1.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The opinion assessment on the local government financial report (LKPD) is expected to be positive, meaning that there is improvement from year to year and it can be evidently/significantly seen from BPK’s response to LKPD of which accountability can be held by the public. This is to be achieved through this study by developing an analysis of bivariate correlation by which the opinion assessment by BPK on LKPD and its correlation are examined from year to year. If the correlation is significantly positive, there is an improvement of LKPD and it is a good to promote the good image of the region. The opinion assessment, then, will be mapped to find out the position of one local government entity compared to another regarding its opinion on LKPD, distribution pattern, and the opinion progress each year. Hence, a method of markers radar mapping is developed in which the distribution pattern and the progress of the opinions on LKPD are illustrated in the range of radar in the circle map.  

The follow-up status of the BPK recommendation on the local government financial report (LKPD) is regulated in the Indonesian Constitution (Undang - Undang Dasar 1945), particularly in the Article 23 E point (2) and (3) and Law No 15 Year 2004 on The Assessment of The State Finance Management and Responsibility, particularly in the Article 21 point (1). Both laws regulate the importance of the BPK recommendation of the assessment result and the follow-up status to be delivered to the public. On the other side, BPK (2007a) gives details about the follow-up status to the BPK recommendation of the assessment result accomplished by the local government entity which are put into 4 (four) categories namely “followed up as recommended”, “in process” (incomplete follow-up), “not yet followed up”, or “cannot be followed up”. This study uses the histogram analysis to group and show the follow-up status to the BPK recommendation of the assessment result on the local government financial report (LKPD) in each provincial/district/city entity in the three studied regions. The approach can indicate the achievement of each local government entity for the four follow-up categories of statuses including their achievement in the form the amount of saved money.

 

 

 

1.3. Problems Formulation

Referring to the background and framework of the study, several problems that need to be overcome in the research of the opinion and follow-up status of BPK assessment result on the local government financial report of (LKPD) in West Kalimantan, Central Kalimantan, and East Kalimantan can be formulated into the following questions:

a.    How was the progress of the opinion on the local government financial report (LKPD) during 2007-2011 in West Kalimantan, Central Kalimantan, and East Kalimantan as a manifestation of accountability in managing regional finance?

b.    How was the map of opinion distribution on the local government financial (LKPD) in West Kalimantan, Central Kalimantan, and East Kalimantan?

c.       How was the follow-up status of the BPK recommendations\ based on the BPK assessment result for the period 2008-2012 in West Kalimantan, Central Kalimantan, and East Kalimantan, how many recommendations of the assessment result were followed up, in process, not yet followed up, or cannot be followed up?

 

1.4. The Objectives of Research

The objectives of this research are:

a.    To analyze the progress of opinion on the local government financial report (LKPD) in West Kalimantan, Central Kalimantan, and East Kalimantan.

b.    To map the opinions on the local government financial report (LKPD) in West Kalimantan, Central Kalimantan, and East Kalimantan.

c.       To analyze the follow-up status of BPK recommendation of the assessment result during 2008-2012 in West Kalimantan, Central Kalimantan, and East Kalimantan.

 

 

2. Theoretical Concept

2.1. Legal Concept and Type of Local Government Financial Report (LKPD)

 

            According to the Regulation of Minister of Domestic Affairs No 13 Year 2006 Article 1 point 6, the finance managed by the local government is completely the regional’s rights and responsibilities to execute the regional governance that can be valued in the amount of money including all kinds of properties related with the mentioned rights and responsibilities. Accordingly, the management of the regional’s rights and responsibilities must be reported by the regional officials transparently and accountably.

            Further, Peraturan Pemerintah/PP (Government Regulation) No 24 Year 2005 on The standard of Government Accountancy (PSAP) No 1 paragraph 9 states that the structured local government financial report involves the finance position and all transactions done by the entity that reports. BPK, meanwhile, states that the management of the local government financial report (LKPD) is a manifestation of the accountability of the local or state finance management. In line with the Indonesian Constitution (Undang –Undang Dasar 1945), BPK holds its obligation and mandate to assess the financial report. The implementation of BPK’s obligation and mandate has been getting bigger along with the existence of regional autonomy in managing the regional finance. The state finance management that used to be centralized in the state capital now is delegated to every province/district/city.

            The main objective of the financial report is to provide information about the finance position, budget realization, cash-flow, and financial performance of the entity that reports. It is beneficial for the users to create and evaluate the decisions related with the state finance management in the region. The scheme of the budget utilization affects the type and the substance of the financial report that has to be prepared by the provincial/district/city government. According to Suroso (2010), the objectives of the financial report by the local government are to provide useful information for decision making and to represent the accountability of the entity that reports on its entrusted resources by:

a.    Providing information about the position of economic resources as well as government’s responsibilities and fund equity.

b.    Providing information about the changes of economic resources position as well as government’s responsibilities and fund equity.

c.    Providing information about the source, allocation and the utilization of the economic resources.

d.    Providing information about how the entity funds their activities and fulfills their cash need.

e.    Providing information about the government’s potential to fund the exercise of governmental activities.

f.     Providing information that is useful for evaluating the entity’s ability to fund their activities.

 

The financial report that has to be presented by the local government involves at least the Report of Budget Realization, Balance Sheet, Cash-flow Report and Notes of Financial Report. This is also stated by the Law No 15 Year 2004 and the Local Government of Malang District (2011) that oblige the local head to prepare the Report of Budget Realization (LRA), Cash-flow Report (LAK), and Notes of Financial Report (CALK) to be assessed by the official audit board such as BPK.

Every report has its format based on the objective and type of reported data. For

Report of Budget Realization (LRA), it has 2 (two) formats that are LRA-SAP format and LRA-APBD format. Both of them differ in their accounts grouping, for example, LRA-SAP format has a group of Operating Expenditure while LRA-APBD format has group of Indirect Expenditure and Direct Expenditure. In LAK, the accounts are grouped into in-coming cash-flow and out-coming cash flow.

 

2.2 The Opinion and the Accountability of Local Government Financial Report (LKPD)

2.2.1 The Opinion on Local Government Financial Assessment (LKPD)

 

            Milal (2013) stated that the opinion on LKPD is a statement of a professional assessment or inspection done by BPK on the qualification of financial report submitted by local government entity in the form of LKPD. The result of the assessment is a form of public report on the budget utilization written in a financial report compiled by the local government. Such financial report functions as an accountability responsibility to the society or public in terms of the state finance management mandated to them.

            According to Mulyadi (2002), there are five types of opinions on the audited financial report, namely (1) unqualified opinion, (2) unqualified opinion with an explanation attached to the raw audit report, (3) qualified opinion, (4) adverse opinion, (5) disclaimer opinion. The procedures of giving such opinion by BPK are regulated by the Law No. 15 Year 2004 as one of the forms of the auditing result on the financial report. In detail, the four opinions are as follow:

1.    Unqualified Opinion—It states that the financial report is appropriately presented in terms of materials, finance position, benefit, and cash flow according to general accounting principles.

2.    Qualified Opinion—It states that financial report is appropriately presented in terms of materials, finance position, benefit and cash flow of the entity according to general accounting principles, except the effect of the matters that are excluded. The conditions that make auditor grant the qualified opinion are as follow:

a.    There is no sufficient evidence or there is limitation of the scope of such audit that causes the auditor concludes that he or she cannot grant the qualified opinion or he or she concludes that he or she does not give an opinion.

b.    The auditor is convinced based on his or her audit result that the financial report contains deviation from general accounting principles prevailing in Indonesia and such deviation materially impacts on the state finance. Thus, he or she decides not to grant the qualified opinion.

3.    Adverse Opinion—It states that the financial report does not appropriately present the finance position, benefit, and cash flow of certain entity according to general accounting principles.

4.    Disclaimer Opinion—It states that such opinion is granted because the auditor conducts an audit that does not have sufficient scope for the auditor to grant an opinion on the financial report and if the auditor is in an dependent condition in terms of his or her relationship with his or her client.

 

Every governmental agency, including the entity of the local government in the province, district or city, expects the Qualified Opinion for its financial report. A Qualified Opinion is an instrument needed in making an appropriate decision as a form of the accountability of such financial report. In order to get the Qualified Opinion, every local government needs to do various efforts starting from selecting funded programs, controlling the realization of the programs, revising the system of managing and reporting the finance, to guiding and improving the human resources who manage and prepare the financial report (Rahmanti and Prastiwi, 2011).

The category of the opinion granted to every entity of local governments of province, district and city highly depends on the quality of their financial report. In this case, the role of all parties involved in the preparation of LKPD, including the role of local auditors who conduct the internal supervision—auditing, reviewing, evaluating, monitoring as well as other forms of supervision—is expected to be able to improve the quality of LKPD.

 

2.2.2. The Accountability of LKPD

            As the apparatus of government internal supervisor (APIP), BPKP assists to realize the accountability in reporting the state and regional finance. In order to support the realization of the accountability of finance reporting, BPKP runs several activities such as (Suwanda, 2013 and Milal, 2013):

·         Assisting local government in preparing the financial report,

·         Reviewing local government financial report before audited by BPK,

·         Following up the BPK findings,

·         Assisting local government in revising their reporting system,

·         Implementing the local management information system (SIMDA),

·         Socializing, establishing task force, holding SPIP workshop, and

·         Improving the capacity of human resources who manage local finance and APIP.

 

In general, there are several factors causing a financial report of a local government cannot be granted the Qualified Opinion. Some of the factors are the presentation which does not fully meet the government accounting standard (SAP); a weak internal control system; the unorganized government’s inventories; the incompatible procurement with the prevailing regulation; and the incapable human resources who manage finance.

            According to BPK (2007b), the accountability of an LKPD is determined by the result of the opinion assessment on the LKPD. Firmanzah (2012) stated that the result of the opinion assessment on the LKPD becomes one of the indicators of the performance of a ministry or governmental agency. The Qualified Opinion is the goal of public finance management as demanded by the bureaucratic reform. The Qualified Opinion is an indicator of the success of bureaucratic reform in the relevant ministry or agency. The accountability and transparency that are the responsibility forms of state finance utilization need to be developed as a form of accountability to the people. The financial report prepared by either central government institution or local government institution is the reflection of the accountability of utilizing the state finance. The better and the more responsible a local government uses its budget the more opportunity for a financial report to be granted the Qualified Opinion by BPK.

 

2.3. The Follow-up of BPK Recommendation on LKPD

 

According to the Government Regulation No. 24 Year 2005 regarding the Governmental Accounting Standard, The Conceptual Framework of Governmental Accounting in paragraph 21 to paragraph 22 states that a financial report is made in order to provide relevant information on the finance position and all transactions done by an entity of province, district, or city. Every provincial/district/city entity has an obligation to systematically and structurally report the implementation of all activities or programs in a period of reporting time to be assessed or audited by an authorized audit institution. In this context, such authorized audit institution is BPK.

Besides granting the opinion, BPK also gives the recommendation that must be followed up. Generally, BPK gives the recommendation on the LPKD after considering some factors, such as:

a.    Accountability— A recommendation related to the accountability will be granted if there is a shortcoming in terms of the accountability in managing the resources as well as the implementation of the policies entrusted to the provincial, district, and city government in order to achieve the determined goals periodically.

b.    Managerial—Recommendation has something to do with managerial matters if there is doubt and shortcoming in terms of planning and managing state finance as well as an effective control on all assets, liabilities and equities managed by local government.

c.    Transparency—Recommendation is given in case the financial information given is still lack of transparency. Besides, there is unclear information that must be published to public in order to create a good governance.

d.    Integrational equity—Recommendation related to integrational equity is given in order to assist parties holding financial management in a region or district in terms of the adequacy of government’s income in the period of reporting to finance all allocated expenses and whether the next generation is assumed to be responsible for the expenses.

 

In order to obey the Law No. 15 Year 2004 Article 20, BPK monitors the implementation of the follow-up of such recommendation of the assessment result as well as informs the monitoring result of the follow up to the parliament in the form of semester inspection. The IHPS contains the data from the monitoring action of the implementation of the assessment result on the management and responsibility of state finance done by every head of the province, district or city.

            The follow-up of the BPK recommendation is ordered by Law No. 33 Year 2004 (article 103) related to the transparency and accountability of the state finance management by the government apparatus, including the local government. It is stated in the law that the information included in the information system of the local finance as mentioned in Article 101 is the open data which can be known, accessed and obtained by public. Thus, it can be concluded that the transparency and accountability of the local finance are the responsibility of the local government related to an open and honest local finance management to the public through media in form of a financial report that can be accessed by various and relevant parties because public has the right to get and to know such information. Therefore, any findings of the BPK inspection or assessment must be followed up in terms of the transparency and accountability of the report in the future.

According to BPK (2009), the findings of an inspection or an assessment that are declared to be followed up by BPK are those of such inspection or assessment that are recommended to be followed up by the entity of province, district or city so that the financial management and responsibility can be improved by the relevant entity. For example, a finding of an audit or an inspection contains a recommendation of billing an overpayment or a fine that hasn’t been collected yet and the money restored from such billing must be deposited in the state or local treasury. Later, the follow up of the inspection finding will be considered as accomplished if the relevant government of province, district, or city has deposited the money to state treasury and BPK has accepted the documents of the depository. On the other side, if BPK has not accepted all the documents of the depository then the follow up of the inspection or assessment finding will be stated unfinished in terms of follow-up status.

 

3. RESEARCH METHODOLOGY

3.1. Research Time and Venue

The research was conducted from June to October 2013. The research took place in West Kalimantan, Central Kalimantan and East Kalimantan. The data were taken from 15 selected provincial, district, or city governments in the three provinces as presented in Table 1.

 

No	Entity of Provincial, District, and City Government
	West Kalimantan	Central Kalimantan	East Kalimantan
1.	Prov. West Kalimantan	Prov. Central Kalimantan	Prov. East Kalimantan
2.	District of Bengkayang	District of Barito Selatan	District of Berau
3.	District of Kapuas Hulu	District of Barito Timur	District of Bulungan
4.	District of Kayong Utara	District of Barito Utara	District of Kubar
5.	District of Ketapang	District of Gunung Mas	District of Kukar
6.	District of Kubu Raya	District of Kapuas	District of Kutim
7.	District of Landak	District of Katingan	District of Malinau
8.	District of Melawi	District of Kobar	District of Nunukan
9.	District of Pontianak	District of Kotim	District of Paser
10.	District of Sambas	District of Lamandau	District of PPU
11.	District of Sanggau	District of Murung Raya	District of Tana Tidung
12.	District of Sekadau	District of Pulang Pisau	Balikpapan city
13.	District of Sintang	District of Seruyan	Bontang city
14.	Pontianak city	District of Sukamara	Samarinda city
15.	Singkawang city	Palangkaraya city	Tarakan city

 

     

3.2 Types of Data and Methods of Collecting Data

The collected data can be categorized into primary and secondary data which are related to the results of BPK’ assessment on the LKPD in every entity of the selected provincial, district, and city governments in West Kalimantan, Central Kalimantan, and East Kalimantan. Such data cover:

a.    LKPDs of the 2007 – 2011 period.

b.    Data of the assessment of the accountability of the financial management of the local government in the period 2007 - 2012.

c.    Data of the findings and recommendations of BPK assessment.

d.    Data of the number of cases that were followed up and weren’t followed up according to the BPK recommendation in the period 2008 – 2012.

e.    Data on currencies (rupiah or other currencies) attached to the BPK recommendation in the period 2008 – 2012.

f.     Data on the state’s loss that could be recovered in the period 2008 – 2012.

g.    Data on the state’s loss that was deposited into state treasury in the period 2008 – 2012.

 

    Data were gathered using direct observation and interview technique. Direct observation was conducted by tracking, examining and reviewing the data of financial report, the recommendations of BPK assessment results as well as the follow-up progress of the 15 entities.  Interviews were conducted to the relevant parties in every entity of local government such as the representatives of technical agency in the regions, staff of KPPN, staff of regional BPK branch offices, and many others.

 

 

3.3 Data Analysis

There are three analysis used in the research, namely bivariate correlation analysis, markers radar mapping, and histogram analysis. Bivariate correlation analysis is used to find out the progress of the opinions on LKPD. It is done by analyzing the correlation from year to year. Sarwoko (2006) stated that bivariate correlation method assists to analyze the correlation or relationship between a variable to another variable which are involved in a chain of interaction. Such correlation will reflect the level of relationship or correlation of a variable on another variable in the interaction. Based on the correlation coefficient values ??obtained, the association / correlation / relationship of a variable to the other variables can be grouped into four (Sarwono, 2006), namely: the relationship (correlation) is weak: 0 to 0.25, the relationship (correlation) is fair:> 0 , from 25 to 0.5, the relationship (correlation) is strong:> 0.5 to 0.75, the relationship (correlation) is very strong:> 0.75 - 1 This value can be positive and negative, where positive means if there is a positive correlation or progress towards the opinion on LKPD from year to year, while negative means if there is a negative correlation against the opinion on LKPD. The correlation or the progress of the opinion on LKPD can be trusted when it has significance (sig) <0.05.

The method of markers radar is used to map the assessment result of the opinion on LKPD during the period 2007 - 2011 for the entity of province/district/city selected in each province. The range of radar on the map is divided into 4 (four). The first circle means Not Giving Opinion (Disclaimer Opinion). Later, the second circle represents the improper opinion (Adverse Opinion). Next, the third circle means that the opinion is fair with exception (Qualified Opinion). The last, the fourth circle is for fair without exception opinion (Unqualified Opinion) (Mustaruddin, et. al, 2011). Referring to this, the better opinion on LKPD the wider the range of radar vice versa. The zig-zag map of opinion on LKPD shows the various achievement of opinion on LKPD in a particular year, whereas a stable map of opinion on LKPD indicates the relatively same achievement of opinion on LKPD in a given year for the local government entities that are examined in each province.

The histogram analysis is used to determine the follow-up status of the BPK recommendation based on the assessment result on the Local Government Finance Report (LKPD) for each entity of province/district/city selected in the three provinces. According to BPK (2007a), the follow-up statuses of BPK recommendation include “followed up as recommended”, “in process” (incomplete follow-up), “not yet followed up”, and “cannot be followed up”. Related to this, therefore the provincial/district/city entity selected in the three provinces will be analyzed to decide what their follow-up status of BPK recommendation on LKPD is and then a histogram is made based on it.      

 

4. Results & Analysis

4.1. The progress of the opinions on LKPD

4.1.1. The progress of the opinions on LKPD in West Kalimantan

 

The opinion on the Local Government Financial Report (LKPD) constitutes a substantive assessment of the financial report submitted annually by the government both at central and local levels. The assessment result, whether good or bad, becomes the parameter of the accountability of the state finance utilization entrusted to the government officials. The consistency of the accountability of the reporting by the officials can be seen from the progress and the correlation degree of the opinion on the financial report from one year to another year. Table 1 presents the analysis of the progress of the opinions on LKPD in the province of West Kalimantan.

 

Table 1.The progress of the opinions on LKPD in West Kalimantan

		X1 (2007)	X2 (2008)	X3 (2009)	X4 (2010)	X5 (2011)
X1 (2007)	Pearson Correlation	1	,712**	,549*	,460	,330
	Sig. (2-tailed)		,003	,034	,084	,230
	N	15	15	15	15	15
X2 (2008)	Pearson Correlation	,712**	1	,417	,563*	,000
	Sig. (2-tailed)	,003		,122	,029	1,000
	N	15	15	15	15	15
X3 (2009)	Pearson Correlation	,549*	,417	1	,094	,219
	Sig. (2-tailed)	,034	,122		,738	,432
	N	15	15	15	15	15
X4 (2010)	Pearson Correlation	,460	,563*	,094	1	,537*
	Sig. (2-tailed)	,084	,029	,738		,039
	N	15	15	15	15	15
X5 (2011)	Pearson Correlation	,330	,000	,219	,537*	1
	Sig. (2-tailed)	,230	1,000	,432	,039
	N	15	15	15	15	15
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

 

Based on Table 1, the opinions on LKPD in 2007 had a strong positive correlation with those in 2008 and 2009 as indicated by the PC value (Pearson correlation) and the positive correlation values of the opinions in 2007, 2008 and 2009 were in the range of <0.5 to 0.75, which respectively reached 0.712 and 0.549. The PC value can be trusted because it has sig <0.05, respectively 0.03 and 0.034. This analysis indicates that the accountability of the financial report provided by the 15 government entities of province/district/city in West Kalimantan consistently increased from 2007 to 2008 and in 2009. Overall, in 2007, the accountability of LKPD of the government officials in West Kalimantan tended to improve as indicated by the values of PC that were positive for all correlations (Table 1), although not all is real/significant. Table 2 presents the assessment results of the opinions on LKPD in the province of East Kalimantan from 2007 to 2011.

 

Table 2. The opinions on LKPD in West Kalimantan in 2007 - 2011

No	Local Government Entities	The opinions on LKPD
		2007	2008	20 QO 09	2010	2011
1	Prov. West Kalimantan Barat	DO	DO	QO	QO	QO
2	District of Bengkayang	DO	AO	DO	QO	QO
3	District of Kapuas Hulu	AO	AO	DO	QO	QO
4	District of Kayong Utara	-	DO	DO	QO	QO
5	District of Ketapang	QO	QO	QO	QO	QO
6	District of Kubu Raya	-	-	AO	AO	QO
7	District of Landak	AO	AO	AO	QO	QO
8	District of Melawai	DO	DO	AO	AO	AO
9	District of Pontianak	QO	QO	QO	QO	QO
10	District of Sambas	DO	QO	QO	QO	QO
11	District of Sanggau	QO	QO	QO	QO	QO
12	District of Sekadau	DO	DO	DO	QO	QO
13	District of Sintang	QO	QO	QO	QO	QO
14	Pontianak City	QO	DO	QO	QO	UO
15	Singkawang City	QO	QO	AO	QO	QO

Unqualified Opinion (UO), Qualified Opinion (QO), Adverse Opinion (AO), and Disclaimer Opinion (DO). 

Source: BPK (2012b)

 

The strong and significant correlation also happened to the opinions on LKPD from 2008 to 2010 (with a value of 0.563 PC sig <0.05 ie 0.09) as well as for the year 2010 and 2011 (value of 0.537 PC with sig 0.039). This is relevant to the assessment results on LKPD opinions in Table 2, where the local government entities in Central Kalimantan achieved the opinions of Qualified Opinion (QO) and Unqualified Opinion (UO). There were 6 (six) entities in 2008, and the number increased to 13 entities in 2010 and 14 entities in 2011. District of Melawai was the only entity that got Adverse Opinion (AO) in 2011. According to the Local Government of West Kalimantan (2013), the Adverse Opinion (AO) for District of Melawai on their LKPD was due to the low quality of the human resources who manage the financial report and there was no special guidance for them. Furthermore, the location of Melawai district that is away from the provincial capital and directly adjacent to the province of Central Kalimantan results in the difficult access to the area, including for the development and training of the government officials in the region.

 

Based on Table 2, in the period of 2007-2011, there was 1 (one) local government entity in the province of West Kalimantan that obtained Unqualified Opinion (UO) in 2011; that was Pontianak city. The Unqualified Opinion (UO) on LKPD assessment is the best result and can be considered to be perfect showing accountability, transparency, and freedom from irregularities. Given the limitations of the existing human resources quality, facilities and infrastructure, as well as the complexity of the problems that exist in the area, the Qualified Opinion (QO) on LKPD is considered as good achievement in the current condition. One indication of the province/district/city that is