International Journal of Economic Research and Financial Accounting (IJERFA)

Mitigating Procurement Fraud through Strengthening Internal Control Systems and Risk-Based Audits

Nurhidayah Dalimunthe — 2026-07-05

This conceptualization paper proposes an integrated framework to mitigate fraud in government procurement by strengthening the Internal Control System and Risk-Based Audit. This framework is built on the Fraud Triangle Theory, which emphasizes that fraud can occur due to pressure, opportunity, and rationalization, with a primary focus on reducing the opportunity factor through effective control and oversight mechanisms. This contextual framework was developed to address gaps in the literature that generally discuss Fraud, Internal Control Systems, and Risk-Based Audits separately without explaining the synergistic relationship between the three in the context of government procurement. In the proposed framework, the Internal Control System is positioned as a preventive control mechanism aimed at reducing the opportunity for Fraud to occur, while Risk-Based Audit functions as a detection and corrective control mechanism that ensures the effectiveness of controls and the organization's ability to respond to emerging risks. The synergy between these two mechanisms is expected to strengthen procurement fraud mitigation, increase transparency, accountability, integrity, effectiveness, and efficiency in public resource management. This conceptual framework provides a theoretical contribution by integrating the Fraud Triangle Theory with public sector control and oversight practices, while offering practical insights for Government Internal Supervisory Apparatus (APIP), internal auditors, procurement managers, and policymakers in designing more proactive and sustainable fraud prevention strategies. Furthermore, the proposed framework can serve as a basis for future empirical research.

Analysis of Investor Behavior in Mutual Fund Investment Decision-Making Among Lecturers at Ichsan Sidenreng Rappang University

Andi Sri Kumala Putri P — 2026-07-05

This study aims to analyze the behavior of lecturers at Ichsan Sidenreng Rappang University in making mutual fund investment decisions, identify factors that influence investment decisions, and understand lecturers' perceptions of investment risks and benefits. The research uses a qualitative approach with phenomenological methods. The research informants consisted of five active lecturers who had or were investing in mutual funds and were selected through purposive sampling techniques. Data was collected through in-depth interviews and documentation, then analyzed using Miles and Huberman's interactive model which included data reduction, data presentation, and conclusion drawn. The results of the study show that mutual fund investment decisions for lecturers are influenced by initial knowledge, financial literacy, risk perception, ease of disbursement of funds, social media information, friend advice, and loss experience. Lecturers tend to do analysis before investing, but the analysis is not yet fully in-depth. These findings suggest that higher education levels do not necessarily guarantee completely rational investment decisions. The lecturer's investor behavior reflects a combination of rational considerations and psycho-social influences, so it is in line with the behavioral finance perspective that financial decisions are influenced by perceptions, emotions, experiences, and the social environment.

Fraud in the Public Sector: Analysis of Causes, Impacts, and Prevention Efforts in Government Financial Management

Khairunisa Khairunisa — 2026-07-02

This study analyzes the phenomenon of fraud in the public sector, focusing on government financial management. Fraud in this sector is often more prominent than in the private sector due to the characteristics of financial management systems that tend toward centralization and lack of transparency. The main causes of fraud include weaknesses in internal controls, lack of accountability, and the presence of pressure, opportunity, and rationalization as explained by the Fraud Triangle, Fraud Diamond, and Fraud Hexagon theories. Common types of fraud include bribery, abuse of authority, embezzlement of state assets, and extortion. The impact of fraud is very detrimental — not only causing significant financial losses to the state, estimated at hundreds of billions of dollars annually, but also damaging the government's image and eroding public trust. To prevent fraud, comprehensive efforts are required, including increased transparency, strengthened accountability, implementation of effective internal control systems, and the use of forensic accounting and investigative auditing. Additionally, the implementation of good governance and the use of fraud analytics play an important role in detecting and preventing unusual financial movements. This study concludes that fraud prevention in the public sector requires a sustainable multi-dimensional approach to maintain the integrity and efficiency of state financial management.

Government Procurement and Services Accounting System

Sri Handayani — 2026-07-02

This study aims to analyze the Government Procurement and Services Accounting System as an important mechanism for improving transparency, accountability, and efficiency in public financial management. Government procurement of goods and services is not only an administrative activity, but also a strategic process that determines the quality of public spending, service delivery, and institutional performance. In practice, procurement activities must be supported by an effective accounting system to ensure that every transaction is properly recorded, verified, reported, and monitored according to applicable regulations. The main problem addressed in this study is the need for a procurement and accounting system that can reduce administrative errors, prevent budget misuse, strengthen internal control, and provide accurate financial information for decision-making. A weak procurement accounting system may lead to delayed payments, inaccurate reporting, inefficient budget realization, and low public trust. Therefore, integration between procurement procedures and accounting records is essential to ensure that government spending is transparent, accountable, and aligned with public service objectives. This study uses a descriptive qualitative approach through literature review, regulatory analysis, and conceptual examination of procurement and accounting practices in the public sector. The discussion focuses on procurement planning, supplier selection, contract implementation, invoice verification, budget realization, financial recording, and reporting. The findings indicate that an effective government procurement and services accounting system should be supported by clear procedures, competent human resources, digital information systems, internal control mechanisms, and compliance with public sector accounting standards. The study concludes that a well-designed procurement and accounting system can improve the quality of public financial governance by ensuring proper documentation, reducing fraud risk, increasing budget efficiency, and supporting timely public service delivery. Therefore, government institutions need to strengthen system integration, improve staff capacity, enhance digital procurement platforms, and maintain accountability in every stage of procurement and financial reporting.

Strengthening Public Procurement Governance Through the Electronic Procurement System (SPSE): A Conceptual Framework for Local Governments

Cyndi Adelia — 2026-07-02

This conceptual paper develops an integrative framework for strengthening public procurement governance in local governments through the implementation of the Electronic Procurement System (SPSE). SPSE serves as a digital governance mechanism that enhances procurement transparency, promotes public accountability, and supports the realization of good procurement governance. Drawing upon Agency Theory and the principles of New Public Management (NPM), the proposed framework illustrates how SPSE contributes to more transparent, accountable, and efficient procurement processes, ultimately fostering greater public trust in government institutions. The framework offers both theoretical and practical contributions by providing insights into the role of digital procurement systems in public sector governance reform. Furthermore, it serves as a reference for local government practitioners in designing procurement governance strategies and establishes a foundation for future empirical research on the effectiveness of SPSE implementation in the public sector.

Budget-Variance Efficiency in Local Government Procurement: Evidence from Central Java Regencies and Municipalities, Indonesia, 2025

Rizen Cariswan Grace Hura — 2026-07-02

Public procurement plays a central role in public financial management because it converts approved budget allocations into goods, services, works, and operational inputs for public administration. This study evaluates procurement budget efficiency in regency and municipality governments in Central Java Province, Indonesia, for fiscal year 2025 by comparing procurement planning values with procurement realization values. A descriptive quantitative design is employed using secondary data from the official open dataset issued by the National Public Procurement Agency of Indonesia (LKPP). The analysis covers 35 local governments, consisting of 29 regencies and 6 municipalities. Budget efficiency is treated as a budget-variance indicator and is measured through nominal efficiency and efficiency percentage. The results indicate that aggregate procurement planning reached Rp34.606 trillion, whereas aggregate realization reached Rp15.024 trillion, creating a positive variance of Rp19.582 trillion or 56.59 percent. At the local government level, the mean indicator was 54.07 percent and the distribution varied considerably across regions. Kota Pekalongan showed the highest indicator at 83.78 percent, while Kabupaten Temanggung showed the lowest at 11.84 percent. These results should not be read as a complete evaluation of procurement performance, since lower realization may reflect price efficiency but may also arise from package cancellation, reduced volume, planning overestimation, or delayed implementation. The study contributes to public sector accounting by illustrating how official open procurement data can support local budget performance analysis while stressing the need for metadata verification.

Taxation in the Public Sector: Analysis of Effectiveness, Contribution, and Strategies for Strengthening Regional Tax Revenue in Binjai City

Adinda Rizki Ramadhana Matondang — 2026-07-02

This study aims to analyze the condition of taxation in the public sector, especially regional taxes, in Binjai City, North Sumatra Province, by highlighting the level of effectiveness of collection, its contribution to Regional Original Revenue (PAD), as well as factors that affect taxpayer compliance and efforts to digitize tax services. The research uses a qualitative descriptive approach with secondary data derived from the Binjai City Regional Revenue and Expenditure Budget (APBD) realization report, documents from the Binjai City Regional Finance, Revenue, and Asset Management Agency (BPKPAD), as well as literature reviews from journal articles published in the last five years. The results of the study show that the realization of Binjai City's regional taxes in 2024 will only reach around 56.4 percent of the set target, so the level of effectiveness is classified as not optimal, although the contribution of regional taxes to PAD remains in a fairly good category. Factors such as low taxpayer awareness, limited supervision resources, not optimal service digitization system, and the determination of tariffs that are considered disproportionate for micro business actors are the main reasons why these targets have not been achieved. This study recommends strengthening taxpayer databases, expanding digital-based tax services, and reviewing tariff policies to be more fair, as a strategic step to increase Binjai City's regional tax revenue in the future.

Analysis Of Strategies To Improve Umkm Participation In Local Government Procurement Of Goods And Services

Rinawati Tumanggor — 2026-07-05

This study aims to analyze strategies to improve Micro, Small, and Medium Enterprise (MSME/UMKM) participation in local government procurement of goods and services. MSMEs have an important role in supporting regional economic growth, creating employment opportunities, and strengthening local business competitiveness. However, their involvement in government procurement remains limited due to several challenges, including low digital literacy, limited understanding of procurement procedures, weak administrative readiness, lack of access to information, limited product standardization, and difficulties in using electronic procurement platforms such as the local e-catalogue.

This study uses a qualitative descriptive approach to examine the barriers faced by MSMEs and identify strategic efforts that can increase their participation in local government procurement. Data may be collected through interviews, observation, and documentation involving MSME actors, local government procurement officials, and relevant agencies responsible for MSME development. The analysis focuses on procurement accessibility, institutional support, digital readiness, business capacity, and the effectiveness of local government policies in encouraging MSME participation.

Optimizing Government Goods and Services Procurement Performance Through Digital Procurement Transformation: A Conceptual Framework for Public Organizations

Diva Maulidia — 2026-07-05

This conceptualization paper proposes an integrated framework for optimizing government procurement performance through digital procurement transformation. Drawing on Dynamic Capability Theory and New Public Management (NPM), this framework addresses a gap in the literature, which has largely discussed digital transformation, procurement governance, and organizational performance separately without demonstrating the synergistic relationships between them. This framework positions digital procurement transformation as a key driver for increased transparency, accountability, process efficiency, and information integration within public organizations. Through these mechanisms, organizations are expected to improve the quality of decision-making, the effectiveness of resource use, and overall procurement performance. Expected outcomes include increased procurement efficiency, the quality of public services, value for money, and increased public trust in government resource management. This framework provides conceptualization and practical insights for procurement managers and policymakers, and serves as a foundation for future empirical research.

Analysis Of The Financial Performance Of The Regional Government Based On The Independence Ratio, Effectiveness Ratio, And Efficiency Ratio In The City Of Surabaya

Jessica Dwi Yolanda Pandiangan — 2026-07-05

This research aims to conduct an in-depth evaluation of the financial performance of the Surabaya City Government during the 2022–2024 fiscal period. Using a quantitative descriptive approach, the analysis is focused on secondary data sourced from the Budget Realization Report (LRA) and official regional financial statements. Fiscal performance measurement is mapped through five strategic indicators: effectiveness ratio, efficiency ratio, fiscal independence ratio, spending activity, and revenue and expenditure growth trends. In general, the financial governance of the Surabaya City Government is in the category of healthy and independent. Nevertheless, fluctuations in financial growth and the high dominance of operational spending are critical notes that require attention.

Analysis of The Implementation of the Village Financial System (Siskeudes) in Improving the Accountability of Village Financial Management

Juli Elyandi — 2026-07-05

Transparent and accountable village financial management is an important factor in realizing good village governance. Along with the increasing allocation of village funds from the central government, a system is needed that can support village financial management effectively and in accordance with applicable regulations. The Village Financial System ( Siskeudes ) is an application developed by the Financial and Development Supervisory Agency (BPKP) in collaboration with the Ministry of Home Affairs to assist village governments in the planning, budgeting, implementation, administration , reporting, and accountability of village finances. This study aims to analyze the implementation of the Village Financial System ( Siskeudes ) in improving the accountability of village financial management. The research method used is a literature study by reviewing various scientific journals, books, and laws and regulations relevant to village financial management. The results show that the implementation of Siskeudes can improve the quality of village financial management through more systematic transaction recording, faster and more accurate preparation of financial reports, and increased transparency in the use of village funds. In addition, Siskeudes also supports the monitoring and evaluation process by local governments and the community. However, the implementation of Siskeudes still faces several obstacles, such as limited human resource competency, a lack of technical training for village officials, and limited information technology infrastructure in some areas. Therefore, capacity building of village officials and adequate technological support are needed to ensure optimal and sustainable implementation of Siskeudes.

Local Government Governance In Indonesia

Mestika Munte — 2026-07-05

This study aims to study how the implementation of public governance impacts the financial performance of local governments in Indonesia. Local government transparency, local government accountability, legal culture, and community participation are some ways to measure the effectiveness of national government. As an example, Transparent International Indonesia conducted a survey in 2010 of 50 local governments. The results of multiple regression analysis showed that legal culture, as indicated by the corruption perception index, and public participation, as indicated by the number of election voters, greatly helped the financial performance of local governments in Indonesia. The results show that public confidence in paying taxes that increase real income increases as a result of law enforcement and fair elections.

Reconceptualizing Government Procurement Accountability: A Conceptual Framework of Transparency, Answerability, Oversight, and Enforceability

Antonius Piaman Telaumbanua — 2026-07-05

Government procurement is a strategic function of public administration because it determines how public resources are transformed into goods, services, infrastructure, and public value. However, procurement remains vulnerable to accountability problems, including information asymmetry, conflicts of interest, weak oversight, procedural manipulation, and corruption risks. This conceptual paper aims to develop an integrated framework of government procurement accountability by synthesizing Public Accountability Theory, Agency Theory, Institutional Theory, and Good Procurement Governance. The study argues that procurement accountability should not be understood merely as administrative reporting or information disclosure, but as a multidimensional governance mechanism consisting of transparency, answerability, oversight, and enforceability. Through a conceptual literature review, this article identifies that previous studies have discussed e-procurement, transparency, corruption risk, and procurement integrity separately, but have not sufficiently integrated these dimensions into a single accountability framework. The proposed model explains that transparency provides the informational basis for accountability, answerability requires procurement actors to justify decisions, oversight enables institutional evaluation, and enforceability ensures credible consequences for misconduct. These mechanisms collectively shape government procurement accountability and contribute to good procurement governance. This study contributes to public sector governance literature by reconceptualizing procurement accountability as an integrated, relational, and enforceable system that can guide future empirical research and practical reform in public procurement governance.

Government Expenditure Budget Efficiency Through the Implementation of the E-Procurement System at the Medan City LPSE

Najwa Rahmadini — 2026-07-05

This study evaluates government expenditure efficiency through the Electronic Procurement System (SPSE) at LPSE Medan City. Using a quantitative descriptive method, it analyzes 639 tender packages from Fiscal Year (FY) 2024 and 286 packages from ongoing FY 2025 (as of June). Budget efficiency is measured by calculating the variance between the Total Owner’s Estimate (HPS) and the final Contract Value. The empirical results show significant regional budget savings, achieving an efficiency rate of 9.23% (Rp 79.49 billion) in FY 2024 and 8.51% (Rp 37.63 billion) in FY 2025. While the platform has successfully enhanced transparency and vendor competition, achieving 100% timely budget realization is still hindered by technical and managerial bottlenecks, such as delayed tender submissions by regional agencies, retendering risks, and server slowdowns during peak seasons. This study offers practical insights for improving future cost-effective regional budgetary plans.

The Application of Forensic Accounting in Government Procurement of Goods and Services

Hileria Ariella Br Pakpahan — 2026-07-05

Government procurement of goods and services is one of the sectors most vulnerable to fraud, corruption, collusion, and abuse of authority. These irregularities can result in significant financial losses to the state and reduce public trust in government institutions. Therefore, the application of forensic accounting has become increasingly important as an effective tool for detecting, investigating, and preventing fraud in government procurement activities. This study aims to examine the role and application of forensic accounting in government procurement processes and its contribution to enhancing transparency, accountability, and good governance. The research employs a qualitative descriptive approach through a review of relevant literature, regulations, and previous studies related to forensic accounting and public procurement. The findings indicate that forensic accounting techniques, such as fraud investigation, financial data analysis, and evidence examination, play a crucial role in identifying procurement irregularities and supporting law enforcement efforts. Furthermore, the integration of forensic accounting practices into government procurement systems can strengthen internal controls and reduce opportunities for fraudulent activities. It is concluded that forensic accounting serves as an essential mechanism in safeguarding public resources and promoting integrity in government procurement of goods and services.

Analysis Of The Procurement Of Goods And Services In The City Of Medan Using The Value For Money Approach In 2024

Muhammad Arsyad Hawari Muchsin — 2026-07-05

This study aims to analyze public procurement practices in the Medan City Government using the Value for Money (VfM) approach. Value for Money is a concept widely applied in the public sector to ensure that public resources are utilized economically, efficiently, and effectively. This study employs a qualitative approach through a literature review of academic journals, books, government regulations, and publications related to public procurement and public sector performance measurement. The findings indicate that the implementation of Value for Money in public procurement can improve budget efficiency, enhance service quality, strengthen accountability, and optimize public resource utilization. The study also highlights the importance of balancing cost, quality, and outcomes in procurement activities. Therefore, the Value for Money approach can serve as a strategic instrument for evaluating procurement performance and supporting good governance within the Medan City Government.

Procurement Ethics And Performance Accountability Report Quality: An Analysis Of LKjIP Kecamatan Medan Johor 2025

Petrus Anandra Hutahean — 2026-07-05

This study examines the relationship between procurement ethics and the quality of the Government Institution Performance Accountability Report (LKjIP) at Kecamatan Medan Johor for Fiscal Year 2025. Employing a qualitative descriptive approach through document analysis of LKjIP data, procurement documents, and secondary sources from e-procurement systems, the study evaluates five dimensions of procurement ethics: transparency, efficiency, integrity, healthy competition, and accountability. The findings demonstrate that consistent implementation of e-procurement, with an average budget efficiency rate of 13.2%, alongside zero deviation findings in procurement audits, has positively contributed to a high average performance achievement of 100.39%. The Community Satisfaction Index (IKM/CSI) reached 87.80, surpassing the target of 83.30 by 105.14%, and the SAKIP score improved to 67.50 (Good category). These results indicate that procurement ethics function as a structural pillar underpinning the substantive quality of LKjIP.

Analysis of Management Efficiency and Effectiveness Regional Finance to the Medan City Government

Esra Novita Sinabutar — 2026-07-05

This study aims to measure, analyze, and evaluate the level of efficiency and effectiveness of regional financial management in the Medan City Government. The approach adopted in this study is descriptive quantitative using the Regional Original Revenue (PAD) Effectiveness Ratio (Ratio) and Regional Financial Efficiency Ratio (REKD) instruments calculated based on the official Budget Realization Report (LRA) of the Medan City Government for the 2021 to 2025 fiscal year. The results of empirical secondary data analysis indicate that the average performance of Medan City's PAD effectiveness ratio falls into the Very Effective category (achieving an average of above 100%). The success in achieving this target is driven by the acceleration of the local tax system digitalization program, the non-cash payment ecosystem, and the expansion of the new tax object base. On the other hand, Medan City's aggregate regional financial efficiency ratio falls into the Less Efficient category with an average figure above 90%. This figure reflects the large allocation of the operating budget—particularly for personnel expenses and routine bureaucratic operations—which dominates the expenditure realization posture when compared to total regional revenue absorption. This study provides strategic policy implications in the form of the need for restructuring and reform of regional expenditure allocations, periodic efficiency audits, and expansion of Capital Expenditures that are more oriented towards long-term economic productivity to support fiscal sustainability in medan city.