Financial Performance Based on the Local Government Budget (Case Study: East and Central Java Provincial Governments)

Financial performance is a description of the economic results that regional governments are able to achieve at a certain time through regional government economic activities. Local Own-source Revenue (PAD) is one of the financial sources owned by the district. Income comes from various components such as district taxes, district levies, Government Owned Business Entities profits and other income. East Java's PAD in 2022 increase drastically and is in the top five provinces with the highest revenues. This research aims to compare the financial performance of Local Government Budget (APBD) in East Java and Central Java Provincial Governments. This research method is quantitative descriptive using the calculation of five ratios: Independence Ratio, Fiscal Decentralization Ratio, Effectiveness Ratio, Efficiency Ratio and Expenditure Ratio. The data used in this research is secondary data from the East Java and Central Java Province APBD financial reports for the 2018-2022 budget year. The results of this research are based on the Financial Capability Index (FCI) data analysis technique, shows that Central Java region is more capable of financing its regional activities. It shows that Central Java’ FCI is classified as high and East Java is classified as medium performance.