Factors Affecting the Financial Accountability of Village Funds: Evidence From Banten & West Java (Indonesia)

This study aimed to analyse the effect of organizational commitment, the competence of village government, internal control system implementation, and the application of good governance principles on the financial responsibility of village funds. This research was conducted by surveying villages that received village funds in Banten and West Java with a sample of 95 villages calculated using the Slovin formula. The purposive sample approach was used with the village criteria in each district that received funding from the central government > RP 900 million, and had an original village income >RP 50 million. Data were gathered through surveys administered directly to village government employees. Data analysis was conducted using structural equation modelling (SEM) with the SmartPLS tool. According to the research results, organizational dedication and the application of effective governance favourably and considerably affect the financial responsibility of village finances. These findings emphasise the need to improve internal commitment and implement good governance principles to raise responsibility and openness in the management of village funds. Conversely, there was no meaningful relationship between financial accountability and the competency of internal control systems or village leaders. Particularly in assuring open and targeted administration of public funds for village development, the findings of this study might work as a reference for village governments, supervising institutions, and lawmakers in devising strategies to strengthen capacity and improve governance policies. From the results of this study, the village government should strengthen organizational commitment and enhance the application of good governance principles.