Determinants of Transparency in Financial Management on Local Government Websites: Evidence from Indonesia

This study aimed to examine the determinants of transparency in financial management on local government websites in Indonesia. The level of transparency was measured at each stage of local government finance: planning, implementation, and reporting and accountability, using internal, local government characteristics, and external, community conditions, factors of influence. The internal factor was represented by local government size, expenditure, and dependence, while community welfare was adopted for the external factor. The study was designed as quantitative research based on a multiple linear regression model. The study sample of 424 observations was selected from the district/city governments in Java that met the criteria of having an official and accessible website, as well as completes financial data from 2013 to 2016. The results suggested that the average level of transparency in financial management on these local government websites over the four-year period was 24.76%. In addition, both the size and expenditure of the selected local governments were positively associated with their transparency levels, while no association was shown with the levels of both dependence and community welfare. The conclusions drawn offer suggestions on how central government can encourage regional financial transparency in their policies and for local governments in increasing their commitment to implementing transparency.