The significance of the internal control system implementation on village government performance

• Mulyani, S. Universitas Padjadjaran, Information Systems and Good Governance for Sharia and Public Sector, Indonesia
• Munir, D.A. Accounting in Universitas Padjadjaran, Regent of Sumedang City, Indonesia.
• Akbar, B. Institute of Public Administration (IPDN), Indonesia
• Yoseph, M. Universitas Padjadjaran, Bureau of Planning and Overseas Cooperation, Indonesia.
• Sudrajat . Universitas Lampung, Team BLU of Universitas Lampung, Indonesia.

Palabras clave: Internal control system, Fraud, Performance

Resumen

This study aims to examine the effectiveness of an internal control system on village governance performance based on frauds found in village fund management. Primary data were collected by surveying 270 village governments. The data analysis was performed using the Structural Equation Model (SEM). The results found that when the internal control system was weakly implemented, the fraud in village fund management would increase, which led to the declined performance of the village government. In conclusion, effective internal control can reduce fraud levels in village funds. Besides, such control will bring a positive impact on improving the village government’s performance