Articles

Analysis of the Effectiveness of Internal Control as Fraud Prevention in the Kupang City Government

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This study aims to evaluate the effectiveness of the implementation of the Internal Control System (ICS) in financial management and Government Regulation (PP) No. 06 of 2008 as a fraud prevention measure. This study employs a qualitative descriptive approach. Primary data were gathered through questionnaire about internal control system, completed by relevant officials, which where supplemented by additional insights obtained from interviews.

Meanwhile, secondary data were sourced from the Summary of Audit Results (IHPD) for the East Nusa Tenggara Province. Given the paucity of research on internal control-based auditing in the government sector and the rising instances of corruption in public financial accountability and operations, it is critical to delve deeper into this issue to investigate the effectiveness of internal controls in preventing fraud within the government. This study identifies the causes of compliance findings in the Financial Statements of the Regional Government of Kupang City for the 2023 Fiscal Year, analyzed them in relation to the effectiveness of the Internal Control System (ICS). The findings reveal that ineffective implementation of internal control is a significant factor contributing to compliance violations of regulations, which result in state or regional losses that require recovery.

Analysis of the Effectiveness of Internal Control Systems on Regional Financial Management in the North Maluku Provincial Government

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This study examines the performance of the Internal Control System (ICS) in the management of regional finance in the North Maluku Provincial Government. The research employed a descriptive qualitative methodology, utilizing primary data gathered through direct observation and interviews, alongside secondary data acquired from the BPK Audit Report (LHP). This study determined that the implementation of ICS has not been fully effective, based on the analysis of the five components of ICS as per Government Regulation (PP) No. 60/2008, aligned with the COSO framework. Notwithstanding attempts to enhance the control environment, the disparity between employees’ credentials and their responsibilities, along with deficiencies in risk assessment and control activities, suggests the presence of issues. Critical findings indicated that the assets were inaccurately documented, and the potential for unregulated budget management persisted. Furthermore, there was little communication among authorities within the responsibility transfer system. This study found that inadequate ICS can elevate the probability of misstatements in financial reports and obstruct local government initiatives aimed at attaining transparency and accountability in fund administration. This research aims to assist stakeholders in enhancing the future implementation of ICS.