THE IMPACT OF PERFORMANCE MANAGEMENT IMPLEMENTATION ON EFFECTIVENESS AND EFFICIENCY of GOVERNMENT BUDGET USE: INDONESIAN CASE

摘要

The inability to optimize budget use of finance development is the most crucial problem in Indonesia. In 2015, the potential budget dissipation by the government estimated about 30% of National/Local Budget or 392,8 Trillion Rupiah which Local Government becomes the most. The absence of Value for Money paradigm and performance management quality is the most problematic factors. National Government efforts to overcome these problems are to encourage SAKIP implementation. About 20 Local Governments have intensively implemented SAKIP and stated that it can be affected 41,1 Trilion Rupiah budget dissipation potential. Those who have been reporting are Yogyakarta, East Java, Banyuwangi, and Banggai. This study talked about how SAKIP implementation can affect Local Government budget efficiency and effectiveness in budget utilization. This study using performance management and performance-based budgeting theory with qualitative approach. The results study represents that SAKIP affects the efficiency and effectiveness of budget utilization by ascertain to (1) determine results-oriented performance measure; (2) cascade and align performance measures to lower level; (3). choose activities that have directly impact on performance measures achievement; and (4) make an explicit and efficient working procedures.