Study Calls for Public Accounting Shift from Budget Efficiency to Public Value in Indonesia
MEDAN, Indonesia — Indonesia's public sector accounting system needs to move beyond measuring budget efficiency and administrative compliance toward creating measurable public value, according to a 2026 study by Monica Aprilia, Shella Yulia Riska, Nur Lanna Siregar, and Galih Supraja of the Accounting Study Program, Universitas Pembangunan Panca Budi (UNPAB), Medan. Published in the International Journal of Contemporary Sciences (IJCS), the study argues that the long-dominant New Public Management (NPM) model has reached its practical limits and should gradually be replaced by the New Public Governance (NPG) approach, which emphasizes collaboration, accountability, and public value creation.
The findings arrive at a time when governments worldwide face increasing pressure to deliver better public services while maintaining transparency and accountability. In Indonesia, reforms over the past two decades have largely focused on improving financial efficiency, performance-based budgeting, and compliance with regulations. Although these reforms have strengthened administrative procedures, many public organizations continue to struggle with low budget absorption, limited innovation, weak transparency, and recurring governance challenges.
According to the researchers, these persistent issues suggest that financial reporting alone is no longer sufficient to improve public sector performance. Instead, accounting systems should become strategic tools that help governments build partnerships, strengthen public trust, and generate broader social value.
The study explains that the New Public Management (NPM) paradigm has traditionally viewed accounting as a mechanism for cost control, efficiency, and formal performance measurement. In contrast, the New Public Governance (NPG) framework expands the role of accounting by emphasizing collaboration among governments, communities, businesses, and other stakeholders. Under this approach, accounting information becomes a means of supporting relational accountability and measuring the value created for society rather than simply tracking expenditures.
To examine this transition, the research team conducted a Systematic Literature Review (SLR). They analyzed 10 peer-reviewed journal articles published between 2019 and 2025, covering a wide range of Indonesian public institutions, including village governments, regional government agencies, ministries, and Regional Public Service Agencies (BLUDs). The researchers synthesized evidence using qualitative content analysis supported by an artificial intelligence-based literature mapping tool to identify recurring patterns, institutional barriers, and opportunities for reform.
The review found strong evidence that Indonesia's public management accounting system requires substantial transformation. Across the selected studies, the researchers identified several recurring issues affecting government financial management and organizational performance.
Key Findings
- 100% of the reviewed studies emphasized the need for stronger collaboration and public value creation.
- 90% identified fraud risks and weaknesses in performance accountability.
- 80% reported that performance measurement remains overly rigid and focused primarily on administrative outputs.
- 70% highlighted limitations in information systems and technical infrastructure.
- 60% pointed to insufficient human resource competencies and training as barriers to successful accounting reform.
The authors conclude that these findings demonstrate a high level of urgency for shifting away from a purely efficiency-driven management model. While traditional performance-based budgeting has improved compliance with financial regulations, it has not consistently improved service quality or encouraged innovation within government institutions.
The study further notes that many public organizations continue to use accounting primarily to satisfy regulatory requirements rather than to support strategic decision-making. As a result, accounting information often serves as documentation for compliance instead of becoming a practical resource for improving governance and delivering better public services.
According to Monica Aprilia and colleagues from Universitas Pembangunan Panca Budi, the future of public sector accounting lies in embracing the New Public Governance paradigm. Under this model, government performance should be evaluated not only by financial efficiency but also by the extent to which public programs generate social benefits, strengthen collaboration among institutions, and improve citizens' well-being. Their analysis indicates that management accounting should evolve from a cost-control instrument into a facilitator of multi-stakeholder cooperation and public value creation.
The implications of the study extend beyond accounting practice. For policymakers, the findings suggest that performance evaluation systems should incorporate indicators such as public satisfaction, collaborative governance, transparency, and long-term social outcomes rather than relying solely on budget absorption or financial efficiency. Government agencies are also encouraged to strengthen employee competencies, improve organizational communication, promote transparency, and develop integrated digital information systems that support cross-sector collaboration.
The researchers also believe the study offers valuable guidance for universities and accounting educators. Future public sector accounting education may benefit from placing greater emphasis on governance, stakeholder collaboration, public value measurement, and strategic decision-making alongside traditional financial reporting. They further recommend empirical research to validate the proposed conceptual framework across different government institutions and policy sectors in Indonesia.
Overall, the study presents a clear message: the future of Indonesia's public management accounting system depends not only on spending public money efficiently but also on ensuring that government policies and financial decisions create tangible value for citizens. As governments face increasingly complex social and economic challenges, accounting systems that support collaboration, transparency, and public value may become essential components of modern public governance.
Author Profiles
- Monica Aprilia is a researcher in the Accounting Study Program at Universitas Pembangunan Panca Budi (UNPAB), Medan, specializing in public sector accounting.
- Shella Yulia Riska is an academic from the Accounting Study Program at Universitas Pembangunan Panca Budi, with research interests in public management accounting and government financial governance.
- Nur Lanna Siregar is a researcher at Universitas Pembangunan Panca Budi, focusing on public sector accounting and financial governance.
- Galih Supraja is a lecturer in the Accounting Study Program at Universitas Pembangunan Panca Budi (UNPAB), Medan, and the corresponding author of the study. His academic expertise includes public sector accounting, management accounting, and public governance.
Source
- Aprilia, M., Riska, S. Y., Siregar, N. L., & Supraja, G. (2026).
- Public Management Accounting Paradigm Shift from New Public Management Efficiency Towards Public Value Creation in New Public Governance Through a Literature Review.
- International Journal of Contemporary Sciences (IJCS),
- Vol. 4, No. 6, 2026, pp. 1653–1664.
- DOI: https://doi.org/10.55927/b31wxj65.
- URL Jurnal: https://journalijcs.my.id/index.php/ijcs
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