Regional Financial Paradox: High Effectiveness Yet Low Fiscal Independence in Paser

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FORMOSA NEWS

Nur Asni, Rifdan, Andi Cudai Nur, and Andi Kasmawati from Makassar State University revealed a paradox in the financial governance of Paser Regency during the 2021–2025 period. This study is crucial for evaluating whether the successful achievement of regional revenue targets truly reflects fiscal independence and optimal public expenditure efficiency.

Regional autonomy requires local governments to manage financial resources independently and responsibly. However, high revenue realization often masks fundamental weaknesses in internal fiscal capacity and suboptimal public expenditure efficiency.

This study employed a descriptive quantitative approach by analyzing the Paser Regency Budget Realization Reports (LRA) for 2021–2025 audited by the Audit Board of the Republic of Indonesia (BPK-RI), involving 35 civil servants at the Regional Financial and Asset Management Agency (BKAD). Financial performance was measured using revenue effectiveness ratios, fiscal decentralization degrees, financial independence ratios, expenditure efficiency ratios, and budget absorption rates.

Key findings of this study indicate several important facts:

• The revenue effectiveness ratio averaged 105.14%, falling into the highly effective category in meeting targets.
• The fiscal decentralization degree averaged only 8.77% (very low category) due to the small contribution of Locally Generated Revenue (PAD) to total revenue.
• The financial independence ratio averaged 9.67%, indicating that the region still heavily relies on transfer funds from the central government.
• The expenditure efficiency ratio averaged 102.07% (inefficient category), indicating that revenue growth was not accompanied by expenditure controls aligned with the region's actual capacity.

The implications of this study demand local governments and BKAD to shift their financial management orientation from mere administrative compliance to performance-based management. Researchers from Makassar State University emphasized the need to strengthen independent fiscal capacity, control expenditures based on revenue capacity, and improve planning and budget evaluation quality to ensure public resources are utilized efficiently.

Author Profiles

• Nur Asni, S.Sos., M.Si., Prof. Dr. H. Rifdan, M.Si., Dr. Hj. Andi Cudai Nur, M.Si., and Dr. Andi Kasmawati, M.Si. are academics and researchers from the Department of Public Administration, Faculty of Social Sciences and Law, Makassar State University, with primary expertise in public administration, fiscal policy, and regional financial governance.

Research Source

• Article Title: Effectiveness and Efficiency of Regional Financial Governance at the Regional Financial and Asset Management Agency of Paser Regency, Indonesia, 2021-2025
• Journal Name: Contemporary Journal of Applied Sciences (CJAS), Vol. 4, No. 8 August 2026
• DOI: https://doi.org/10.55927/cjas.v4i8.223