Abstract:

This study aims to investigate the discretionary spending proportion, disclosures, and audit findings around the election. Researches focus on discretionary spending disclosure quality in local government financial reports is limited. In addition, previous research focused more on the period ahead of the election. A total sample of 155 Local Governments during 2013-2016 was selected in this study. With the Wilcoxon Signed Ranks Test, the results showed that total discretionary spending proportion is higher both in ahead of the election and a year after the election period compared to the before the election period. Using content analysis, this study finds that discretionary spending disclosures quality still quite low (around 50%). In addition, this study also finds that the most frequent audit findings by the Indonesian Audit Board related to discretionary spending are that the recipients do not submit or late to submit the accountability report. This problem may cause the effectiveness of such funds cannot be assessed and poses a risk of fictitious disbursement. Therefore, the results of this study are expected to provide input to regulators to develop more comprehensive regulation to limit the opportunistic behavior of Local Government Heads, especially regulation on accountability reporting.