Professional Documents
Culture Documents
1. Introduction .......................................................................................................... 1
2. ResearchQuestions ............................................................................................... 2
3. Research Objetives................................................................................................ 2
4. Research Benefits.................................................................................................. 2
5. Literature Review
6. Theoritical Framework
Expenditures......................................................................................................... 6
7. Research Hypothesis
Capital Expenditures............................................................................................ 7
8.1Research Object.............................................................................................. 9
9. References...............................................................................................................10
1
1. Introduction
Based on Law Number 32 of 2004, one source of regional income comes from
local taxes, the results of regional retribution, the results of wealth management. The
increase in income of a region is expected to increase investment in regional
government capital expenditures so that the quality of public services is getting better,
but what happens is that the increase in regional original income is not followed by a
significant increase in capital expenditure. Many of the regional revenues are sucked
up to finance other expenditures, such as personnel expenditure, because too much
personnel expenditure is assessed in the Regional Budget this results in reduced
allocation for capital expenditure, which is seen as having a more significant
influence on meeting public services to the public (Director General of Fiscal Balance
2012).
routine expenditure which was relatively ineffective, Therefore the local government
should change its shopping composition.
2. Research Questions
2. Does the local revenue affect the allocation of the budget capital expenditure?
3. Does the general allocation fund affect the budget allocation capital
expenditure?
3. Research Objectives
3. To prove the Effect of the General Allocation Fund towards the allocation of
Capital Expenditures.
4. Research Benefits
with funding sources and wealth in its area. The government minimizes funds so as
not to depend on the central government.
3. For next researchers, to provide information and references about the concept of
how the effect of Economic Growth, DAU and PAD on the Allocation of Capital
Expenditures.
5.Literature Review
Increasing the number of residents by also will increase the need for food,
clothing, housing, education and health services. Existing infrastructure and
infrastructure in the area will have an impact on regional economic growth. If the
facilities and infrastructure are adequate, the community can carry out their daily
activities safely and comfortably, which will affect their increasing level of
productivity. Thus, it will attract investors to open businesses in the area.
1) Employee Expenditures
4) Subsidized Shopping
1) Land Expenditures
3. Unexpected Expenditures
accounting, including the expenditure for maintenance costs that are of a nature
maintain or increase the useful life, increase the capacity and quality of assets.
Regional revenue sources (Law Number 33 of 2004) that can used as a source of
regional expenditure derived from Revenue Regional and Financing. Regional
Revenues sourced from:
2. Balancing Funds, namely: Profit Sharing Funds, General Allocation Funds, and
Special Allocation Funds.
3. Other legitimate income, namely: Proceeds from the sale of regional assets that
are not separated, Current Services, Interest income, Benefits of the difference
between the rupiah exchange rate against foreign currencies, and commissions.
6 . Theoretical Framework
The government is responsible for providing the best service to the community
through a capital expenditure budget consisting of operating expenses, capital
expenditure, and other unexpected expenditures. Operational expenditure consists of
personnel expenditure, goods expenditure, interest expenditure, subsidies, grants,
social assistance, financial assistance. While Capital Expenditures consist of land
expenditure, equipment and machinery, buildings and buildings, irrigation roads, and
other fixed assets expenditure. Good economic growth must be supported by adequate
infrastructure or facilities to facilitate the economic activities of the community.
While the facilities and infrastructure are obtained from the allocation of the capital
expenditure budget that has been budgeted annually in the APBD. Thus, there is an
influence between economic growth and allocation of capital expenditure. Usually if
the economic growth of a region is good, then the local government will continue to
increase the allocation of capital expenditure from year to year to complement and
improve facilities and infrastructure, but adjusted to the conditions and situations
during the fiscal year.
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Regional Original Income (PAD) is a source of funding for the budget capital
expenditure. PAD is obtained from direct contributions from the community, such as
taxes, levies, etc. So the government should be able to manage community
contributions properly. because the community has given part of the money to the
local government. The form of public services provided by the government to the
community by providing adequate facilities and infrastructure in the area. The
procurement of infrastructure or facilities is financed from the capital expenditure
budget allocation in the APBD each year. Thus, there is an influence between
Regional Original Income (PAD) and allocation of capital expenditure. But not all
regions with high income are followed by good economic growth.
General Allocation Funda (DAU) comes from the transfer of APBN by the
central government to local governments. DAU is one of the financing sources for
capital expenditure to procure facilities and infrastructure in order to provide good
public services from the regional government to the community. Similar to PAD, the
difference lies in the source of funds.
towards the dependent variable which is about the influence of economic growth,
regional income and general allocation funds for the capital expenditure budget
is as follows:
PICTURE 1.1
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7. Research Hypothesis
Research carried out by Abdullah and Halim (2003) which states that Regional
Original Revenue has a significant effect on regional expenditure. So that the higher
the amount of Local Revenue, the higher the level of expenditure in the region. In the
study using realization data and for the capital expenditure budget variable for the
following year using the fiscal year. In some previous studies the results of PAD have
always been significantly positive towards capital expenditure. Then the hypothesis
can be stated as follows:
H2: Regional Original Income has a positive effect on the allocation of Capital
Expenditures.
General allocation funds (DAU) are funds originating from the APBN which are
allocated with the aim of equitable distribution of financial capacity between regions
to finance their expenditure needs. Several previous studies conducted by several
researchers also showed that the DAU yields a significant positive effect on capital
expenditure. In the study using realization data and for the capital expenditure budget
variable for the following year using the fiscal year. Then the hypothesis can be stated
as follows:
10
H3: General Allocation Funds have a positive effect on the allocation of Capital
Expenditures.
8. Research method
The object of this research is Economic Growth, Regional Original Income and
General Allocation Fund (DAU) as independent variables and Capital Expenditures as
the dependent variable. the subjects in this study were Regency / City Regional
Governments in West Sumatra
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The research method used is a qualitative method with analysis method which is a
method that focuses on understanding social phenomena from a participant's
perspective descriptively. A research method that seeks to collect, present, and
analyze data so that it can provide a clear picture of the object under study.
9References
12
Dini Arwati & Novita Hadiati, 2013. Effects of Economic Growth, Regional Original
Revenue and General Allocation Funds on Allocation of Capital Expenditures to
District / City Governments in West Java Province. National Accounting
Symposium, November, Semarang.
Nugroho Suratno Putro, 2009, Effect of economic growth, local revenue and general
allocation funds on the allocation of capital expenditure budget (Case study in
districts / cities in Central Java Province), Undergraduate Thesis of the Faculty
of Economics, Diponegoro University.
Halim, Abdul. 2001. Analisis Varian Atas Anggaran Pendapatan Asli Daerah pada
Anggaran Pendapatan dan Belanja Daerah Kabupaten/Kota diIndonesia.
Salemba Empat: Jakarta