Village fund management and reporting systems: are they accountable?

Abstract

Purpose This study aims to address fundamental questions surrounding accountability within village fund management (VFM) and reporting systems in Indonesia by comparing the number of anomalous data entries with the actual village funds using the VFM data for all Indonesian villages during the period 2018–2020. Design/methodology/approach The research presents a pioneering methodology for assessing village fund accountability by analyzing data from all Indonesian villages and using investigative journalism and qualitative analysis. It integrates data from various sources, including government regulations, previous investigations, literature, interviews, etc. Findings This research highlights global challenges in development and governance, revealing common issues such as poor management of village funds and the need for strengthened institutional protection enforcement. Referring to the institutional theory, the authors demonstrate how institutional structures influence community behaviors, emphasizing the importance of regulatory frameworks to prevent misuse of public resources and maintain transparency and accountability across various socio-economic and political contexts. Practical implications This study emphasizes the necessity for more transparent and accountable fund management practices and calls for broader consideration of implications beyond government impact. Social implications This research provides insights for international stakeholders to strengthen their public financial systems, through rigorous monitoring and comprehensive reporting systems. Originality/value This study provides the most comprehensive sample comprising all villages in Indonesia that receive village funds and measures the use of village funds based on all village-level disbursements, representing unprecedented research using this form of data.