Utilization of Information Technology to Increase Human Resources Capacity and Internal Control Systems on Local Government Financial Reporting Information

Abstract

There are increasing demands from the public related to the accountability and transparency in public sector administration. The governments usually respond by providing financial information to the public. In order to fulfill public rights to the information, government is also establishing the efficient way to achieve transparency by utilizing information technology (IT) in both financial management and public administration. This study aims to analyze the effect of human resource capacity and government internal control systems on the value of local government financial reporting information using information technology as a moderating variable. The population in this study is the financial manager in 41 government units in Palu City, Indonesia. The sampling technique uses purposive sampling with analysis tools processing data using WarpPLS. The results showed that human resource capacity had a positive and significant effect on the value of local government financial reporting information. The results also revealed that government's internal control system had a positive and significant effect on the value of local government financial reporting information. In terms of moderating effects, the results found that the use of information technology moderates the relationship between human resource capacity and the value of local government financial reporting information and the relationship of the government's internal control system to the value of local government financial reporting information.