Quality of Public Services in Local Governments in Indonesia : A Study of Capital Expenditures and Government Internal Control Systems

Abstract

Regional autonomy is a policy the central government gives to local governments to regulate their regions. One of these authority policies is public service. Public services are a series of activities in the form of services following the law's mandate in the form of goods and services to fulfill general needs for the welfare of society. Public services for the community come from the realization of local government budgets with an internal control mechanism to regulate the fulfillment of public services. Increased budget realization can support regional infrastructure to provide better public services. Capital expenditure is not a service; if it is used as a service, it is necessary to have a supervisory mechanism such as an internal supervisor of the local government to support the fulfillment of better public services and improve the welfare of the community. The increase in capital expenditure, where the output is assets, is the most tangible thing that is felt by the community; it is necessary to have internal control within the local government, namely the maturity of the SPIP to run effectively and efficiently. This study examines the effect of capital expenditure and SPIP maturity on public services. The sample and population used in this study were 514 local governments with up to 1887 all local governments in Indonesia during 2016 – 2019. The results of this study are that capital expenditure variables have a positive effect on public services, and SPIP maturity has a positive effect on public services.