iii
Table of Contents
Descriptions Page
Table of Contents i
Welcome Speeches 1
Participant List 7
Abstract 16
Full Paper 1. Business Practices Amongst SMEs: The Case of Fashion Creative Industry
Popy Rufaidah and Sutisna 53
2. The Effects Of Socio-Economic Factors On Housing Price In Indonesia
Fery Agustianto and Muhammad Andriyadi 67
3. Analysis Of Value-Added Intellectual Capital Influence On Corporate Financial Performance: Study Of Public-Listing Companies On The
Indonesia Stock Exchange Dahlia Mulyasanti
79
4. Potential Determination Of The Property Tax Through Analysis Assessment Of The Agricultural Land In The District Of Blora
Mokhamad Surianto 96
5. The Analysis Of Asset Management To The Quality Of Financial Statements Of The Government A Case Study Of Tual, Maluku
Taufik Irawan and Temmy Pratama 119
6. The Influence Of Intangible Asset In The Form Of Intellectual Capital To The Value Of Company
Affandi Subekti and Harry Anugerah Pradana 133
7. The Challenges Of Municipal Asset Management In Developing Country: A Case Study Of Bandung
Marga Gumelar and Nur Alam 151
8. The Influence Of Asset Management To Local Revenue Optimization: Case Study In Bekasi City Government
Muhammad Irvan Widya 165
9. The Implementation Of Bandung And Surabaya E-Government And Their Key Success Factors
Hanif Rahmatullah and Silvia Herera 177
10. Mobile-VCT As A Social Marketing Engine To Reduce High-Risk Sexual Behavior The Project For HIVAIDS Prevention For Sex Workers In
Cilegon City – Indonesia Verza Mulya Sugema and Sarimin
190
11. The Use Of Information In Commitment Module Of The State Treasury And Budget System Span-Sistem Perbendaharaan Dan Anggaran
Negara To Optimize The Absorption Of The State Budget APBN Jarir Al Amjad and Utomo Wicaksono
203
12. Managing Knowledge Assets For Organizational Performance 222
iv
Improvement A Case Study At Finance And Development Supervisory Agency Representative Of West Java
Dwita Ayu Rahmadanti and Diyan Rasyieqa Khaeruddin
13. The Effect Of Monitoring And Evaluation On The Effectiveness Of Local Asset Management Empirical Study In The Government Of Malang, East
Java, Indonesia Ahmad Faozan Suryanto and Rendra Kurnia Wardana
233
14. The Evaluation Of Green Economy Principles In Government Assets Management Case Study At Central Bureau Of Statistic Central
Kalimantan Province Rephy Ekawatie and Norhina Kurniawaty
255
15. Implementation Of Risk Based Asset Management To Increase Performance of Local Water Company PDAM In Aceh
Monita Mardika Fajar 274
16. The Impact Of Intellectual Capital To Bumd’s Performance A Study On Local Water Company PDAM In Indonesia
Khulifa Ahdizia 287
17. Board Characteristics, CEO Succession, And Intellectual Capital Performance: Managing A Competitive Advantage
Afifa Zuhria 300
18. Understanding The Problems Of Policy Implementation Concerning Retribution On The Use Of Regional Assets: A Case Study In The District
Government Of Central Maluku Sut Mutiah and Dina Anggraeni
Past Events Photos in 2015: The International Joint Seminar – Takushoku University MM FEB Unpad, 9 January 2015
331
Itinerary 334
Session Chairs of the International Joint Seminar 335
Acknowledgement 336
1
Welcome Speech
2
Welcome Speech
Prof. Dr. dr.med. Tri Hanggoro.
Email: rektorunpad.ac.id Rector of Universitas Padjadjaran
Takushoku University is one of our great partner universities in Japan. We are very honored to be part of the
internationalization process within MM FEB Unpad with Takushoku University. Looking forward to having great
cooperation in the future.
3
Welcome Speech
Prof. Koji Fujimoto
Dean of the International Cooperation Studies, Takushoku University
Email : kfujimotner.takushoku-u.ac.jp Website:
http:researchmap.jpread0128066?lang=english Seeking new possibilities for international cooperation
through two universities partnership is very exiting. The partnership with the MM FEB Unpad is enhancing our
international relations. Welcome the delegates of MM FEB Unpad to Takushoku University.
4
Welcome Speech
Dr. Nury Effendi, SE., MA
Email: nury.effendife.unpad.ac.id Dean, Faculty of Economics Business, Universitas
Padjadjaran MM FEB Unpad is one of the schools within the Faculty of
Economics and Business, Universitas Padjadjaran. Its mission is to increase the international coverage amongst students by
holding the Joint seminar held between MM FEB Unpad and Takushoku University. We confidence that students and
faculty members take various advantages from this international experience.
5
Welcome Speech
Popy Rufaidah, SE., MBA., Ph.D
Email: popy.rufaidahfe.unpad.ac.id Head, Master of Management Program, Faculty of Economics
Business, Universitas Padjadjaran It’s very honor for MM FEB Unpad to collaborate with
Takushoku University in organizing the International Joint Seminar. The challenges for graduates from business schools
are increased very rapidly. Students need practical knowledge and international exposure to align with their capabilities and
competencies. We would like to thank for all support contributed by Takushoku University.
6
PERSON IN CHARGED TAKUSHOKU UNIVERSITY
Prof. Koji Fujimoto
Dean of International Cooperation Studies Takushoku University
Email : kfujimotoner.takushoku-u.ac.jp
Prof. Ayako Sendo
Senior Professor, Faculty of Commerce Takushoku University
Email: asendohner.takushoku-u.ac.jp
Prof. Fumio Yoshino
fyoshinoner.takushoku-u.ac.jp Senior Professor, International Cooperation Studies
Takushoku University Professor of Institute of World Studies, Takushoku University
Dr. Kajiwara Hirokazu
Director of Graduate Program of International Cooperation Studies
Takushoku University Email : hkajiwaner.takushoku-u.ac.jp
UNIVERSITAS PADJADJARAN
Popy Rufaidah, Ph.D. popy.rufaidahfe.unpad.ac.id
7
PARTICIPANT LIST Master of Management Program
Faculty of Economics and Business Universitas Padjadjaran
Popy Rufaidah, Ph.D.
HEAD, MASTER OF MANAGEMENT PROGRAM FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS PADJADJARAN
8
The International Joint Seminar
Held By Takushoku University Master of Management Program, Universitas Padjadjaran
And Visit to Clean Authority of Tokyo, Tokyo Metropolitan Government
Tokyo, Japan 15
th
– 19
th
of MAY, 2017
No Photo
Identity
1
Name: Fery Agustianto
Student ID: 120820160028
Phone:
085223256333
Email: feryagustiantoyahoo.co.id
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, Ternate, Province of North Maluku
Titled of the paper:
The Effects of Socio-Economic Factors On Housing Price In Indonesia
2
Name:
Muhammad Andriyadi
Student ID: 120820160050
Phone:
085342360816
Email: andriyadi_90yahoo.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Province of Maluku
Titled of the paper:
The Effects Of Socio-Economic Factors On Housing Price In Indonesia
3
Name: Dahlia Mulyasanti
Student ID: 120820160048
Phone: +6285237873863
Email: dahlia4869gmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Jakarta
Titled of the paper:
Analysis of Value-Added Intellectual Capital Influence on Corporate’s Financial
Performance: Study of Public-Listing Companies at Indonesia Stock Exchange
9
4
Name:
Mokhamad Surianto
Student ID: 120820160020
Phone:
081276706765
Email: suriantomokhamad22gmail.com
Occupation: Head of Planning and Finance, at Land
National Agency, Riau Islands Kepulauan Riau, Ministry of Agrarian and Spatial
Planning
Titled of the paper:
Potential Determination Of The Property Tax Through Analysis Assessment Of The
Agricultural Land In The District Of Blora
5
Name: Taufik Irawan
Student ID: 120820160017
Phone: 081312201330
Email: pakelnatoregmail.com
Occupation: Controller at Finance and Development
Supervisory Agency, Republic of Indonesia BPKP, City of Pontianak, Province of
West Kalimantan
Titled of the paper:
Asset Management Analysis To Fairness Of The Goverment Financial Statement
6
Name: Temmy Pratama
Student ID:
120820160046
Phone: 081248783436
Email:
temmy.surbaktigmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Province of Maluku
Titled of the paper:
The Analysis of Asset Management to the Quality of Financial Statements of the
Government: A Case Study of Tual, Maluku
7
Name: Harry Anugerah Pradana
Student ID:
120820160063
Phone: 081217094451
Email:
harrypradana.bpkpgmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, City of Manado,
Province of North Sulawesi
Titled of the paper:
The Influence of Intangible Asset in the Form of Intellectual Capital to the Value of
Company
10
No Photo
Identity
8
Name: Affandi Subekti
Student ID:
120820160060
Phone: 081299396025
Email: affandi.subektigmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, City of Ambon,
Maluku Province
Titled of the paper:
The Influence of Intangible Asset in the Form of Intellectual Capital to the Value of
Company
9
Name: Muhammad Irvan Widya
Student ID: 120820160011
Phone:
085692114518
Email: irvanwazzagmail.com
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, Aceh Province
Titled of the paper:
The influence of Asset Management to local revenue optimization: Case study in
Bekasi City Government
10
Name:
Hanif Rahmatullah
Student ID: 120820160061
Phone:
081284378550
Email: hanifrahmatullahgmail.com
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, City of Gorontalo, Province of Gorontalo, North Sulawesi
Titled of the paper:
The Implementaton of Bandung and Surabaya E-Government and Their Key
Success Factors
11
Name:
Silvia Herera
Student ID: 120820160043
Phone:
081298461447
Email: silvia.hereragmail.com
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, Ternate, North Maluku Province
Titled of the paper:
The Implementaton of Bandung and Surabaya E-Government and Their Key
Success Factors
11
No Photo
Identity
12
Name: Nur Alam Syah
Student ID:
120820160064
Phone: 08113578843
Email:
alam_danayahoo.co.id
Occupation: Staff at the Office of Finance and Regional
Asset Management Revenue of City Government of Palopo, West Sulawesi
Titled of the paper:
The Challenges of Municipal Asset Management in Developing Country:
A Case Study of Bandung
13
Name: Sarimin
Student ID:
120820160034
Phone: 08561445286
Email:
sarimin.cakepgmail.com
Occupation: Analyst of Account Consolidation at
Directorate General of Taxation, Ministry of Finance, Jakarta
Titled of the paper:
Mobile-VCT as a Social Marketing Engine to Reduce High-Risk Sexual Behavior
The Project for HIVAIDS Prevention for Sex Workers in Cilegon City – Indonesia
14
Name: Verza Mulya Sugema
Student ID:
120820160035
Phone: 081220091979
Email: verzamulyagmail.com
Occupation: Staff at Public Health Office, Cilegon City
Government, Banten Province
Titled of the paper:
Mobile-VCT as a Social Marketing Engine to Reduce High-Risk Sexual Behavior
The Project for HIVAIDS Prevention for Sex Workers in Cilegon City – Indonesia
12
15
Name: Jarir Al Amjad
Student ID: 120820160052
Phone: 085217146670
Email: jariralamjadgmail.com
Occupation: Staff at Directorate Accounting and
Financial Reporting Directorate General of Treasury, Ministry of Finance of Republic
Indonesia, Jakarta Office
Titled of the paper:
The Use of Information in Commitment Module of the State Treasury and Budget
System SPAN-Sistem Perbendaharaan dan Anggaran Negara to Optimize the
Absorption of the State Budget APBN
16
Name: Utomo Wicaksono
Student ID:
120820160062
Phone: 081317901396
Email:
utomo.upkpgmail.com
Occupation: Staff at State Treasury Office, Jakarta III,
Regional Office of Directorate General of State Treasury, Ministry of Finance,
Republic of Indonesia, Jakarta Province
Titled of the paper:
The Use of Information in Commitment Module of the State Treasury and Budget
System SPAN-Sistem Perbendaharaan dan Anggaran Negara to Optimize the
Absorption of the State Budget APBN
17
Name: Dwita Ayu Rahmadanti
Student ID: 120820160022
Phone: 082221512424
Email:
a.dwitayahoo.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Province of Bali
Titled of the paper:
Managing Knowledge Assets For Organizational Performance
Improvement A Case Study At Finance And
Development Supervisory Agency Representative Of West Java
13
18
Name: Diyan Rasyieqa Khaeruddin
Student ID: 120820160025
Phone: 085878608986
Email: diyanrasyieqagmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Province of Bali
Titled of the paper:
Managing Knowledge Assets For Organizational Performance
Improvement A Case Study At Finance And
Development Supervisory Agency Representative Of West Java
19
Name: Ahmad Faozan Suryanto
Student ID:
120820160056
Phone: 085227463700
Email:
ahmadfaozansgmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Manokwari City,
Papua Province
Titled of the paper:
The Effect of Monitoring And Evaluation On The Effectiveness Of Local Asset
Management Empirical Study in The Government of
Malang, East Java, Indonesia
20
Name: Rendra Kurnia Wardana
Student ID: 120820160030
Phone: 081235401632
Email:
valerindra230989gmail.com
Occupation: Staff at Malang City Government, East Java
Province
Titled of the paper:
The Influence Of Monitoring And Evaluation On The Effectiveness Of The
Local Asset Management
14
21
Name: Norhina Kurniawati
Student ID:
120820160041
Phone: 082117205678
Email:
norhinagmail.com
Occupation: Staff at Secretariat of Election Commission
for West Java Province, City of Bandung
Titled of the paper:
The Evaluation Of Green Economy Principles
In Government Assets Management Case study at Central Bureau of Statistic
Central Kalimantan Province
22
Name: Rephy Ekawatie
Student ID: 120820160027
Phone: 085248026622
Email: rephy_ekawatieyahoo.co.id
Occupation:
Staff at Central Bureau of Statistic of Kapuas District at Central Kalimantan
Province
Titled of the paper:
The Evaluation Of Green Economy Principles
In Government Assets Management Case study at Central Bureau of Statistic
Central Kalimantan Province
23
Name:
Monita Mardika Fajar
Student ID: 120820160037
Phone:
082174314088
Email: mardikafajarmonitayahoo.com
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, Aceh Province
Titled of the paper:
Implementation Of Risk Based Asset Management To Increase Performance Of
Local Water Company in Aceh Region, Indonesia
15
24
Name: Khulifa Ahdizia
Student ID:
120820160032
Phone: 081316302693
Email:
kahdiziagmail.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, Aceh Province
Titled of the paper:
The Impact of Intellectual Capital to BUMD’s Performance
A Study on Local Water Company PDAM in Indonesia
25
Name: Afifa Zuhria
Student ID:
120820160019
Phone: 085330073929
Email: zuhria_afifayahoo.com
Occupation: Internal Auditor at Finance and
Development Supervisory Agency, Republic of Indonesia BPKP, City of Palembang,
South Sumatera Province
Titled of the paper:
Board Characteristics, CEO Succession, and Intellectual Capital Performance: Managing
Competitive Environment
26
Name: Dina Anggraeni
Student ID: 120820160031
Phone:
08111985943
Email: dina_august08yahoo.co.id
Occupation:
Internal Auditor at Finance and Development Supervisory Agency, Republic
of Indonesia BPKP, City of Bengkulu, Province of Bengkulu
Titled of the paper:
Understanding The Problems Of Policy Implementation Concerning Retribution On
The Use Of Regional Assets: A Case Study In The District Government Of Central
Maluku
Note: BPKP stands for Badan Pengawasan Keuangan dan Pembangunan or in English as the Finance and Development Supervisory
Agency, Republic of Indonesia. Similar to the Board of Audit of Japan
16
Abstract
17
BUSINESS PRACTICES AMONGST SMES: THE CASE OF FASHION CREATIVE INDUSTRY
Popy Rufaidah popy.rufaidahfe.unpad.ac.id
1
, Sutisna sutisna_mmunpadyahoo.com
2 1,2
Lecturers at the Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
popy.rufaidahfe.unpad.ac.id, sutisna_mmunpadyahoo.com
ABSTRACT Purpose
The purpose of this paper is to discuss the study about the practices of business amongst the SMEs of fashion creative industry in West Java,
regarding the SMEs perceptions related to the main business functions executed by the SMEs .
Design methodology approach The research used descriptive research method. Descriptive study aims to
present information in structured, factual, and accurate information on objects studied. The samples of the respondents were the SMEs in the
fashion creative industry in West Java. Expected Finding
The expected results of this study is that the SMEs in various sectors and specific sector could enhance their business practices by replicating best
practices that had been applied by the business owners of the fashion creative industry in West Java.
ManagerialPractical implication The results of the study would have managerial implication to business
owners of the SMEs in fashion creative industry, particularly in enhancing the indicator of the best practices in the business management. Practical
implication are for business owners, i.e., the following issues, could solve such following issues: firstly, the issues in relation to the labor or
workforce, how many labor is used in this business, is the current local workforce sufficient in your production activities, where are the sources of
labor used in your business, and how much wages are given today. Secondly, the issues in relation to marketing and productions, i.e., are in
your area enough raw materials available the business to grow, what are the constraints you face to get raw materials, what is the price of raw
materials for 1 times the production process, how to condition raw
18 material prices, what is the current selling price of the product, how the
production process is done in this business, is the current production site adequate, obstacles location of the current activity, and excellence
location of current activity. OriginalityValue
This paper is the only study that is done in the SMEs of fashion creative industry in West Java in investigating the practical issues faced by SMEs.
Keyword: SMEs, creative fashion industry, and business practices.
19
THE EFFECTS OF SOCIO-ECONOMIC FACTORS ON HOUSING PRICE IN INDONESIA
Fery Agustianto feryagustiantoyahoo.co.id
1,3
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Ternate, Province of North
Maluku
Muhammad Andriyadi
andriyadi_90yahoo.com
2,3 2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Province of Maluku
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose
This research aims to see the effects of socio-economic factors to the housing prices in some areas of major cities in Indonesia.
Design methodology approach This research uses econometric analysis approach with panel data that
combines time series data and cross section by copying and modifying the model of existing research, for the time series data, the researchers will
observe the data in the last 5 years which consider to represents the change of housing prices in seven big cities in Indonesia Jakarta, Surabaya,
Medan, Bandung, Makassar, Balikpapan, Palembang, with the dependent variable house price index and the independent variables Socio-economic
factors. Expected Finding
This research is expected to find extent of socio-economic factors can affect the change in housing prices in seven major cities in Indonesia. This
research is also expected to assess the city which has the biggest price changes in the last 5 years.
Practical implication The results of this research can be used as information for the actors in
housing market both consumers as the buyers and developers as the manufacturers, and can be used as a reference for determining investment
20 in housing. It also can be used as literature in determining government
policy on the provision of houses for the public sector. OriginalityValue
This research investigates socio-economic impact on the changes in housing prices in Indonesia. There have been several studies on the
housing prices in Indonesia but the research about impact of socioeconomic on housing prices in Indonesia is very rare.
Keywords: Housing Price, Socio-economic, Panel Data Analysis, Time series and Cross Section, Biggest city In Indonesia.
21
ANALYSIS OF VALUE-ADDED INTELLECTUAL CAPITAL INFLUENCE ON CORPORATE FINANCIAL PERFORMANCE: STUDY OF PUBLIC-LISTING
COMPANIES ON THE INDONESIA STOCK EXCHANGE
Dahlia Mulyasanti dahlia4869gmail.com
1,2 1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Jakarta
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose
The purpose of this research is to analyze the influence of value-added intellectual capital on corporate financial performance. This study also
attempts to identify the components of intellectual capital that may have partial influence on corporate financial performance. The study will see
evidence from the companies on the Indonesia Stock Exchange DesignMethodologyApproach
This research is designed as a quantitative research. The measurement of intellectual capital will use the VAIC Value-Added Intellectual Capital
method, as proposed by Pulic 2000. Corporate financial performance is measured by three financial ratios. They are market value, return on assets
ROA, and return on equity ROE. Multiple linear regression model will be constructed to examine the relationships between intellectual capital and
the selected financial performance measurements mentioned above. The scope of this research include the analysis of partial influence of
intellectual capital components separately on corporate financial performance and the analysis of influence of intellectual capital itself as a
whole on corporate financial performance. This research uses data from all companies listed on the Indonesia Stock Exchange from 2010 to 2015, not
including banking sector, mining sector, and state-owned companies. The companies selected as sample are the ones that present the components
of intellectual capital on their annual reports. Expected Findings
The hypothesis developed in this research is that intellectual capital has significant influence to improve corporate financial performance.
Therefore, the expected result of this research is that intellectual capital is
22 an inseparable part of the company that play an important role to
encourage improvement in corporate financial performance. Practical Implications
This research will expose extensive analysis coverage about the contribution of intellectual capital components to encourage improvement
in corporate financial performance. This analysis is expected to help investors in their investment decision making. On the other hand, from
companies perspective, this research will serve as a wake up call to encourage them about the importance of intellectual capital existence.
OriginalityValue This research not only contributes to the knowledge of intellectual capital
research, but also adds value to the existing literature of intellectual capital components in relation to corporate financial performance. This research is
spesifically done in Indonesia. Therefore, it clearly gives a brief description about intellectual capital progress based on Indonesian corporate point of
view. Although the research on intellectual capital performance has been done in many years, this research gives the newest and updated research
result from the last five year data. Keywords: Value-Added Intellectual Capital, Corporate Performance,
Profitability, Market Value, Return on Assets ROA, Return on Equity ROE
23
POTENTIAL DETERMINATION OF THE PROPERTY TAX THROUGH ANALYSIS ASSESSMENT OF THE AGRICULTURAL LAND IN THE DISTRICT OF BLORA
Mokhamad Surianto
suriantomokhamad22gmail.com
1,2
1
Head of Planning And Finance, at Land National Agency, Riau Islands Kepulauan Riau, Ministry of Agrarian and Spatial Planning
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose
The aim of this study was to determine the factors that affect the agricultural land value in the District of Blora and potential of the property
tax that still be able to be collected. Design Methodology Approach
This research method is quantitative method by analysis method that used to determine how much the independent variables factors that affect the
value of agricultural land affect the dependent variable the value of agricultural land is a method of multiple regression analysis. This study
examined six 6 variables, namely Accessibility X1, Productivity Land X2, The Kind of The Land X3, the Topography of The Land X4, the distance of
the land from the settlement X5 and the Availability of Irrigation X6 as the independent variables on Agricultural Land Values Y as the dependent
variable. As for determining how much revenue of potential of property tax PBB that still be accepted by the Assessment Ratio analysis method,
namely by analyzing the ratio between the agricultural land value with a Tax Object Sale Value NJOP as determined by the Department of Regional
Income. Expected Findings
Hypothesis testing is to be conducted in this study is to explain the relationship between the independent variables which covers Accessibility
X1, Productivity Land X2, The Kind of The Land X3, The Topography of The Land X4, The distance of the land from the settlement X5 and The
Availability of Irrigation X6 with the dependent variable, namely the agricultural land Values Y and to determine how much revenue of
potential of property tax PBB that still be accepted by analyzing the ratio
24 between the value of agricultural land with a Tax Object Sale Value NJOP
set by the local Department of Regional Revenue. Practical Implications
The practical implication of this study is to provide information and feedback on the performance of land assessment in the establishment of
NJOP. This study can be used as an evaluation of the determination of the NJOP as well as consideration for the improvement of the determination of
the NJOP especially agricultural land di District of Blora for Blora Regency Government.
Originality Value This study will present how many factors that affect the agricultural land
value through multiple regression analysis. Through multiple regressions analysis will be obtained mathematical formula to be used to calculate the
value of agricultural land. Furthermore, by comparing the agricultural land value with a Tax Object Sale Value NJOP will be acquired potential
revenues of Property Tax PBB that still be able to be accepted. Keywords: NJOP, PBB, Agricultural Land Value, Multiple Regressions,
Assessment Ratio
25
THE ANALYSIS OF ASSET MANAGEMENT TO THE QUALITY OF FINANCIAL STATEMENTS OF THE GOVERNMENT A CASE STUDY OF TUAL, MALUKU
Taufik Irawan pakelnatoregmail.com
1,3
1
Controller at the Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Pontianak, Province of
West Kalimantan
Temmy Pratama temmy.surbaktigmail.com
2,3
2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Province of Maluku
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose This study aims to analyze how asset management is implicated on the
quality of financial statements of the government, especially to provide an understanding of how asset legal audit assessment, asset inventory, asset
valuation, asset optimization, asset monitoring and control can improve the quality of financial statements of the local government.
Design methodology approach This research will use descriptive and analytic methods, which involve four
data collection techniques – interview, document analysis, questionnaire and observation. To collect the data, the authors undertook a case study in
the municipal government of Tual, Maluku in Indonesia. Data were acquired from official and publicly available documents and interviews
with key figures who involved in administrating and organizing assets and also those who prepared financial statements.
Expected Finding This study will provide information about a number of problems in
implementing asset management in the municipal government and provide the critical success factors for asset management related to asset
legal audit assessment, asset inventory, asset valuation, asset monitoring and control which implicate on the quality of financial statements. It will
help the local government to improve asset management system and the quality of financial statements.
26
Practical Implication The results of this study will have managerial implication for the local
government in managing the quality of asset management that affect the quality of the financial statements. This study will also provide practical
implication such as improving legal audit assessment, asset inventory, asset valuation, asset optimization, asset monitoring and control.
OriginalityValue The study that analyzes the influence of asset management on the quality
of financial statements of the government in Indonesia is very rare and this study is the only study that will be conducted in the municipal government
of Tual, Maluku. Keyword: Asset management, local government financial statement, legal
audit assessment, asset inventory, asset valuation, asset monitoring and control, municipal government of Tual.
27
THE INFLUENCE OF INTANGIBLE ASSET IN THE FORM OF INTELLECTUAL CAPITAL TO THE VALUE OF COMPANY
Affandi Subekti affandi.subektigmail.com
1,3
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Ambon, Maluku
Province
Harry Anugerah Pradana harrypradana.bpkpgmail.com
2,
2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Manado, Province of
North Sulawesi
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose This study analyzes the influence of Intangible Asset in the form of
Intellectual Capital to company value through the financial performance as an intervening variable. Intellectual Capital as the independent variables
was measured using the Value Added Intellectual Capital VAIC. The object of this study is the banking companies listed in Indonesia Stock Exchange
Bursa Efef Indonesia BEI. DesignMethodologyApproach
This research is a quantitative descriptive research, which aims to test and attest the influence of intellectual capital on corporate value with the
financial performance as an intervening variable. This study will use secondary data obtained from banking companies listed in Indonesia Stock
Exchange in 2013-2015. This study will examine three variables, namely the intellectual capital as an independent variable independent, the financial
performance as an intervening variable, and the value of the company as dependent variable dependent.
Expected Finding The hypothesis testing to be conducted in this study is to see whether
there is the influence of independent variables Intellectual Capital on the dependent variable Company Value directly and indirectly through the
mediating variablesintervening Financial Performance. So the results of
28 this study are expected to explain the relationship between the
independent variables Intellectual Capital on the dependent variable Company Value and the extent to which the Intellectual Capital can affect
the value of the company. Practical Implication
The implications of this study are expected to provide information to the company management in evaluating financial performance and the
performance of its intellectual capital that will maximize the value of the company and for users of financial statements, especially investors, this
research can be used as a reference in the decision making. OriginalityValue
This study will be conducted at the banking company whose name has been listed on the Indonesia Stock Exchange in 2013-2015, to see how the
influence of intangible assets such as Intellectual Capital on corporate value.
Keyword: Intellectual Capital, Financial Performance, Value of The Firm.
29
THE CHALLENGES OF MUNICIPAL ASSET MANAGEMENT IN DEVELOPING COUNTRY: A CASE STUDY OF BANDUNG
Marga Gumelar marga16001mail.unpad.ac.id
1,3
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Palangkaraya, Province
of Central Kalimantan
Nur Alam alam_danayahoo.co.id
2,3
2
Staff at the Office of Finance and Regional Asset Management Revenue of City Government of Palopo, West Sulawesi
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose: The research is aimed to identify the problems on public asset
management of municipality by evaluating the local government asset management system. The asset management include several aspects
namely asset inventory, asset protection and asset utilization. Designmethodologyapproach:
A case study in the city government of Bandung – West Java, Indonesia – is used as an approach to achieve the research objective. The study involved
three data collection techniques: document analysis, questionnaire and interview. It applies likert scale analysis tool to measure attitude, opinion
and perception of government officers about municipal asset management.
Expected findings: The findings will provide information about the problems appear in the
implementation of the municipal asset management that include asset inventory, asset protection and asset utilization. It will help local
government to improve the asset management system so that the municipal assets can be organized and well managed and it would be able
to contribute to the economy.
30
Practical implication: The research will define the problems in the asset management system
within the local government and it will answer each of these challenges with practical suggestions. The result is expected to provide a guidance for
local authority to cut out the circles of asset management issues which have become a classical problem for years.
Originalityvalue: The paper will offer information for further research on considering the
environment and activities of local government asset management system. Keywords: asset management system, public asset management,
municipal asset, local government, Bandung
31
THE INFLUENCE OF ASSET MANAGEMENT TO LOCAL REVENUE OPTIMIZATION: CASE STUDY IN BEKASI CITY GOVERNMENT
Muhammad Irvan Widya irvanwazzagmail.com
1,2
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Aceh Province
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose:
This study aims to analyze the influence of asset inventory, asset legal audit, asset valuation, and asset monitoring and control to Bekasi City
Government’s local revenue optimization. Design methodology approach:
This research is a correlational study with its aims to present the influences of asset inventory, asset legal audit, asset valuation, and asset monitoring
and control to Bekasi City Government’s local revenue optimization. The sample research is taken by purposive sampling method. Research
population includes the people who directly charged and involved in Bekasi City Government asset management and local revenue services.
Expected findings: The hypothesis developed in this study include: asset inventory positively
influences local revenue optimization, asset legal audit positively influences local revenue optimization, asset valuation positively influences
local revenue optimization, and asset monitoring and control positively influences local revenue optimization.
Practical implication: The result is expected to be useful as a reference for Bekasi City
Government in making decision on asset management, and as a literature on asset inventory, asset valuation and legality for realizing good asset
management in local government. Originality value:
32 Research on the influence of asset management to Bekasi City’s
Government Local revenue Optimization has never done before, so this study acts to explain the problems on the asset management or local
revenue optimization. Keywords: Asset management, asset inventory, asset legal audit, asset
valuation, asset monitoring and control, local revenue optimization.
33
THE IMPLEMENTATON OF BANDUNG AND SURABAYA E-GOVERNMENT AND THEIR KEY SUCCESS FACTORS
Hanif Rahmatullah hanifrahmatullahgmail.com
1,2
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Gorontalo
Silvia Herera silvia.herera
1,2
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Ternate, North Maluku
Province
2
Students of Master of Management Program, Faculty Of Economics and Business, Universitas Padjadjaran
Abstract Purpose
This study aims to evaluate the e-government’s implementation in both cities based on indicators that have been set by Liu 2010 using variable
contents, functions and construction indexes and determines five keys success factors developed by khalil et al 2001. The First section will
describe the background problems, followed by a discussion of the government in Indonesia, refers to Bandung and Surabaya at the second
section. The Third section explains the local government itself and the model of e-government implementation at the fourth section. Research
questions will be at the fifth section and the remaining section will discuss findings and conclusion of the study.
Design methodology approach The comparison of two cities will be based on framework of e government
evaluation using web content analysis method. Meanwhile, the determination of their keys success factors will use the five elements by
Khalil et al 2002. Expected Finding
This study are expected to create deeper understanding of the e government implementation level both in Bandung and Surabaya and how
the way they achive that success.
34
Practical Implication The findings of this study not only can be used to develop the existing e-
government system both in Bandung and Surabaya but also can be used for consideration of the other municipal city government to adopt and
implement the best practice. Originality Value
This study refers to the key success factor of e-government implementation on both local governments which can be a benchmark to
other local governments in Indonesia while the previous research discusses the implementation of e-government on the city in certain countries..
Keywords: e-government, key success factor, and local government.
35
MOBILE-VCT AS A SOCIAL MARKETING ENGINE TO REDUCE HIGH-RISK SEXUAL BEHAVIOR THE PROJECT FOR HIVAIDS PREVENTION FOR SEX
WORKERS IN CILEGON CITY – INDONESIA
Verza Mulya Sugema verzamulyagmail.com
1,3
,
1
Staff at Public Health Office, Cilegon City Government, Banten Province
Sarimin sarimin.cakepgmail.com
2,3
2
Analyst of Account Consolidation at Directorate General of Taxation, Ministry of Finance, Republic of Indonesia, Jakarta
3
Students of Master of Management Program, Faculty Of Economics and Business, Universitas Padjadjaran
Abstract Purpose
This study aims to determine the role of Mobile-VCT Voluntary Counselling and Testing as a social marketing tool in minimizing the high
risk of contracting HIVAIDS from sexual behavior for the population of Cilegon City. The exchange of information in the counseling process
provides an alternative perception in determining the attitude of people, while social marketing in health known as health promotion has
contributed greatly to influence people to live a healthy lifestyle. Mobile- VCT as an integrated interactive service aims to offer multiple benefits for
its clients. DesignMethodologyApproach
This study uses a quantitative method by using primary and secondary data sourced from information and questionnaires distributed to the population
at risk of contracting HIVAIDS through sexual behavior, in this case the population are participantsclients in the Mobile-VCT held in Cilegon City.
In the questionnaires distributed, there are questions associated with the Mobile-VCT and its influence on changes in sexual behavior of the
population at risk for clients classified as WPSTL Indirect Female Sex Workers. Measurements are performed using statistical analysis to
determine the influence of Mobile-VCT service in reducing high-risk sexual behavior.
Expected Finding The hypothesis developed in this study is that Mobile-VCT service as a tool
of social marketing has an important role in changing high-risk sexual
36 behavior in the population that are at high risk of contracting HIVAIDS.
This study involved WPSTL as samples with the hope of improving the quality of healthcare for them in particular and the public in general.
Practical Implication This study will determine to what extent the Mobile-VCT as a social
marketing tool influences the changing of high-risk sexual behavior in high- risk populations in relation to reducing the number of cases of HIVAIDS in
Cilegon City. The aspect of information is important in behavior change project. Information is obtained from the counseling process in both
directions between the counselors and the clients as well as the status of HIV screening test results obtained by the clients.
OriginalityValue This study provides valuable information, in particular for the populations
that are directly at risk, where the use of VCT service can be utilized by the public from all walks of life, intended in general and not limited to any risk
populations. The population at risk is a key population, and certainly the right parties in extracting information in the implementation of this study,
which is of course the results of this study contribute positively to the development of health in Cilegon City.
Keywords: Mobile-VCT, social marketing, bahavior changes.
37
THE USE OF INFORMATION IN COMMITMENT MODULE OF THE STATE TREASURY AND BUDGET SYSTEM SPAN-SISTEM PERBENDAHARAAN DAN
ANGGARAN NEGARA TO OPTIMIZE THE ABSORPTION OF THE STATE
BUDGET APBN
Jarir Al Amjad jariralamjadgmail.com
1,3
,
1
Staff on Directorate Accounting and Financial Reporting at Directorate General of Treasury, Ministry of Finance, Republic Indonesia, Jakarta Office
Utomo Wicaksono utomo.upkpgmail.com
2,3
2
Staff at State Treasury Office, Jakarta III, Regional Office of Directorate General of State Treasury, Ministry of Finance, Republic of Indonesia, Jakarta Province
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose
The purpose of this study is to examine the effectiveness, accountability, and timeliness of process of state expenditure through the use of
information in commitment management of the State Treasury and Budget System SPAN.
Design methodology approach Commitment management as a tool intended to improve effectiveness and
timeliness will be investigated. This paper will compare information which is found in the commitment management and the implementation of
budget absorption in Indonesia, through State Treasury and Budget System SPAN.
Expected Findings The main expected finding is commitment management has a positive
impact on effectiveness, accountability, and timeliness of the process of public expenditure. Some evidence will provide that there is consistency
between the engagement process in commitment module and the realization of the State expenditure in payment module.
Practical Implications Managers will take notice to information in commitment management as a
benchmark of consistency and optimization the process of State
38 expenditure to achieve the effectiveness, accountability, and timeliness of
public expenditure implementation. Originality Value
The information in this paper would broaden that the usefull timely information will improve the performance of public finance management.
Keywords: commitment management, SPAN, the state budget
39
MANAGING KNOWLEDGE ASSETS FOR ORGANIZATIONAL PERFORMANCE IMPROVEMENT A CASE STUDY AT FINANCE AND DEVELOPMENT
SUPERVISORY AGENCY REPRESENTATIVE OF WEST JAVA
Dwita Ayu Rahmadanti a.dwitayahoo.com
1,3
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Province of Bali
Diyan Rasyieqa Khaeruddin diyanrasyieqagmail.com
2,3
2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Aceh Province
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose:
This research aims to identify the knowledge asset management owned by Finance and Development Supervisory Agency Badan Pengawasan
Keuangan dan Pembangunan BPKP and analyze the role of knowledge asset in the process of employee performance improvement that
encourages organizational performance improvement at BPKP. Designmethodologyapproach:
This research uses descriptive method and quantitative data analysis. The data used in this research consist of primary data and secondary data.
Primary data are obtained from the result of questionnaires. Secondary data are obtained through literature study, such as books, journals, and
other supporting data. The sampling technique used in this research is judgement sampling method and data analysis technique uses Structural
Equation Model SEM and Partial Least Square PLS as an alternative development.
Expected findings: The result is expected to provide an overview of distribution of knowledge
assets, including what is the most knowledge asset, and what knowledge assets that still needs to be improved as well as how the condition of
knowledge creation process. In addition, this research is also expected to provide information about the effect of knowledge assets management on
40 organizational performance improvement and see the variable that has the
greatest contribution in organizational performance improvement at BPKP. Practical implication:
The result of this research is expected to become a means to understand how a knowledge asset management affects organizational performance at
BPKP and can provide information to management as the basis for evaluating performance. Such information can be used as an important
contribution for the organization to improve the competence of employees, maintain the availability of knowledge, innovation and product
development in ensuring the success and the existence in the future. Originalityvalue:
This research particularly aims to explore knowledge assets management on the employees of BPKP with the position of functional auditor and their
role in organizational performance improvement at BPKP in implementing their supervisory function.
Keywords: intangible assets, knowledge, knowledge asset, knowledge management, organizational performance
41
THE EFFECT OF MONITORING AND EVALUATION ON THE EFFECTIVENESS OF LOCAL ASSET MANAGEMENT EMPIRICAL STUDY IN THE
GOVERNMENT OF MALANG, EAST JAVA, INDONESIA
Ahmad Faozan Suryanto ahmadfaozansgmail.com
1,3
,
1
Internal auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia, Manokwari City, Papua Province
Rendra Kurnia Wardana valerindra230989gmail.com
2,3
2
Staff at Malang City Government, East Java Province
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose This study discusses the proposal of research to study the influence of
monitoring and evaluation conducted by internal management or external parties on the effectiveness of local asset management particularly in the
Government of Malang. DesignMethodologyApproach
The methods used in this research are descriptive and verification methods. Descriptive study is conducted to know and be able to explain
how the monitoring and evaluation variable can affect the effectiveness of local asset management practice in the Government of Malang. The
method of verification analysis is used to examine the relationship between independent variables, namely monitoring x1 and evaluation
x2, and dependent variable, that is the effectiveness of local asset management.
Expected Finding Hypothesis testing that is developed in the research is that the better the
improvement and adherence to monitoring and evaluation, the more effective the local asset management implementation. So, the results of
this research are expected to define the significant positive effect of monitoring and evaluation on the effectiveness of local asset management.
42
Practical Implication The practical implication of this research is expected to provide
information about the importance of monitoring and evaluation activities in order to achieve effectiveness in local asset management. It is
emphasized that monitoring and evaluation play an important role in the effectiveness of local asset management.
OriginalityValue The research on local asset management, especially in the Government of
Malang are still very rare. This paper will examine about how monitoring and evaluation activities can affect the effectiveness of local asset
management in 45 departments in the Government of Malang. This paper is expected to contribute to the local government on the importance of
monitoring and evaluation activities in order to achieve effectiveness in asset management.
KEYWORDS: effect of monitoring and evaluation, local asset management effectivenes
43
THE EVALUATION OF GREEN ECONOMY PRINCIPLES IN GOVERNMENT ASSETS MANAGEMENT CASE STUDY AT CENTRAL BUREAU OF STATISTIC
CENTRAL KALIMANTAN PROVINCE
Rephy Ekawatie rephy_ekawatieyahoo.co.id
1,3
1
Staff administration at Central Bureau of Statistic, Kapuas District, Central Kalimantan Province
Norhina Kurniawaty norhinagmail.com
2,3
2
Staff at Secretariat of Election Commission for West Java Province, City of Bandung
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT
Purpose The aim of this research is to evaluate the principles of green economy in
the management of government assets related to adaptive reuse of idle assets to optimize idle assets buildings and constructions.
Design methodology approach Green economy becomes perspective in which to view the problem of idle
assets building and construction in the Central Bureau of Statistics Central Kalimantan province. The method used in this study is a combination of
quantitative and qualitative methods mix methods. Model of concurrent method with concurrent triangulation strategy became the model of mix
methods used in this study. Quantitative method was used to know the statistical relationship between the adaptive reuse of idle assets building
and construction with optimazation government asset management. Qualitative method was used to describe the relationship shown by the test
results of Spearman Rank Order Correlation nonparametric statistics on quantitative method.
Expected finding The expected outcome of this study is the relationship between the
adaptive reuse of idle assets building and construction with the Government asset management optimization as the compliance with the
principles of green economy in the management of government assets.
44
Practical implication This study helps to find solutions and formulate policies based on the
principles of green economy related to the management of idle assets building and construction in the Central Bureau of Statistics Central
Kalimantan province. Originality value
This study aims to look at the relationship of the principles of green economy in the management of government assets associated with
adaptive reuse of idle assets building and construction for optimizing the management of government assets in the Central Bureau of Statistics
Central Kalimantan province. Limitation of study
This study evaluated the principles of green economy in the management of government assets in the Central Bureau of Statistics Central Kalimantan
province confined to the adaptive reuse of idle assets building and construction.
Keyword: green economic principles, adaptive reuse of idle assets building construction, optimization of asset management.
45
IMPLEMENTATION OF RISK BASED ASSET MANAGEMENT TO INCREASE PERFORMANCE OF LOCAL WATER COMPANY PDAM IN ACEH
Abstract
Monita Mardika Fajar mardikafajarmonitayahoo.com
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Aceh Province
Student of Master of Management Program, Faculty of Economics And Business, Universitas Padjadjaran
Purpose The purpose of this research is to study implementation of risk based asset
management to increase performance of local water company in Aceh Province, Indonesia, well-known as Perusahaan Daerah Air Minum PDAM,
regarding perceptions related to risk based asset management with the intention to increase its performance.
Design methodology approach The research will use descriptive qualitative analytic method. The
descriptive study aims to present information in a structured, factual, and accurate information on the risk based asset management which increase
performance of a local water company in Aceh. The population of this study is the local water company in Aceh and surrounding areas who have
relation with the company. The population of this study are the PDAM in Aceh that have been conducted operational audits by the Finance and
Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, well known as Badan Pengawasan Keuangan dan
Pembangunan BPKP. The study involved four data collection techniques – observation, document analysis, questionnaire and interview.
Expected Finding The finding developed in this study is the asset inventory, asset priority,
asset management plan, and action with risk bases. So, the expected results of this study is the asset management plan that calculating risk in
the planning and in the implementation. It will help local water company PDAM to improve its asset management system so that the company
assets can be organized and well-managed, while also can contribute to the company’s performance.
46
Practical Implication This study will find the concept of risk based asset management that can
be applied in a local water company in Aceh to increase its performance. The performance indicator of a local water company based on
Development Support Agency Water Supply System, well-known as Badan Pendukung Pengembangan Sistem Penyediaan Air Minum BPPSPAM,
consists of financial, service, operational, and human resource aspects. Some indicators in each aspect related to the asset management.
Originality Value The research was conducted on a local water company in Aceh, Indonesia,
which studied the concept of risk based asset management with the intention to increase its performance based on BPPSPAM indicators. Only
few researchers have done this type of study. It will also provide a basis for further research that focuses on analyzing the context and processes of
risk based asset management Keywords : risk based asset management, PDAM, Aceh, performance
47
THE IMPACT OF INTELLECTUAL CAPITAL TO BUMD’S PERFORMANCE A STUDY ON LOCAL WATER COMPANY PDAM IN INDONESIA
Khulifa Ahdizia kahdiziagmail.com
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia, Aceh Province
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose:
The aims of this research are to analyze and to obtain the empirical evidence about the impact of intellectual capital to BUMD’s performance.
This research focuses on the Local Water Company PDAM in Indonesia. Designmethodologyapproach:
This research will use a quantitative method by utilizing the secondary data. The Development of Support Agency of Water Supply System
BPPSPAM will provide the secondary data, which was collected from PDAM’s performance evaluation report in the year of 2015. This study
applies a structural path model to financial data in analyzing the relationship between four components of Intellectual Capital IC, which are
innovation capital, process capital, human capital, and customer capital, as well as the causal effects of intellectual capital on firm’s financial
performance. Expected findings:
The hypothesis in this study develops a significant relationship between intellectual capital and firm’s financial performance, so the expected result
of this study is the intellectual capital affected to firm’s financial performance.
Practical implication: The results of this study are expected to be used as a source of information
and a useful input for the firm. It is also expected to contribute thoughts on the importance of intellectual capital component to improve the
performance of the firm, so that it can contribute to increase local income area.
48
Originality value: This paper studies on PDAM in Indonesia. It analyzes and obtains the
empirical evidence about the impact of intellectual capital to PDAM’s financial performance.
Keywords: Intellectual capital, firm’s performance, local government owned enterprises
49
Board Characteristics, CEO Succession, and Intellectual Capital Performance: Managing a Competitive Advantage
Afifa Zuhria zuhria_afifayahoo.com
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia, South Sumatera Province
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT
Purpose The aim of this paper is to analyze the effect of board characteristic and
Chief Executive Officer CEO succession in developing intellectual capital performance in Public Listed Indonesia State Owned Enterprises from 2006
to 2015. This study is a modification of several studies. Design methodology approach
This study hypothesis was developed based on the upper echelon theory and resource dependency theory. Intellectual capital performance will be
measured by the Value Added Intellectual Coefficient-VAIC method which proposed by Pulic 1998. This study uses data that encompasses 20
Indonesian State Owned Enterprises listed on the Indonesian Stock Exchange from year 2005 to 2016. The multiple regression analysis be used
to examine this research hypothesis using SPSS software Statistical Package for Social Science version 20.0.
Expected Finding The findings will provide that board characteristics and CEO succession play
crucial role to encourage corporate intellectual capital performance improvement. Therefore, there is a prediction of positive, negative, or
inconsequential outcomes when it comes to hire new CEO, so this study will reveal the relationship between CEO succession event and intellectual
capital performance. Practical Implication
The information in this study will define several implications in intellectual capital performance research that may apply in firm activities. First, the
finding of this study will provide board characteristics which can help companies to overcome skill deficiencies with intellectual capital
50 performance improvement related to future earnings. Second, the result is
expected to provide guidance for companies to control CEO succession effect with intellectual capital performance improvement.
Originality Value This study findings can be viewed as a new perspective on company
succession as a highlights of intangible asset that can increase intellectual capitals performance. There has been a lack of research deal with CEO
succession as an alternative way in improving intellectual capital. This paper tries to reveal the important of succession issues in corporate
governance to explain the implication on intellectual capital performance. Keyword: board characteristics, CEO succession, intellectual capital
performance
51
UNDERSTANDING THE PROBLEMS OF POLICY IMPLEMENTATION CONCERNING RETRIBUTION ON THE USE OF REGIONAL ASSETS: A CASE
STUDY IN THE DISTRICT GOVERNMENT OF CENTRAL MALUKU
Sut Mutiah mutiahsangadjigmail.com
1,2
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia, Maluku Province
Dina Anggraeni mutiahsangadjigmail.com
1,2
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia, City of Bengkulu, Province of Bengkulu
2
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT
Purpose: The research is aimed to identify the problems of policy implementation concerning retribution on the use of regional assets in the
District Government of Central Maluku. Successful implementation involves organization, interpretation, and application.
Designmethodologyapproach: A case study in the District Government of Central Maluku is used as the approach to achieve the research
objective. The study involves three data collection techniques – observation, document analysis, and interview.
Expected Findings: The findings will provide information of problems in implementing the policy concerning retribution on the use of regional
assets in the District Government of Central Maluku that include organization, interpretation, and application. It will help the local
government to reformulate the policy and improve the policy implementation performance so that the use of government’s assets can
be well-organized and managed and contribute to the local revenue. Practical Implication: The research will define the problems in
implementing the policy concerning retribution on the use of regional assets in the local government and it will answer each of these inhibiting
factors with practical suggestions. The result is expected to provide guidance for the local government to cut out the circles of asset issues
52 which have become a classical problem for years.
OriginalityValue: The paper will offer a basis for further research focused on analyzing the context and implementation of policy concerning
retribution on the use of regional assets. Keywords: implementation, retribution on the use of regional asset policy,
the District Government of Central Maluku.
53
Full Paper
54
BUSINESS PRACTICES AMONGST SMES: THE CASE OF FASHION CREATIVE INDUSTRY
Popy Rufaidah popy.rufaidahfe.unpad.ac.id
1
, Sutisna sutisna_mmunpadyahoo.com
2 1,2
Lecturers at the Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose
The purpose of this paper is to discuss the study about the practices of business amongst the SMEs of fashion creative industry in West Java,
regarding the SMEs perceptions related to the main business functions executed by the SMEs .
Design methodology approach The research used descriptive research method. Descriptive study aims to
present information in structured, factual, and accurate information on objects studied. The samples of the respondents were the SMEs in the
fashion creative industry in West Java. Expected Finding
The expected results of this study is that the SMEs in various sectors and specific sector could enhance their business practices by replicating best
practices that had been applied by the business owners of the fashion creative industry in West Java.
ManagerialPractical implication The results of the study would have managerial implication to business
owners of the SMEs in fashion creative industry, particularly in enhancing the indicator of the best practices in the business management. Practical
implication are for business owners, i.e., the following issues, could solve such following issues: firstly, the issues in relation to the labor or
workforce, how many labor is used in this business, is the current local workforce sufficient in your production activities, where are the sources of
labor used in your business, and how much wages are given today. Secondly, the issues in relation to marketing and productions, i.e., are in
your area enough raw materials available the business to grow, what are the constraints you face to get raw materials, what is the price of raw
55
materials for 1 times the production process, how to condition raw material prices, what is the current selling price of the product, how the
production process is done in this business, is the current production site adequate, obstacles location of the current activity, and excellence
location of current activity. OriginalityValue
This paper is the only study that is done in the SMEs of fashion creative industry in West Java in investigating the practical issues faced by SMEs.
Keyword: SMEs, creative fashion industry, and business practices.
56
INTRODUCTION
The government develops the creative industry through the issuance of Presidential Instruction Inpres Number 6 Year 2009 on Creative Economy
Development. This Instruction is the basis for all stakeholders in developing 14 sectors of creative economy. The sub-sectors of creative industries
included in the scope of development of the Ministry of Industry of the Republic of Indonesia are fashion, craft, computer services, and software.
The Indonesian fashion industry is experiencing an uplifting increase as it proves to be escalated to reach the value of USD 137.7 million for total
exports of Non-knitted garments BPS 2017.
Currently, the Provincial Government of West Java has a Regional Mid- Term Development Plan RPJMD Year 2013-2018. The creative industry
has been designated as one of the sectors that receive special attention in the RPJMD which is reflected in the strategy, the direction of development
policy, the establishment of missions, objectives and targets and programs. It has even been set development scenario 10 ten Common Goals based
sectoral thematic, one of which is the development of creative industry.
In accordance with RPJMD Jabar 2013-2018, on the Strategy and Direction of Regional Development Policy, stated that one of the missions to be
achieved Second Mission is Building a Robust and Fair Economy. One of the derivative programs to achieve the mission is reflected in the strategy
of Industry Sector, which is to increase the competitiveness of industry. This is done through: a upgrading of small and medium industries and
inter-industry partnerships; B increasing the production and quality of leading industries agro industry, creative industries and communication
information technology industries. Seen the creative industry became one of the focus of industrial programs to achieve the mission.
The development of creative industry is one of the most important sectors in supporting the increase of local revenue, it is emphasized on the
explanation of Scenario of Region Based Development thematic cantonal. It is stated that from the four Governance and Development Coordination
Areas WKPP, it turns out that WKPP IV Priangan Territory is given responsibility for: 1. Developing a Higher Education and Integrated
Research Area in Jatinangor, 2. Developing poultry populations, freshwater and capture fisheries, Dairy cattle, beef cattle, Garut sheep and its network
and development of animal feed production centers, 3. Developing
57
industrial crop production coffee, tea, cocoa, rubber, volatile and horticulture vegetables, fruits, ornamental plants export oriented ; 4.
Developing trade services and creative industries, 5. Developing Metropolitan Bandung Raya, a new growth center growth center
Pangandaran and Rancabuaya. In this context, it is appropriate to conduct research focus on 2014 period to explore the behavior of business
functions of business actor of fashion product creative industry in WKPP IV Priangan Territory.
LITERATURE REVIEW
Various studies about SMEs have been investigated amongst scholars, such as the study of Hadood et al 201 is to investigate the network
promotion role of export promotion programmes in driving small and medium enterprises’. The study discovers that the export promotion
programmes enhanced all forms of SMEs’ connections, had an indirect effect on export performance. Additionally, only connections with
overseas consumers had a positive effect on export performance. Al- Najjar and Al-Najjar 2017 studied the influence of external funding
needs on both firm value and corporate governance instruments within the UK SME context. They find an encouraging relationship
between external funding necessities and organizational value. Furthermore, they identified that size and profitability are positively
accompanying with firm value in the sample.
Dart Sarkar 1990 studied the comparison of selected practices and problems across countries about the evidence on the managerial practices
and problems of the SMEs in Malaysia, Thailand and Singapore. Their findings reveal that the medium size firms are generally more aware and
more likely to utilize the various managerial tools than the smaller firms. Then, the SMEs appear to have a very limited knowledge of the overall
spectrum of managerial practices. Among the managerial problems, most SMEs faced the problems on high overhead costs, poor employee
attitudes, and the inability to compete in international markets, high taxes and interest rates are beyond the control of the SMEs.
Explanation of business functions can be done through the approach activities of firm business functions, such as human resources and
operations. The explanations on the business function sourced from
58
Rufaidah 2013: 69-80 are used for this research. It examines the implementation of HR functions in particular exploring the amount of labor
employed in the business, the adequacy of local labor used currently in production activities, the labor resources used in the business, the current
wage value. For this years research, then examine the implementation of production operation function especially exploring the availability of raw
materials in the area where the business, constraints faced to obtain raw materials, raw material prices for one-time production process, raw
material price conditions. The production process undertaken in the business, the adequacy of the current production site, the constraints of
the current location of the activity and the location superiority of the current activity.
RESEARCH METHODOLOGY
To conduct the research, the survey method is done by cross sectional. The reason for the application of the method because of this method has three
advantages Aaker, et al 2011: 224, first, cost; Second, better results; and third, the shorter and more reliable data collection period.
The research used qualitative and quantitative methods. In the first phase, qualitative methods are conducted by conducting interviews to internal
stakeholders at institutions within the Government of West Java that have links in the development of creative economy in West Java. Item used to
examine business practices, particularly, in HR Management amongst SMEs in creative industry based on fashion products are as follows: How many
labor is used in this business, Is the current local workforce sufficient in your production activities, Where are the sources of labor used in your
business, and How much wages are given today.
Item used to examine business practices, particularly, in production area amongst SMEs in creative industry based on fashion products are as
follows: Are in your area enough raw materials available the business to grow, What are the constraints you face to get raw materials, What is the
price of raw materials for 1 times the production process, How to condition raw material prices, What is the current selling price of the product, How
the production process is done in this business, Is the current production site adequate, Obstacles location of the current activity, and Excellence
location of current activity.
59
In the second phase, quantitative method is applied, that is by applying cross sectional method by using descriptive analysis on perceptions of
creative industries of textile-based products as part of creative industries produced in West Java. The stages in this research activity started from
primary and secondary data collection to determine the application of binis functions, innovation and technology that applied, as well as dynamic
capabilities of business actors.
In the second phase, quantitative method is applied, that is by applying cross sectional method by using descriptive analysis on perceptions of
creative industries of textile-based products as part of creative industries produced in West Java. The stages in this research activity from binis
functions, innovation and technology that applied, as well as the dynamic capabilities of business actors.
RESULTS AND DISCUSSIONS
This section presents the results of the survey on the application of business functions by the business players of creative industries of fashion
products made from textiles. The discussion is based on the statement items derived from these dimensions.
The results of the study show that of the 109 respondents of creative industries business of fashion products made from textiles, most of the
respondents were aged between 26-45 years with a percentage of 31 while those under the age of 18 are only about 2.
Most of the respondents are men with percentage of 67 while the remaining 33 are female respondents. Most of the SMEs are high school
graduates with a percentage of 46. Of the 109 respondents who are creative industries of fashion products made from textiles, most
respondents have lived in the place now more than 10 years with a percentage of 53 while respondents who have lived about 1 year only as
much as 9.
Most respondents of the SMEs are come from Bandung with percentage of 30 while the rest come from various cities in West Java and outside West
Java such as Majalengka, Cicalengka, Soreang, Ciwidey, Cirebon, Depok, Bekasi, Madiun, Purworejo, and Padang.
Labors used in the business
60
The labor force used in the production process of the respondents business were as follows, of the 109 respondents of the creative industries
of fashion products made from textiles, most of the respondents use local labor with percentage of 88, while the respondents who use local labor
and mixed- Each 1 and 10 of respondents still hesitantly answered the question.
From the above data it can be seen that the majority of the labor used in the business of the respondents is the local workforce. This shows the
process of procurement of Human Resources used in most businesses of the respondents still entrust to the local workforce and can improve the
welfare of local residents who become employees.
The sufficient of the current local workforce in the production activities
The sufficiency of local workforce used in the business process of respondents business, of the 109 respondents of creative industries
business of fashion products made from textile, most of the respondents simply use local workforce with percentage of 53 while the respondents
who do not use local labor About 33 and 14 of respondents still hesitantly answered the question.
From the results it can be interpreted that the majority of respondents sufficient in using local labor. This shows the process of procurement of
Human Resources used in most businesses of the respondents still entrust to the local workforce and can improve the welfare of local residents who
become employees.
The sources of labor used in the business
The source of labor used in production process of respondents business were as follows, of the 109 respondents of creative industries of fashion
products made from textiles, most of the respondents use labor that comes from their own business area with percentage of 87 while
respondents who use labor coming from outside the region only about 4 and 9 of respondents Still hesitant answering questions.
The results of the study shows that the majority of manpower resources used in the business of the respondents is from the region itself. This
shows the process of procurement of Human Resources used in most businesses of the respondents still entrust to the local workforce and can
improve the welfare of local residents who become employees.
61
The rate of the wages are given.
The wages given to the workforce by the respondents were as follows, of the 109 respondents of the creative industries business of fashion products
made from textiles, most of the respondents pay employees who come from families under 50 thousand per day with a percentage of 70 while
the respondents who pay employees over 50 thousand per day and comes from outside only about 2 And 15 of respondents still hesitated
answering questions.
It can be interpreted from the results of the study that the majority of wages given by the respondents in their business is below 50 thousand per
day and come from the family. This shows that the process of maintaining Human Resources has been run by most of the respondents and should be
supported by other maintenance processes such as giving incentives to employees who can work on the target set.
The sufficiency and availability of the raw materials to support the grow of the business.
The availability of raw materials in the areas of origin of the respondents, of 109 respondents business players creative industries fashion products
made from textiles, most of the raw materials used by respondents in the business comes from the region itself with a percentage of 79 while raw
materials originating from outside the region Only about 16 and 5 of respondents still hesitantly answered the question.
The results show that the majority of respondents feel the area of origin is sufficient in providing raw materials needed in his business. This can
facilitate the process of managing raw materials, as raw materials coming from their own regions will accelerate the production process and reduce
the cost of production expenditure.
The constraints faced in getting the raw materials
The process of obtaining raw materials faced by respondents were as follows, of 109 respondents business players creative industries fashion
products made from textiles, most of the constraints of respondents is the high raw material prices with a percentage of 44 while other constraints
faced by respondents about 4 And 5 of respondents are still hesitant to answer questions.
62
It can be can be seen that the majority of obstacles faced by respondents in getting raw materials is the price of high raw materials. This can
decrease the profitability of raw material availability in the area of origin that should be able to reduce production costs, so that decisions are
needed in efficient management of processes so that the benefits can still be obtained and production costs can still be suppressed.
The price of raw materials for one time production process
The raw material prices borne by the respondents were as follows, from 109 respondents of creative industries of fashion products made from
textiles, most of the respondents bear raw material price between 1-3 million with percentage of 40 while the respondents who bear raw
material price below 1 million About 14 and 9 of respondents still hesitated answering questions.
From the data above can be seen that the majority of raw material prices in one production is borne by the respondents is between 1-3 million. This
shows that the expenditures spent by most of the respondents for raw materials are not too high but still felt too expensive by most respondents,
so it can be solved with the decision in efficient process management so that production costs can still be suppressed.
The prices of the raw material used in the production.
The raw material price conditions used by respondents were as follows, of the 109 respondents who are creative industries of textile fashion
products, most of the respondents use raw materials equivalent to their ability with percentage of 50 while the respondents who use cheap raw
materials compared to local raw materials only about 5 and 12 of respondents are still hesitantly answering questions.
From the data above it can be seen that the majority of raw material price conditions used by the respondents is commensurate with the ability of
business actors. This shows the raw material constraints that the price is felt high enough could still be covered by the respondents, so that in order
to achieve optimal benefits needed decisions in efficient management of the process.
The current selling price of the product
The selling price of the products set by the respondents were as follows, of the 109 respondents of the creative industries business of fashion products
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made from textiles, most of the respondents sell their products cheaper than similar products with a percentage of 39 while the respondents who
sell their products more expensive than the price in other cities only about 5 and 10 of respondents still Hesitantly answering questions.
From the data above can be seen that the majority of the selling price of products pegged by the respondents is cheaper than similar products. This
shows that the product can be more competitive with similar products which are more expensive but must be supported by quality management
so that product quality can be maintained and get customer loyalty.
The implementation of the production process
The production process conducted by the respondents were as follows, of the 109 respondents who are creative industries of fashion products made
from textiles, most respondents use traditional process handmade in production process with percentage of 51 while respondents using
modern process only about 6 and 6 are still hesitant to answer questions.
The results of the study show that the majority of the production process undertaken by the respondents is a traditional homemade process. This
shows that the decision of effective production process management by most respondents is in the traditional way, it is used to reduce production
cost and to achieve optimal profit.
The adequacy of the current production site
Frequency of production place capacity used by the respondents, from 109 respondents business actor of creative industry of fashion product made
from textile ,, most of respondent feel the capacity of production place is not enough with percentage equal to 36 whereas respondent who feel
the capacity of production place is only 7 And 6 of respondents still hesitated answering questions.
From the data above it can be seen that the majority of production place capacity used by the respondents mash less adequate. This indicates that
the decision of capacity design conducted by the respondents is still low, so there is an improvement in the decision in order to support the decision in
efficient management of the process.
Obstacles faced by SMEs from location of the current activity
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The business location constraints faced by respondents were as follows, of the 109 respondents who are creative industries of textile products, most
of the respondents constraints are the location of business from the center of the crowd with a percentage of 28, while the difficulty of the
location of business accessed by public transportation is only about 7 and 18 of respondents are still in doubt Answer the question.
It can be interpreted that the majority of business location constraints faced by the respondents is the remote location of business from the
center of the crowd. This shows the constraints in the process of distributing the product and may disrupt the marketing process of the
product.
The condition of the location of current activity
The business location provides advantages for the business owner, of the 109 respondents of the creative industries business of fashion products
made from textiles, most of the respondents business location is close to raw material suppliers with percentage of 29 and 10 of respondents are
still hesitant to answer questions.
From the above data it can be seen that the location advantage of the business owned by the respondents is close to the raw material suppliers.
This shows the advantages in supply chain management because it facilitates the respondents in the procurement of raw materials also in
suppressing the cost of production, so it needs to be supported by effective production process management in order to achieve optimal
profit.
CONCLUSIONS
Based on the results of the study, it can be submitted suggestions for the future related to the implementation of business functions and dynamic
capabilities of the fashion business actor in West Java. The suggestions submitted are:
1 Strengthening HR functions of business actors of SMEs in particular: • Provision of training to workers coming from the regions of business
actors. This is because the majority of research results majority of 88 of the labor used is derived from local labor. Business entrepreneurs need to
consider using the workforce from outside the region that can provide
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innovation in the competence of business actors. The results of the study also indicate that the source of labor used in the business of fashion
product players shows 87 of the region itself. Suggestions for current and future development are to enhance the prestigious image of working in the
creative industry, so as to provide better jobs.
2. Strengthening the function of production operation of business actors in particular:
• Increasing the quality of raw materials used. This is to strengthen the availability of raw materials in areas where business actors do business,
because the results showed 79 come from their own region.
• Businesspeople need to collaborate with various stakeholders such as manufacturers as raw material suppliers, in order to get a low price. It is
suggested to do because the result of the research shows the obstacle faced to get the raw material was 44 stated because of high raw material
product price.
• The results of research indicate that the condition of raw material price used is proportional to the ability of business actors 50 means that
business actors still entrust to the use of raw materials today. It should be considered to look for more competitive alternative raw materials to make
product prices more competitive.
• The results of research for the use of technology in the production process undertaken in the business of creative industry players shows for
those who still use the traditional process handmade 51. Business actors should maintain this, because it can be a source of excellence
developing industry competitiveness. The market still has an interest in products that still use traditional approaches especially handmade
REFERENCES
Al-Najjar, B and Al-Najjar, D, 2017., The impact of external financing on firm value and a corporate governance index: SME evidence,
Journal of Small Business and Enterprise Development, Vol. 24 Issue: 2, pp.411-423
Buletin Statistik Perdagangan Luar Negeri, Foreign Trade Statistical Bulletin, EksporEksport, Katalog 8202019, pp. x, Badan Pusat Statistik BPS-
Statistics Indonesia, ;publication number 06110.1711
66
Dart, J., Ng, I., Sarkar, A. 1990. A Comparative Analysis of Managerial Practices
among SMEs
from Malaysia,
Singapore, and
Thailand. ASEAN Economic Bulletin, Vol 7, Iss 1, 84-95. Hadood, MY; , Jones,P and Newbery, R., Export promotion
programmes and SMEs’ performance: Exploring the network promotion role, Journal of Small Business and Enterprises
Development, Vol 24, Iss, 1, pp.68-87.
Rufaidah, P., 2014, Manajemen Strategik, Publisher Humaniora, 1
st
edition , 3
rd
printed revision edition, Bandung.
67
THE EFFECTS OF SOCIO-ECONOMIC FACTORS ON HOUSING PRICE IN INDONESIA
Fery Agustianto feryagustiantoyahoo.co.id
1,3
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Ternate, Province of North
Maluku
Muhammad Andriyadi
andriyadi_90yahoo.com
2,3 2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Province of Maluku
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose
This research aims to see the effects of socio-economic factors to the housing prices in some areas of major cities in Indonesia.
Design methodology approach This research uses econometric analysis approach with panel data that
combines time series data and cross section by copying and modifying the model of existing research, for the time series data, the researchers will
observe the data in the last 5 years which consider to represents the change of housing prices in seven big cities in Indonesia Jakarta, Surabaya,
Medan, Bandung, Makassar, Balikpapan, Palembang, with the dependent variable house price index and the independent variables Socio-economic
factors. Expected Finding
This research is expected to find extent of socio-economic factors can affect the change in housing prices in seven major cities in Indonesia. This
research is also expected to assess the city which has the biggest price changes in the last 5 years.
Practical implication The results of this research can be used as information for the actors in
housing market both consumers as the buyers and developers as the manufacturers, and can be used as a reference for determining investment
68
in housing. It also can be used as literature in determining government policy on the provision of houses for the public sector.
OriginalityValue This research investigates socio-economic impact on the changes in
housing prices in Indonesia. There have been several studies on the housing prices in Indonesia but the research about impact of
socioeconomic on housing prices in Indonesia is very rare. Keywords: Housing Price, Socio-economic, Panel Data Analysis, Time series
and Cross Section, Biggest city In Indonesia.
69
RESEARCH BACKGROUND
The purpose of this research is investigating the influence of socio- economic to the price changes of housing in Indonesia by using sample at
seven major cities Jakarta, Bandung, Surabaya, Medan, Palembang, Balikpapan and Makassar. The socio-economic factors in this research are
represented by number of population, number of male population, male reproductive age, marital status, unemployment, income per capita and
level of crime. While the housing price will be represented by residential property price index IHPR. It is expected that socio-economic factors lead
to positive effect to the housing price in Indonesia. The researchers focus on the demand sides that influence housing price in
Indonesia. Housing demand is highly correlated to the number of population in the region which describes housing needs. The house is not
only occupied by just one person, but one family, and usually heads of households are responsible to meet this need. According to the research of
Wei-Shong Lin, Jen-Chun Tou, Shu-Yi Lin and Ming-Yih Yeh: 2014, population, gender, race, marital status affect house price. Therefore,
higher rate of total population, male population, white race population, crime rate and marital status, the higher price of the house while other
factors such as income is considered constant. While in other researches mentioned that there is close relation between
housing price with household income I-Chun Tsai and Chien-Wen Peng: 2012. In some cases particularly in developing countries, the growth of
household income is not able to pursue the increase in housing prices Case and Shiller : 2003. It also occurs in Indonesia in the last 5 years in
which income per capita has increased with the average 3-4 http:data.worldbank.org while the increase in housing prices for the
last 5 years is in the average of 7-8 http: www.bi.go.id. To get an overview in housing price changes, the researchers use the
residential price index that resulted from residential property price surveys conducted by Bank Indonesia in 14 cities in Indonesia. In general, house
price index measures the average or median price of houses sold in a particular period Marcelo Bianconi, Joe A. Yoshino: 2013 as told by Le
Ma and Chunlu Liu : 2009 House price indexes HPI usually used to describe the changes in house prices. The values of index indicate the
70
house price movements in certain countries or cities rather than house price levels.
There are many approaches to analyze the increase in housing price, but according to I-Chun Tsai and Chien-Wen Peng: 2010 it is recommended to
use panel data as it can provide detailed information on existing data and can fix flaws in using individual time series method. And according to Le
Ma and Liu Chunlu: 2009 regression panel data can be adopted to estimate simple model.
LITERATURE REVIEW Demand or supply side effect
House is a durable goods, it does not move and has high transaction value Wei-Shong Lin, Jen-Chun Tou, Shu-Yi Lin and Ming-Yih Yeh: 2014. In
addition,currently, house can also be used as a promising investment tool because the annual price rise especially in developing regions such as
Jakarta and other major cities in Indonesia. There are many factors that can affect price including house price. In
accordance with the principle of economy, price can be influenced from two sides both in terms of demand and supply. According to Sergio
Clavijo, Michel Janna, Santiago Muñoz: 2005 the influencing factors from the demand side that strongly affect the price of housing include:
disposable income, new house price and housing mortgage loaninterest rates and supply input price of raw materials, and profit gained by the
manufacturer. According to research results John M. Kagochi and Lesley M. Mace: 2009 population and increased in existing house sales will
increase housing demand, while rise in the interest rates and unemployment will reduce the level of housing demand.
Most of the previous studies concerned on the demand side, as the supply side has been limited by the availability of land.While in supply side we can
also observe other inputs such as the price of building, expected profit, as well as the number of housing developers.
Demand can be classified into two major factors that affect the price of housing.Individual characteristics factor of the house and other factors
71
which may affect price of housing market. Other factors include socio- economic and demographic.
Individual characteristics vs Socio-economic factor The researches on housing prices usually focused on individual house
characteristics, including age, house size, land size, raw materials, number of rooms, number of bathrooms, garage size, and land size, as well as
environmental features, such as city amenities Haurin and Brasington, 1996; Kain and Quigley, 1970; Kane et al., 2006; Kim et al., 2003 in Wei-
Shong Lin, Jen-Chun Tou, Shu-Yi Lin and Ming-Yih Yeh: 2014. While researches in Indonesia Raden A Rahadi, Sudarso K Wiryono and Deddy P
Koesrindartoto, Indra B Syamwil: 2014 investigated housing price in Jakarta
and surrounding
areas with
a focus
on individual
characteristicfactors by using the variables: façade, Infrastructure, ROW, rooftop design, product specification, floor plan layout and overall physical
qualities.
While the researches focused on other factors which may affect the market price of housing is conducted by Wei-Shong Lin, Jen-Chun Tou,
Shu-Yi Lin and Ming-Yih Yeh: 2014, Craig A. Gallet: 2004, I-Chun Tsai and Chien-Wen Peng: 2010. Three researchers of the above used the variables
of population, male, married status, crime rate, unemployment rate, income, race white or black, that we can categorize as socio-economic
factors. Growth in population has become a problem in some areas as well as
creating opportunities for housing developers to take advantage on the rise in house price over time Raden Aswin Rahadi, Sudarso Kaderi Wiryono
and Deddy Priatmodjo Koesrindartoto, Indra Budiman Syamwil: 2014. Not only the population growth, but household income is also an
important factor in the change in house price. The house customer must have enough wealth and income to pay the costs incurred from either
house purchase in cash or loans, as the changes in wealth and domestic income cause variations of affordable house prices I-Chun Tsai and Chien-
Wen Peng: 2010. Previous researches on Housing Price
Author
Title Variable
72
Wei-Shong Lin, Jen- Chun Tou, Shu-Yi
Lin and Ming-Yih Yeh : 2014
Effects of socioeconomic
factors on regional housing
prices in the USA
Dependent variable : Median housing prices
Independent variable :
-
Population
-
Male
-
Elder
-
White
-
Asian
-
Married
-
Gdppc
-
Unemp
-
Pcrime
-
Air
-
Rent_income Craig A. Gallet :
2004 Housing market
segmentation: An application
of convergence tests to Los Angeles region
housing Dependent variable: Median
home price Independent variable :
-
Per capital income
-
Unemployment rate-
-
Per pupil spending
-
FBI crime index
-
Percentage white
-
Population density
I-Chun Tsai Chien-Wen Peng :
2010 A panel data analysis
for housing affordability
in Taiwan Dependent variable: house
prices Independent variable:
income
DONALD R. HAURIN
DAVID BRASINGTON :
School Quality and Real House Prices:
Inter- and Intrametropolitan
Dependent variable : Real House Prices
Independent variable :
-
Distance to CBD
73
1996 Effects
-
Property tax rate
-
Real income
-
Crime rate
-
population growth rate
-
accessibility index
-
Nonwhite households This research takes several variables used in the previous research
especially the variables that represent the social economy condition in Indonesia. Research conducted by Wei-Shong Lin; Jen-Chun Tou; Shu-Yi,
Lin; Ming-Yih Yeh: 2014 is chosen as the main reference, but some changes is needed for the variables to be suitable in Indonesia. The
variables in this research include population, income, married couple, unemployment, crime rate, and income per capita.
In Indonesia, one of the main sources of income is salary or wage. Higher the salary or wage received by a person, more confident to buy house
either by credit or cash. Where larger the income per capita so that higher the people’s ability to buy a product. The increase will also affect the price
of product in accordance with the principle of economy that is higher the demand, higher the price offered. This principle also applies in housing
price, higher the income per capita, higher the peoples ability to buy house that eventually increase the demand in housing result in the
increase in house price. It corresponds with the statement by Reichert 1990 “Permanent income represents the long-term housing purchasing
power of an area because the option to buy a house is determined by the consumers’ long-term consumption habits and income. Moreover, an
increase in permanent income in an area denotes an increase of housing prices”. Conversely, when more people are unemployed, then it will affect
their income, decrease in housing purchase and unable to buy house or pay housing mortgage loan.
Demand for housing mostly come from married couple and the buyer is the husband or male party. In Indonesia, if someone got married, the need
to own a house will be even greater. The need can arise from within themselves as well as the insistence from the family. By gender, the
greatest demand coming from men. In Indonesia, there is a sort of unwritten rule that a man should have a house to shelter his family, the
74
existence of house besides as a residing place, it will also raise social status and responsibility role of male. An unmarried man who already had a
house is considered to be respectable. Comfort and safety is one of the determining factors in the decision to buy
a house in a specific area. A city with a high crime rate will decrease the housing demand, which in turn will negatively affect house price.
RESEARCH METHODS Data collection and measures
Data sample is taken from seven major cities in Indonesia which experiencing significantchanges in housing pricein the period 2011 - 2015
5 years: Jakarta, Surabaya, Medan, Bandung, Makassar, Balikpapan, Palembang. The data of price change obtained using residential property
price index from the survey on the price of residential property by Bank Indonesia, a survey conducted quarterly on the developers of residential
projects in 14 cities. Data collection conducted directly which include selling price, built units, and sold units. This survey involved 15
representatives of Bank Indonesian in each city. While data on the number of population, the number of male population, married couples,
unemployment, per capita income was obtained from the Indonesia Central Bureau of Statistics and crime rate is obtained from the Operations
Control Bureau, Indonesian Police Headquarter.
Variable Definition
Source Dependent variable
IHPR Residential property price
index representing price change with base year 2002
Indonesian Central Bank
Independent Variable
Population Number of population in a
specific area in a certain period of year.
Indonesia Central Bureau of
Statistics Male
Number of male population in a specific area in a certain
period of year. Indonesia Central
Bureau of Statistics
75
Married Number of married
population in a specific area in a certain period of year.
Indonesia Central Bureau of
Statistics Unemployment
Unemployment rate in a specific area in a certain
period of year. Indonesia Central
Bureau of Statistics
Personal Income Per capita income in a
specific area in a certain period of year.
Indonesia Central Bureau of
Statistics Tingkat Kejahatan
Crime rate reported to the police in a specific area in a
certain period of year. Operations
Control Bureau, Indonesian Police
Headquarter.
Model This research uses quantitative analysis performed using Panel Data
Regression Model by adopting and modifying the model of research Wei- Shong Lin, Jen-Chun Tou, Shu-Yi Lin and Ming-Yih Yeh: 2014, which
measured the impact of socioeconomic to housing prices in the US. The previous research used the variables: racewhite and black or Asia, and air
condition. In this research, different variables are used, thus by combining the data of seven major cities in Indonesia in a specific time period. The
specifications of the model used in this research is as follows:
IHPR =
+ POP
+ Male
+ Married
+ Unemp
+ PI
+ Crime
+ Notes:
= Residential Property Price Index in city i year- t = log value of Population Number in city i year- t
= log value of Male Population Number in city i year- t = log value of Married Population Number in city i year- t
Unemp = log value of Unemployment in city i year- t
PI = log value of per capita income in city i year- t
Crime = log value of Crime Rate in city i year- t
= error termin province i period t There are two methods used in estimating regression equation with panel
data: Fixed Effect and Random Effect.
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1. Fixed effect The premise that every individual has each own observation characteristic,
then this model allows inconstant intercept for each individual. But this model has short comings where not generated a general estimation
general estimates because there is no general intercept or constant to represent the whole individual.
2. Random Effect In Fixed Effect, the differences between individuals is represented by
intercept or constanta, but inRandom Effectsuch differences are accommodated by error terms of each individual. This method has the
advantage of eliminating heterogeneity. The determination of the use of FEM or REM in panel data regression is
obtained from rule of thumb coined by Judge et al Gujarati: 2009, then reinforced by a formal test using Hausman Test.
RESEARCH RESULTS EXPECTATION, LIMITATION AND ORIGINALITY Research results expectation
This study is conducted to examine the relationship of social economy to the fluctuations of housing prices in Indonesia by taking samples in seven
major cities in Indonesia. The study is expected to produce the magnitude of the influence of social economy to the fluctuations in housing price in
Indonesia in general, and in sample cities that in particular. Also, analyzing the cause of housing price differences in big cities in Indonesia reviewed
from social economy factor. Limitation
This study is limited on the fluctuations in housing prices caused by demand side, that is social economy factor. In describing the
socioeconomic factor, the researchers use the variables: population, male population, married couple, unemployment, income per capita and crime
rate, while other factors that may affect fluctuations in house price considered as constant ceteris paribus.
Originality
77
Most of the researchers who investigated the fluctuations of house prices viewed from individual characteristic of house e.g. land area, number of
rooms, number of floors, access to the city center, design, etc., and only few of them who observe the fluctuations in house price affected by socio-
economic factors especially in Indonesia. This research is also expected to give an overview of the structure of social economic influence model to the
fluctuations of house price in Indonesia, so it can be a reference for housing developers in determining investment, and the government to
establish policy on housing.
REFERENCES
Case KE, Shiller R 2003 Is there a bubble in the housing market? Brookings Pap Econ Act 2 pp : 299–342.
Clavivo, Sergio. Vanna, Michel and Munoz, Santiago. 2005 “The Housing Market in Columbia Socio-Economic and Financial Determinants”,
Inter-American Development Bank -Research Department Working Papers ; 522
Gallet A. Craig 2004 “Housing market segmentation: An application of convergence tests to Los Angeles region housing” the annals of
regional science Vol.38 pp : 551–561. Gujarati, Damodar N. dan Porter, Dawn C. 2009. Basic Econometrics, fifth
Edition. Boston : The McGraw-Hill. Haurin R. Donald Brasington David 1996 “School Quality and Real
House Prices: Inter- and Intrametropolitan Effects” Journal of Housing Economics Vol 5, pp : 351–368.
Kagochi, M. John, and Mace, M. Lesley. 2009 “The determinants of demand for single family housing in Alabama urbanized areas” ,
International Journal of Housing Markets and Analysis, Vol. 2 No. 2, pp. 132-144.
Le Ma and Liu Chunlu 2013 “A panel error correction approach to explore spatial correlation patterns of the dominant housing market in
Australian capital cities” International Journal of Housing Markets and Analysis Vol. 6 No. 4, 2013 pp. 405-421.
Rahadi A Raden, Wiryono K Sudarso, Koesrindartoto P Deddy and Syamwil B Indra, 2015 “Factors influencing the price of housing in
Indonesia” International Journal of Housing Markets and Analysis Vol. 8 No. 2, pp. 169-188.
78
Reichert,A.K. 1990 “The impact of interest rates, income, and employment upon regional housing prices”, Journal of Real Estate
Finance Economics and Statistics, Vol.49 No.2, pp. 246-257. Tsai, I-Chun and Peng, Chien-Wen. 2012 “A panel data analysis for
housing affordability in Taiwan” Journal of Economics and Finance Vol.36 No.2, pp. 335-350.
Wei-Shong Lin, Jen-Chun Tou, Shu-Yi Lin and Ming-Yih Yeh. 2014 “Effects of socio-economic factors on regional housing prices in the USA” ,
International Journal of Housing Markets and Analysis Vol. 7 No. 1, pp. 30-41.
79
ANALYSIS OF VALUE-ADDED INTELLECTUAL CAPITAL INFLUENCE ON CORPORATE FINANCIAL PERFORMANCE: STUDY OF PUBLIC-LISTING
COMPANIES ON THE INDONESIA STOCK EXCHANGE
Dahlia Mulyasanti dahlia4869gmail.com
1,2 1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Jakarta
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
ABSTRACT Purpose
The purpose of this research is to analyze the influence of value-added intellectual capital on corporate financial performance. This study also
attempts to identify the components of intellectual capital that may have partial influence on corporate financial performance. The study will see
evidence from the companies on the Indonesia Stock Exchange DesignMethodologyApproach
This research is designed as a quantitative research. The measurement of intellectual capital will use the VAIC Value-Added Intellectual Capital
method, as proposed by Pulic 2000. Corporate financial performance is measured by three financial ratios. They are market value, return on assets
ROA, and return on equity ROE. Multiple linear regression model will be constructed to examine the relationships between intellectual capital and
the selected financial performance measurements mentioned above. The scope of this research include the analysis of partial influence of
intellectual capital components separately on corporate financial performance and the analysis of influence of intellectual capital itself as a
whole on corporate financial performance. This research uses data from all companies listed on the Indonesia Stock Exchange from 2010 to 2015, not
including banking sector, mining sector, and state-owned companies. The companies selected as sample are the ones that present the components
of intellectual capital on their annual reports. Expected Findings
The hypothesis developed in this research is that intellectual capital has significant influence to improve corporate financial performance.
Therefore, the expected result of this research is that intellectual capital is
80
an inseparable part of the company that play an important role to encourage improvement in corporate financial performance.
Practical Implications This research will expose extensive analysis coverage about the
contribution of intellectual capital components to encourage improvement in corporate financial performance. This analysis is expected to help
investors in their investment decision making. On the other hand, from companies perspective, this research will serve as a wake up call to
encourage them about the importance of intellectual capital existence. OriginalityValue
This research not only contributes to the knowledge of intellectual capital research, but also adds value to the existing literature of intellectual capital
components in relation to corporate financial performance. This research is spesifically done in Indonesia. Therefore, it clearly gives a brief description
about intellectual capital progress based on Indonesian corporate point of view. Although the research on intellectual capital performance has been
done in many years, this research gives the newest and updated research result from the last five year data.
Keywords: Value-Added Intellectual Capital, Corporate Performance, Profitability, Market Value, Return on Assets ROA, Return on Equity ROE
81
RESEARCH BACKGROUND
The business model that dominates today’s economy is based on the use of intangible resources of which value for the firm is in many cases much
greater than the value of tangible assets. These intangible resources, that constitute the concept of intellectual capital have to be effectively
managed in order to offer companies a source of competitive advantage Cohen and Kaimenakis, 2007:241.
There has been a paradigm shift to the new economy, or the knowledge- based economy, which relies more on information technology, skill and
knowledge from employees rather than tangible assets. This has encouraged many companies to be concerned about their intellectual
capital Muhammad Ismail 2009 in Feimianti and Anantadjaya 2014:99.
The concern priority on intellectual capital existence by many companies is approximately integrated into their policies. The awareness is practically
influenced by modern structure of industries, where combination area exists inside one company. Nowadays, there are less boundaries between
manufacture and service territory among industries. Essentially, manufacture industries have service components inside them, such as
after-sales service, customer care service, etc. Furthermore, service industries have their own manufacture components, as they produced
commodity to support the service process.
The activities explained above are generally integrated by companies into an assemblage of information system. The system needs to be harmonized
in order to accomplish corporate objectives. The achievement of corporate objective fulfillment has significant effort to increase corporate
competitiveness. In pursuance of this achievement, companies need to manage their vital resources. From this perspective, intellectual capital is
considered as material resource because it strengthens companies’ competencies to improve their performance.
The advent of knowledge in economy has increased the strategic relevance of intellectual capital, definable as the dynamic and firm-specific system of
knowledge-based resources and activities Kianto 2007; Giuliani 2009; Meritum 2002; Veltri 2011 in Veltri and Bronzetti 2014: 305. In
82
management literature, intellectual capital is considered the key driver of competitive advantage of the third millennium enterprise firm Reed, et al.
2006; Martı´n-de-Castro, et al. 2011; Marzo 2014 in Veltri and Bronzetti 2014:305. Consequently, measuring, managing and reporting
intellectual capital have become critical issues Veltri and Bronzetti, 2014; p.305.
Amongst all the models of intellectual capital measurement that are formed until today, intellectual capital is tried to be defined as having
three dimensions which have similar characteristics Bontis, et al. 1999; Stewart 1997 in Bozbura 2004:357. Those characteristics are identified
as intellectual capital components, namely human capital, structural capital, and relational capital.
Many firms invest on staff education, research and development, customer relations, administrative and computer systems, and etc. Such investments
called intellectual capital are growing and even exceeding financial and physical investments. This
change in investment structure has been attributed to knowledge. The main source of value creation is intellectual capital in modern economy
Zeghal, D, Maaloul 2010 in Gogajeh, et al. 2013:13.
Corporates nowadays have more concern in their development and expansion prospects in the future. Therefore, the core business conducted
is not only about increasing their profit, but also maintaining the stability of business process systems. Knowledge aspect gets more crucial
attention, as it is useful for companies to develop innovative ideas that assure their performance to keep on a good track.
The aim of this paper is to conduct critical analysis about the influence of value-added intellectual capital on corporate financial performance. This
study also attempts to identify intellectual capital components that may have partial influence on corporate financial performance. In this paper,
intellectual capital will be measured by VAIC Value-Added Intellectual Capital method, as proposed by Pulic 2000. The research is designed to
see evidence about how deep intellectual capital can significantly affect corporate financial performance using multiple regression model.
Corporate financial performance is proxied by market value, return on assets ROA, and return on equity ROE. The data used in this paper will
83
be collected from companies listed on the Indonesia Stock Exchange from year 2010 to 2015 that present intellectual capital components on their
annual report.
The rest of the paper is organized as follows : Section II gives a brief description of literature review. Section III presents the research methods.
At last, Section IV is the statement of research purpose, limitation, and originality.
LITERATURE REVIEW THE CONCEPT OF INTELLECTUAL CAPITAL
The definition of intellectual capital can be seen from many perspectives. Generally, it can be concluded that intellectual capital definition
mentioned one important component, that is knowledge. Therefore, basically, many researchers agreed that intellectual capital is defined as an
asset of which existence initially started with the development of knowledge inside the company.
Khanhossini, et al. 2013 in Feimianti and Anantadjaya 2014:100 stated that Intellectual Capital is the intangible value in the company that is
created by human resources through their skills, knowledge, innovation, motivation, in accordance with company’s resources to increase
profitability and value creation for the company. Moreover, Papula and Volna 2011 in Holienka and Pilkova 2014:262 proclaimed that the
essence of intellectual capital is the value creation that can be understood as a complex of intangible property, knowledge, skills, processes, applied
experience and technologies used in organizations to ensure a competitive advantage on the market.
Several perspectives on intellectual capital have been put forward by scholars during last two decades. For example, Edvinsson and Malone
1997 in Asiaei and Jusoh 2015:669 offered one of the seminal definitions within the intellectual capital literature Kim et al., 2012;
Petrash, 1996; Yang and Lin, 2009 in Asiaei dan Jusoh 2015:669. From their viewpoint, intellectual capital falls into three components, namely
human capital, structural organizational capital, and relational customer capital.
84
Intellectual Capital consists of three types of elements: Human Capital, Structural Organizational Capital, and Social Customer Capital. Human
Capital is the basic resource of organization that encompasses knowledge, motivation, innovation and competencies to support business performance
and solve any problems exist in organization. On the other hand, Structural Organizational Capital is the company resource that will optimize
employee’s performance, such as Information Technology, policies and procedures, and control in the company. Lastly, Social Customer Capital is
business relationship between company and external parties for instance suppliers, clients, partners, banks, government, and other parties or
institutions. Charles Adelman 2010; Khanhossini, Nikoonesbati, Kheire, Moazez 2013 in Feimianti and Anantadjaya 2014:100.
Intellectual capital is commonly classified as intangible asset. Therefore, intellectual capital has its own measurement methods. Even though
intellectual capital is not easy to be measured, it can be valued by using value added measurement in order to make it more visible Feimianti and
Anantadjaya, 2014:101. Value added is a measurement that reflects employee’s and management’s contribution to value creation. In addition,
value added is used to lead to wealth creation of the company Pulic 2008 in Feimianti and Anantadjaya 2014:101.
THE INFLUENCE OF VALUE-ADDED INTELLECTUAL CAPITAL ON CORPORATE FINANCIAL PERFORMANCE
According to Pike 2007:529, intellectual capital can have a significant impact on value creation and the value of the firm. One argument is that
intellectual capital offers valuable protection during economic downturns through patents, brands, customer relationships, flexibility and
inventiveness, enabling the firm to be more competitive than low- intellectual capital firms. This argument encouraged researchers that
performance measurements are no longer depends on accounting point of view, such as liquidity and solvability ratios. Pike 2007:530 applied
Management Accounting Practice as one of dependent variable. However, the results stated that the corporate management are not commonly
convinced. They still put their faith on financial measurements as performance indicators. This fact is consistent with Indonesian corporates’
point of view, where mostly financial performance is measured by financial ratios.
85
Huang and Wang 2008 conducted a research to investigated the relationship between intellectual capital and market value. They added
research development RD expenditure on their model. RD variable is considered as supporting component to encourage the improvement of
intangible assets. As the results declared, Huang and Wang 2008:730 concluded that in order to value corporates accurately, the investors
should consider both intellectual capital and financial capital reported in financial statements.
It is important that beside the awareness of intellectual capital existence, the comparison research should look after previous research conducted in
Asian region. Here, Chan 2009 conducted a research to investigate the impact of intellectual capital on corporate financial perfomance. He took
samples from companies listed on the Hang Seng Index of the Hong Kong Stock Exchange. He also used Return on Assets ROA and Return of Equity
ROE as dependent variables. The results described that intellectual capital significantly influenced profitability measured by ROA. However, it did
not have significant influence on ROE.
Another point of view is presented by Gogajeh et, al. 2015. They conducted a research to analyze the influence of intellectual capital on
corporate performance. The samples were taken from corporates listed on the Tehran Stock Exchange with year of sample from 2006 to 2011. His
settled samples implied that it is very important to get at least five years observations in order to easily generalize the conclusion. This research also
used ROA and ROE as dependent variables. The results declared that intellectual capital had positive significant influence on corporate
performance. Corporates listed on the Tehran Stock Exchange commonly focused their attention on human capital development. Therefore, human
capital showed greater degree of correlation. In the contrary, Tehran corporates paid less attention to structural capital. Therefore, it didn’t
have significant influence on corporate performance.
Meanwhile, Feimianti and Anantadjaya 2014 concerned that intellectual capital research in Indonesia is urgently needed in the presence of Asean
Free Trade Area AFTA. AFTA agreement allowed the members to exchange resources within themselves easily without any boundaries of
regulation difficulties. This implied the requirement of highly skillfull
86
human resources. Therefore, they conducted the research to investigate Indonesian consumer goods industry, mostly on their readiness to manage
their performance.
Feimianti and Anantadjaya 2014 chose consumer goods industry because they assumed that consumer goods industry’s growth will significantly
increase for the future. They used accounting-based measurements and market valuation as dependent variables. There are seven dependent
variables used, namely Debt Ratio, Return on Equity ROE, Net Working Capital to Total Assets, Asset Turnover, Earnings Per Share EPS, Market-
to-Book Ratio MB Ratio, and Price-Earnings Ratio PE Ratio. The results described that intellectual capital had positive correlation with both
accounting value and market value. Human capital was counted as the most significant component on Value-Added Intellectual Capital VAIC
valuation. Therefore, they suggested that companies should put priorities to employee’s productivity improvement.
Intellectual capital has already been researched by many scientists using various dependent variables, mostly accounting ratios. As explained above,
most scientists agreed that intellectual capital has significant influence on corporate financial performance. Despite the influence are mostly or
leastly significant, those results proved that intellectual capital is already considered by many countries as crucial aspect on corporate performance
improvement.
As explained above, the presence of Asean Free Trade Area AFTA forced many corporates in Indonesia to adjust their asset management policy.
They began to consider intellectual capital as one of important asset components. However, this awareness is in need of wide scope of
research. Therefore, this research is conducted in order to build more awareness of intellectual capital importance, especially in Indonesia. It is a
common knowledgeable fact in Indonesia that companies work in a very intense competitive environment to assure their investors that their
business are profitable for a long time. Consequently, Indonesian companies are in urgent need of clearly described references about the
nowadays intellectual capital correlation with corporate financial performance.
87
Although many research have already been conducted to investigate intellectual capital and corporate performance, including in Indonesia,
there are still few research conducted using data from the last five years. This research is conducted to fill in the gap for the last five years. It is very
important to get the latest data, more precisely transform it into the latest information. That way, the research conducted won’t go away wasted
somewhere else. Instead, it will serve as a useful reference that has realistically practical implications.
MEASUREMENT OF VALUE-ADDED INTELLECTUAL CAPITAL Intellectual capital, as many other assets, has its own measurement.
Mostly, scientists classified intellectual capital measurement into several methods. They are Market Capitalization Method MCM, Direct
Intellectual Capital method DIC, Scorecard Method SC, Return on Assets method ROA, Economic Value-Added approach, and Austrian approach or
commonly known as Value-Added Intellectual Capital method VAIC Chan, 2009; Shamsudin and Yian, 2013.
Value-Added Intellectual Capital VAIC method is one of the measurements that is applied by most scientists. They admitted that VAIC
is easy, simple, and provides a basis for standard measurement. Moreover, data needed for VAIC calculation can be easily obtained from corporate
audited financial statements Feimianti and Anantadjaya, 2014:101. This paper uses VAIC method as well, to easily measure intellectual capital
based on the data provided by financial statements.
VARIABLE MEASUREMENT The analysis on this paper relies on two variables. They are dependent
variables Y and independent variables X. Independent variables X in this research are proxied by intellectual capital, measured by Value-Added
Intellectual Capital method. Components of intellectual capital, namely human capital, structural capital, and relational capital, are measured
separately. Dependent variables Y in this research are proxied by financial performance measurements, shown by market value, Return on Assets
ROA, and Return on Equity ROE.
Definition and measurement of all variables in this research are shown in Table 2 below.
88
Table 2 Definition and Measurement of Variables
Variables Definitions
Indicators
Value-Added Capital
Employed VACA X1
VACA is a parameter for value-added created by
one unit of physical capital. This ratio shows
the
amount of
contribution from every unit on capital employed
towards the
organization’s value-
added. Equity
= Long Term Liabilities
=
Value-Added Human
Capital VAHU X2
VAHU is a ratio that shows the amount of
contribution from every rupiah
invested on
Human Capital towards the organization’s value-
added. Salaries
= Training
= Structural
Capital Value-Added
STVA X3 STVA is an indicator that
measures the amount of structural
capital needed to earn 1 rupiah
from value-added. This ratio
serves as
an indication
for the
success of
structural capital in value-created
process. Patent
= Technology
=
Relational Capital RC
X4 RC is a ratio that shows
the amount
of contribution from every
rupiah invested
on Relational
Capital towards
the organization’s
value- added.
AD =
Return on ROA is a ratio that
89
Assets ROA Y1
shows the amount of every rupiah on total
assets able to generate net income.
ROA =
Return on Equity ROE
Y2 ROE is a ratio that shows
the amount of every rupiah on total equity
able to generate net income.
ROE =
Market Value MV
Y3 A
corporate value
obtained from
comparation of
corporate market price and its book value. For
more accurate purpose, this research will use
PER ratio. PER =
RESEARCH METHODS
This research is classified as quantitative research. The type of this research is descriptive and verificative. Nazir 2005 in Desvianti 2015:51,
defined descriptive as a method used in examining a group of people, a certain circumstance, a systematic mindset, or a classified event at a
certain time. The purpose of descriptive method is to create a systematically accurate and briefly clear description on facts, nature, and
relationship in between phenomenon investigated. This research’s objects are companies listed on the Indonesia Stock Exchange for five years from
2010 to 2015 that present the components of intellectual capital on their annual reports.
This research is also classified as verificative research because the data processing and analysis processes are conducted to investigate the
influence of Value-Added Intellectual Capital on corporate financial performance. Data processing and analysis will be conducted using
multiple linear regression method.
90
The framework of thinking in this research is illustrated in the following diagram.
Hypotheses proposed for this research are as follows : H
1
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC partially have positive significant influence on market value.
H
2
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC simultaneously have positive significant influence on market value.
H
3
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC partially have positive significant influence on Return on Assets ROA.
H
4
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC
91
simultaneously have positive significant influence on Return on Assets ROA.
H
5
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC partially have positive significant influence on Return on Equity ROE.
H
6
: Value-Added Capital Employed VACA, Value-Added Human Capital
VAHU, Structural Capital Value Added STVA, and Relational Capital RC simultaneously have positive significant influence on Return on Equity
ROE. The research’s models to examine all hypotheses are described as follows:
PER
= α + βVACA + βVAHU + βSTVA + εi 1
ROA = α + βVACA + βVAHU + βSTVA + εi
2 ROE
= α + βVACA + βVAHU + βSTVA + εi 3
Sources of Data and Data Collection Techniques This research is conducted by using secondary data. Secondary data is
a kind of data collected indirectly from other sources meaning that it is catalogued and verified by reliable sources. The secondary data needed
for this research are collected from ICMD Indonesian Capital Market Directory and companies’ annual reports for year 2010-2015 listed on the
Indonesia Stock Exchange. Aside from all that, data resources are obtained from review of related literatures, such as the study of previous research,
textbooks, and other sources of supporting data.
As explained above, the data needed for this research are collected from ICMD Indonesian Capital Market Directory and companies’ annual
reports for year 2010-2015 listed on the Indonesia Stock Exchange. The sampling method applied is purposive sampling method. The samples
chosen for this research must fit a few requirements as follows : 1. Companies chosen as samples must publish annual reports at the
Indonesia Stock Exchange for year 2010-2015. 2. Companies should disclose salary expense, training expense, patent
expense, and technology expense on their financial statements. 3. Companies declared net profit for year 2010-2015.
92
4. Companies chosen are not included companies on banking sector, mining sector, and state-owned companies.
RESEARCH PURPOSE, LIMITATION, AND ORIGINALITY
The purpose of this research proposal is to analyze the influence of value-added intellectual capital on corporate financial performance. This
study also attempts to identify intellectual capital components that may have partial influence on corporate financial performance. The study will
see evidence from the companies on the Indonesia Stock Exchange.
The scope of this research includes analysis of partial influence of intellectual capital components separately on corporate financial
performance and analysis of influence of intellectual capital itself as a whole on corporate financial performance. The indicators of corporate
financial performance are measured by market value, Return on Assets, and Return on Equity. Therefore, for future research, it is suggested to take
other measurement indicators of corporate financial performance in order to expand the scope in understanding the importance of intellectual
capital’s existence.
This research only aims the companies listed on the Indonesia Stock Exchange that present the components of intellectual capital on their
annual reports. This research not only contributes to the knowledge of intellectual capital research, but also adds value to the existing literature of
intellectual capital components in relation to corporate financial performance. This analysis is expected to help investors in their investment
decision making. On the other hand, from companies perspective, this research will serve as a wake up call to encourage them about the
importance of intellectual capital existence. This research is spesifically done in Indonesia. Therefore, it clearly gives a brief description about
intellectual capital progress based on Indonesia’s corporate point of view.
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POTENTIAL DETERMINATION OF THE PROPERTY TAX THROUGH ANALYSIS ASSESSMENT OF THE AGRICULTURAL LAND IN THE DISTRICT OF BLORA
Mokhamad Surianto
suriantomokhamad22gmail.com
1,2
1
Head of Planning And Finance, at Land National Agency, Riau Islands Kepulauan Riau, Ministry of Agrarian and Spatial Planning
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose
The aim of this study was to determine the factors that affect the agricultural land value in the District of Blora and potential of the property
tax that still be able to be collected. Design Methodology Approach
This research method is quantitative method by analysis method that used to determine how much the independent variables factors that affect the
value of agricultural land affect the dependent variable the value of agricultural land is a method of multiple regression analysis. This study
examined six 6 variables, namely Accessibility X1, Productivity Land X2, The Kind of The Land X3, the Topography of The Land X4, the distance of
the land from the settlement X5 and the Availability of Irrigation X6 as the independent variables on Agricultural Land Values Y as the dependent
variable. As for determining how much revenue of potential of property tax PBB that still be accepted by the Assessment Ratio analysis method,
namely by analyzing the ratio between the agricultural land value with a Tax Object Sale Value NJOP as determined by the Department of Regional
Income. Expected Findings
Hypothesis testing is to be conducted in this study is to explain the relationship between the independent variables which covers Accessibility
X1, Productivity Land X2, The Kind of The Land X3, The Topography of The Land X4, The distance of the land from the settlement X5 and The
Availability of Irrigation X6 with the dependent variable, namely the agricultural land Values Y and to determine how much revenue of
potential of property tax PBB that still be accepted by analyzing the ratio
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between the value of agricultural land with a Tax Object Sale Value NJOP set by the local Department of Regional Revenue.
Practical Implications The practical implication of this study is to provide information and
feedback on the performance of land assessment in the establishment of NJOP. This study can be used as an evaluation of the determination of the
NJOP as well as consideration for the improvement of the determination of the NJOP especially agricultural land di District of Blora for Blora Regency
Government. Originality Value
This study will present how many factors that affect the agricultural land value through multiple regression analysis. Through multiple regressions
analysis will be obtained mathematical formula to be used to calculate the value of agricultural land. Furthermore, by comparing the agricultural land
value with a Tax Object Sale Value NJOP will be acquired potential revenues of Property Tax PBB that still be able to be accepted.
Keywords: NJOP, PBB, Agricultural Land Value, Multiple Regressions, Assessment Ratio
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RESEARCH BACKGROUND
Taxes are one source of state revenue that is essential for the implementation and improvement of national development. The role of
taxation in a country can be regarded as the lifeblood of the base material and lifeblood for the state and the wheel power. So it can be theorized, if
the base material, and the lifeblood of this tax can run smoothly both in terms of budgeting and spending, will create a prosperous country.
According Guritno Mangkoesoebroto 1994, Overall state revenue comes from taxes derived from the seven 7 types of taxes, The Income Tax
PPh, The Value Added Tax PPN and The Value Added Tax of Luxury Goods PPnBM, The Import Duty, The Excise, The Export tax, The Property
Tax PBB and the tax on Acquisition of Land and Building BPHTB and other types of taxes. Of the seven types of taxes above that contributed
significantly to the reception for local government is Property Tax PBB.
Property Tax is a levy imposed on the person or entity that obviously has the right, own, dominate and benefit of the land and building Waluyo,
2011: 135. Or in other words, the property tax levied on land and buildings for their profits and or socio-economic position is better for a person who
has a right to it or benefit from it. The Object of Property Tax is land and or buildings. This Property Tax object is an object tax of realtive because
the amount or extent of land and or building has never diminished even number of buildings likely to continue growing in line with economic and
population growth and also the object of the property tax can not be hidden. Sell value of object of the property tax, as the tax base, never
decreased. The object of property tax that large and evenly into one of the dominant type of other tax for each region Sutawijaya, 2004: 65-78.
Since the enactment of Law No. 28 of 2009 on Regional Taxes and Levies, that no later than January 1, 2014, The Property Tax of Sector Rural and
Urban Areas PBB-P2 was transferred pengelolaanyaa to the Local Government District City, while the sector of Plantation, Forestry, and
Mines PBB-P3 remains a central tax. It is a follow-up of regional autonomy policy and fiscal decentralization and a turning point in the
management of property tax in both the Rural and Urban. PBB-P2 is directed to explore and strengthen the potential of local revenue source
that is stable and reliable to finance regional development. Stable in the sense of acceptance of the results relative fluctuations are not so high, and
reliable as the property tax contribution in the Regional Budget APBD,
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particularly the regional budget for the District and the City that relatively large. The property tax could potentially meet the demands of these goals
Sutawijaya, 2004: 65-78.
By transfer PBB-P2 to local government, then the activities of the data collection process, assessment, determination, the administration,
collection billing and service of the property tax is organized by the Local Government District City. One of the activities that must continue to do
is to evaluate the determination determination of the Tax Object Sale Value NJOP. The evaluation was conducted in order to perfection NJOP as
the bases of the property tax because if determination of NJOP is less good and right will have an impact on the property tax.
NJOP is the average price obtained from the sale and purchase transactions that occur naturally, and when there are no sale and purchase
transactions, NJOP determined through a price comparison with other similar objects or new acquisition value, or the Tax Object Sell Value of
Substitute. Circular letter of the Director of the PBB and BPHTB number 09 PJ.6 2003 April 1, 2003 on the Application of Tax Object Sell Value is
equal to the Market Value, stated that the rate of Assessment Sales Ratio between NJOP and Market Value is at least 80 percent. Assessment ratio or
rate comparison between the value used as the bases of the property tax with its market value. In some countries like the United States, Canada,
and Australia, study on Assessment ratio is already a routine activity undertaken to measure the degree of uniformity and fairness imposition of
property tax. Research study on ratio analysis can also be used as a control tool of the determination NJOP land and building Hayati and Nugroho,
2006: 2-3.
Based on the Minister of Finance Regulation No. 150 PMK.03 2010 on Classification and Designation of Tax Object Sell Value As Base of Property
Tax, the object of PBB-P2 among others, agricultural areas, housing, offices, shops, industries as well as special objects in urban areas.
Agricultural land that is part of the PBB also has Sell Value. The sale value or the value of agricultural land is influenced by several factors. According
Acil 1976 in Karaci and Oguz 2010: 1 states that the factors that affect the value of agricultural land is divided into three categories: first, Soil
Physical Factors include the fertility of soil, topography, climate, soil locations and others. Second, Economic Factors include income from the
land, the value of the currency, demand and supply of land, land rental
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rates, the price of agricultural products, and so forth. Third, Social factors include the social, environmental, technological level, the number of
population density and so forth.
In his research in Eregli, Konya, Karaci and Oguz 2010 found that the distance from the location of the farm to the city is the most important
factor affecting the value of agricultural land among the nine factors that analyzed. Nor has the Harjanto and Rianto 1999: 31-39, which researched
about the affect of location factors accessibility toward the land value, indicate that the value of land is affected by variables such as distance to
the city center, wide roads, the distance to the university, and conditions asphalt road or not. Meanwhile, according to Voltr 2011 through his
research in the Republic of Cezka mention that the value of agricultural land depending on the production function of land soil productivity.
Mangkoesoebroto 1992: 55-69, research about the affect of the tax on the price of land. His research shows that in the long term, demand for
land continues to grow due to various factors, such as population growth, the increase in peoples incomes, and changing tastes. So naturally the
price of land will have a tendency to rise because the existence of the land that is not proportional to the demand for land, unless there are external
factors that cause environmental conditions become unfavorable.
If land prices tend to rise then it is also supposed to affect the NJOP including NJOP farmland that have set. However, unlike NJOP in Blora,
based on statements from officials in charge of asset management and finance at the Government of Blora City indicates that the data NJOP
mainly the agricultural land in Blora, pointed indicated still below market value Under Valued, and even the level of assessment sales ratio is still
below 80 percent Under Assessment which is a minimum requirement www.blorakab.go.id. It is also supported by an initial survey conducted by
the authors also showing that NJOP of agricultural land in Blora City especially in District of Blora still below market value.
According to Statistics Central Agency BPS, the Blora City has an area of agricultural land amounting to approximately 39.64 of the total area of
182,058.797 ha territory. The area of agricultural land consist of a wetland of 4599.3 ha 25,26 and moor 2618.8 ha 14, 38 BPS, 2016: 9. By a
territory area so large, mainly of agricultural land area, of course, will have an impact on the property tax, means that increasingly wide of object that
can be worn property tax then revenue of the property tax will increasingly
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grow. If NJOP that be set still below the market value of the land, then there is
the potential revenue of property tax that can still be levied. According to BPS data, the property tax contributed significantly to Regional Revenue
PAD of the regional tax sector. By 2015 the number of property tax admission approximately 8.2 billion rupiah, or by 26 of 31.5 billion in
total local tax revenue. When compared with the total revenue of PAD is by 4.8 from 169.2 billion rupiah BPS, 2016: 359-351. So, if NJOP
established in accordance with the actual market value then revenue of the property tax in Blora also will increase which in turn will affect the
development in Blora.
LITERATUR REVIEW
Property Tax Property Tax is a tax that is material and the amount of tax payable is
determined by the state of the object, that is the land and building and a state of the subject who pays did not participate in determining of the tax
Erly Suandy, 2005: 61. Meanwhile, according Waluyo 2011: 135, the property tax is a levy imposed on the person or entity that obviously has
the right, own, dominate and benefit from land and buildings or in other words, the property tax is levied on land and buildings for their profits and
or position socioeconomic better for the person or entity who has a right to it or benefit from it.
The Property Tax is one of the oldest tax imposed in Indonesia. After Indonesias independence, land tax landrent, which has existed since the
Dutch colonial era, was renamed Pajak Bumi Land Tax. In 1959, Pajak Bumi Land Tax return renamed to Pajak Hasil Bumi Land Results Tax
based on Law No. 11 Prp of 1959. At that time, the tax object that be levied is no longer of land values, but rather the result from the land. In line with
the provision of local autonomy and decentralization to local governments, Pajak Hasil Bumi Land Results Tax is then converted into Iuran
Pembangunan Daerah IPEDA Contribution of Regional Development, where the results were submitted to the local government although it is
still a central tax. In 1983, the government conducted tax reform for the first time, and resulted in one of Law No. 12 of 1985 on Property Tax PBB
and started to become effective from January 1, 1986 Hadi Sasana, 2005: 37.
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However, since the enactment of Law No. 28 of 2009 on Regional Taxes and Levies, Property Tax of Sector Rural and Urban Areas PBB-P2
transferred its management to the Local Government District City, while the sector of Plantation , Forestry and Mining PBB-P3 remains a central
tax. It is a follow-up policy of regional autonomy and fiscal decentralization and a turning point in the management of property tax in both the Rural
and Urban. PBB-P2 is directed to explore and strengthen the potential of local revenue source that is stable and reliable to finance regional
development. Therefore, now the property tax is the regional tax that a very large contribution to development in the region.
As in Indonesia, according to David L. Cameron 1999, The Property Tax is also a major source of income for the region or city in the United States.
Likewise Cesare 1997 which states that the property tax is considered as one of the most important choices to increase local government revenues
in Brazil, in order to support the path of public service. Therefore, Bird R.M in Slack 2010 defines that the property tax is a local tax because there are
of the relationship public services provided by local government that adds to the value of the land and buildings.
Based on Law No. 12 of 1994 article 2 paragraph 1, which became the object of property tax is the land and the buildings. The Land is the earths
surface and the body of the earth beneath. The earths surface consist of land and the sea and inland waters of Indonesia. The building is a
construction technique that is planted or permanently attached to the land and or water. Which is the subject of tax is the person or entity that
obviously has a right to the land, and or possess, control, and or obtain benefit from the building. proof of payment settlement of tax is not a
proof of ownership of land and buildings. The Subject of Taxes imposed obligation to pay tax is called The Taxpayer based on the Act of Property
Tax.
Bases of property tax is the tax object sell value NJOP. According to Law No. 12 of 1994, states that the bases of property tax is the tax object sell
value NJOP. the tax object sell value NJOP is the average price obtained from the sale and purchase transactions that occur naturally, and if there is
no sale and purchase transactions fairly, NJOP determined through a price comparison with other objects similar or acquisition value of new, or the
tax object sell value of substitute. A price comparison with other similar objects, is an approach method of determining the tax object sell value by
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comparing it with other similar tax objects are adjacent and the same function and the selling price have been known.
The new acquisition value is an approach or method of determining the tax value of the sale of an object by calculating all the costs incurred to acquire
the object at the time of the assessment, which is reduced by depreciation based on the physical condition of the object. The sale value replacement,
is an approach or method of determining the tax object sell value based on production output tax object. Existence of NJOP not only as the basis for
calculating the imposition of the property tax, but it can also be used for other purposes. NJOP the bases of the United Nations. Magnitude NJOP
determined by the classification or the classification of the average value of land sales in the form of land and or buildings. Based on Law No. 12 of
1985 an explanation of paragraph 2, the factors that need to be considered in determining the classification of the land is the location, allocation,
utilization, environmental conditions, etc.
Land Value, Market Value and Land Price Land is a resource that provides space to support all the needs of living
creatures to continue to grow. According to Dadan Darmawan 2009: 15, the land has three properties, which are not affected by the time factor,
the physical asset number is not increasing, and long- term investment for storing wealth. With the physical properties of soil that is not increasing
then its availability very limited, while the demand for land has a tendency to continue to increase from year to year, both for housing, agriculture,
industry and so forth, it is this which requires the development of a theoretical value of the land.
Definition of land value varies depending on the context and the purpose and point of view. According Supriyanto in Astuti 2004, the land value is a
measurement based on the ability of land economically in relation to productivity and economic strategy. This is also consistent with the
understanding of the land value by Sujarto in Marindi Yusni B. 2005 that the land value is a manifestation of the ability of the soil with respect to
the utilization and use of land, where the determination of the land value can not be separated from the overall value of the land where the land is
located. Similarly, according to Suryanto in Ernawati 2005, the land value is the embodiment of capacity in terms of utilization and use of land as an
illustration, where the land price is one reflection of the value of land and is often used as an index for the value of land. The notions of the land
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value above is the strength of the value of land that can be exchanged with other goods. For example, land with low productivity such as the badlands
relatively lesser value due to limitations in its use. While the market value of land is defined as the price measured in terms of money desired by the
seller and the buyer Shenkel in Sutawijaya, 2004: 68.
According to Claudia M. De Cesare 1997: 2 through research entitled An Empirical Analysis of a Property Tax System: A Case Study from Brazil
suggests that the market value of property is the most likely price in terms of money that the property will be sold on the market competitive and
open, with the assumption that the seller and the buyer to act carefully and know as well without specific stimuli. The property in question here
including land. So the market value essentially reflects the best price on a property at a time, place and circumstances or specific market conditions
desired by the seller and the buyer. This is in line with the definition of value according to Eckert 1990: 151-180 which states that the value is a
time describing the price or value of money from property, goods or services for buyers and sellers. And also according to Indonesian Appraisal
Standards Drafting Team, the value is an economic concept that refers to the financial relationship between the goods and services available to be
bought and for those who buy and sell 2002: 27.
From some sense it can be concluded that the land value is the size of the lands ability to produce or manufacture something directly provide
economic benefits. In the context of the property market, land value is equal to the land price or the price of the transaction which is the result of
an agreement between the seller and the buyer based on consideration of the needs and abilities of sellers and buyers are not based on
considerations of the state of the land. If the market price of land is high then the value of the land is too high and vice versa.
The Demand and Supply of Land Land in an economic standpoint, the land would have an influence on the
assumption that the information provided complete for each person, and the exchange can be done freely without coercion from various parties,
usefulness or satisfaction derived from the land will be equal to the comparison with other wealth, related to the law of economics, scarcity
determines the price of the commodity Sadyohutomo: 2008. In other words, the land has economic power where the land value or the land
price depends on supply and demand of land. According Guritno in
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Fitriyanto 2011: 18 argues that in the short term is very inelastic deals, because the land area can not be increased quickly and dramatically. As
with Dadan Darmawan 2009: 15 which states that the land has physical properties that number is not increasing. This means that the price of land
in a specific area will depend on demand factors, such as population density and growth rate, the level of employment and income levels, as
well as the capacity of the transport system and interest rates Eckert, 1990: 151-180.
According to the theory of microeconomics, land prices will be higher due to the availability of land that fixed and limited while demand is increasing
as a result of population growth, economic growth and investment that require land and others.
Figure 2.1 shows that the interaction of supply and demand determine the price of land. The supply curve s in the form of a straight vertical line
indicates that the quantity of land remains, meaning that regardless of the price of land, land area which be offered will fixed unchanged. The
demand curve d move from d0 to d1, then the price of land will increase from p0 to p1. If the demand for land increases, the price of land will
increase, while supply remains.
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Agricultural Land Assessment and Factors Affecting Land is an indispensable component of the farm and have a more
prominent role in the agricultural sector compared to other sectors as a place where agricultural production is done. Characteristics of farm land is
always moving show the need to make an assessment of the value of agricultural land. Assessment of land is a process to provide an estimate
and opinion on a property land and buildings, based on the facts that can be received, obtained from research in the field and conduct investigations
and audits Hidayati and Harjanto, 2003. In addition, Assessment of land depends on the production function of soil and additional connections
given by environmental equirements, by the evaluation of public goods or by the requirements for formation a fair tax policy and even by the
interests of landowners Voltr, 2011. According to Eckert 1990 in Astuti 2014: II-14, discloses that in the assessment of land there are four 4
principles of land valuation, namely supply and demand supply and demand, the use of the highest and best highest and the best use ,
productivity gains surplus productivity, as well as the principle of change and anticipation change and anticipation. From the explanations above
regarding land assessment, the agricultural land assessment is the process of providing the estimates and opinions on farmland through field
research, investigations and inspections depending on the production function and the local environment for the benefit of the public and
landowners. In the assessment of land known as the method of assessment approaches.
As referred to in article 1, paragraph 3 of Law No. 12 of 1985, as amended by Law No. 12 of 1994 on Property Tax, then in the assessment of the
property includes three land assessment approaches. First, the market price comparison approach method sales Comparation approach,that is
an approach to the assessment that carried out by comparing among the property to be assessed with the properties that have been known its
characteristics and values. Further analysis was done by measuring the level of the similarities and differences to determine some adjustment to
be given toward the property to be assessed. Second, the cost approach method is typically used to assess a building. Cost approach method is a
process of assessment by means of identification of a building, and then it is analyzed by the cost of making new reproduction cost new, based on
the standard price prevailing at the time of assessment and subsequently depreciated. And third, the income approach method income approach is
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a method of assessment by basing on the level of profit that may be generated by a property at this time and in the future, subsequently it is
capitalized to convert the income stream in the value of the property.
The agricultural land assessment can be carried out according to various methods depending on the destination. However, the appropriate method
for the assessment of agricultural land is through two methods of approach, that is the sales comparation approach method and the income
approach method because activities on the agricultural land rarely use the building. In Turkey, the agricultural land assessment was conducted using
the income approach method because local government regulations Zuhal Karakayaci and Cennet Oguz, 2010. In conducting the assessment, it is
necessary to consider the factors that affect land value when determining the value of agricultural land. Many factors could affect the value of
agricultural land.
Aleksandar Majstorovic, Dragon Dukic, Mihajlo Zogovic 2013: 5-11 in his research entitled An Agricultural Land Value Assessment Model suggests
that the factors that affect the value of agricultural land is divided into three 3 categories: political factors, market factors and natural factors.
While Sklenicka, in Klara Popelkova 2013 states that the factors that affect the value of agricultural land is not only a factor of agronomy but
also economic, social, and demographic. Another case Tsoodle 2003 in Deborah Bridges 2007: 17 -27 who see that the value of agricultural land
is determined or influenced by several components, that is components of a productive, speculative and consumptive while land prices are
determined by transactional components.
However, according Acil, 1976 in Zuhal Karakayaci and Cennet Oguz 2010, generally factors that affect the value of agricultural land is divided into
three 3 categories: First, Physical Factors Soil covering the fertility of the soil, topography, climate, location of the land and so forth, Second,
Economic Factors include income from the land, the value of the currency, demand and supply of land, land rental rates, the price of agricultural
products, and so forth, and Third, Social Factors include the social, environmental, technological level, the number of population density and
so forth. On the agricultural land, when the assessment carried out by the method of income, net income from the land and the capitalization rate in
the region should be calculated. While according Mulayim Gunes, 1986 in Zuhal Karakayaci and Cennet Oguz 2010, factors that affect the value of
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agricultural land is divided into two 2 categories: factors that affect the amount of revenues and expenses and the factors that affect the level of
capitalization.
The climatic conditions in the area of agricultural land affect the revenue to be obtained. In addition, natural disasters such as floods, erosion, and
earthquakes can cause a decrease in productivity and increase costs to keep the land thus affecting revenue. The distance from the ground to the
market and to the city center, and road conditions affect the cost. Landform and land productivity is one of the factors that affect net income
Zuhal Karakayaci and Cennet Oguz 2010. So, from some of the above opinion, the factors that affect the value of agricultural land consist of the
physical factors, economic factors, social factors, political factors and nature factors where agricultural land is located.
Previous Research Relevant Similar research has been conducted by several researchers with the
almost same research, there are some studies relating to the value of land, like table 1 below.
Table 1. The List of Previous Research Relevant
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From the opinions and the results of the above studies as well as preliminary surveys that have been conducted at the site, the factors that
affect the value of land that will be examined in this research include six 6 variables, that is Accessibility, Productivity, Soil Classes, Topography,
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Distance to The settlements and the availability of irrigation canals on the location of the agricultural land is located.
Hypothesis The hypothesis is defined as the estimated logically between the variables
used in the form of a statement that can be tested. The hypothesis of this research is examination toward the relationship between the variable of
agricultural land value with the factors that affect it, namely:
b. Anticipated, distance to the road affect negatively on the agricultural land value, it means getting away from the road then the
agricultural land value will be decline; c. Anticipated, the productivity affect positively on the agricultural land
value, it means getting higher the productivity of agricultural land then the agricultural land value will be increases;
d. Anticipated, the soil classes affect positively on the agricultural land value, it means more fertile of the agricultural land then the
agricultural land value will be increases; e. Anticipated, the topography affect negatively on the agricultural land
value, it means more tilt of the agricultural land then the agricultural land value will be decline;
f. Anticipated, distance to settlements affect negatively on the agricultural land value, it means getting away from the settlements then the
agricultural land value will be decline; g. Anticipated, the availability of irrigation canals affect negatively on the
agricultural land value, it means getting away from the irrigation canals then the agricultural land value will be decline;
h. Anticipated, there is potential of property tax of agricultural land that still be able to collected. RESEARCH METHODS
Types of Research The method used in this study using quantitative research methods.
According to Punch 1988 the quantitative research method is an empirical study where the data in the form of something that can be
counted number. The quantitative research is concerned with the collection and analysis of data in numerical form. The quantitative research
methods have characteristics associated with numerical data and is
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objective. Facts or phenomena which are observed to have an objective reality that can be measured. Research variables can be identified and
intercorrelation variables can be measured.
Method Of Collecting Data Collecting data using sampling techniques aiming purposive sampling
means sampling intentionally because there are goals and considerations that can represent the population at the sites. The type of data collected in
the form of quantitative data which is the primary data and secondary data. Primary data was collected by direct observation in research objects
that derived from the results of field surveys and interviews with buyers sellers, agent broker housing and local villages. Secondary data, in the
form of NJOP that obtained directly from Government Office of Blora City, geographic data and demographic data obtained from the Central Statistics
Agency, and transaction data of land and buildings that acquired from the report of Land Title Registrar PPAT and from the local village government.
Data Analysis Method Selection of Research Variable
The variables in this study consisted of two, namely: i. Independent Variables Predictor The independent variables that will
be examined in this study consisted of 6 six variables. Its been based on some of the opinions, the results of previous research
and preliminary surveys have been conducted at the site, these variables are:
a. Accessibility
b. Productivity
c. The Kind of The Land
d. Topography
e. The Distance of the land from the settlement
f. The Availability of Irrigation
j. Dependent Variable The dependent variable in this study is The Agricultural Land Value.
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Table.2 Measurement Method of Variable
Validity Test Test the validity of the data was conducted to test the accuracy of the
questions used in an instrument in the measurement variable. The questionnaire considered valid if the questions on the questionnaire were
able to reveal something that will be measured by the questionnaire itself Imam Ghozali, 2006. The formula used is:
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Information: r : Regression n : Number of samples studied k. x : X Variables factors that affect the agricultural land value
l. y : Y Variable The Agricultural Land Value Reliability Test
Reliability test is a tool to measure a questionnaire which is an indicator of a variable or construct. A questionnaire said to be reliable or reliable if
someone answers the statement is consistent or stable over time. Reliability concerning the consistency of the answers if tested repeatedly in
different samples. SPSS provides the facility to measure reliability with statistical test of Cronbach Alpha . A construct or a variable value said to
be reliable if the Cronbach Alpha 0.60 Imam Ghozali, 2005: 41-42. The formula used to measure the reliability is using Alpha formula, as follows:
Information : α = Alpha cronbach’s coefficient σi = Varian item in question σ = Total variance item in question k = Number of the item in
question
Multiple Regression Analysis Multiple analysis methods were used to analyze the factors that affect the
agricultural land value. Multiple Linear Regression analysis was used to measure the effect of more than one predictor variable independent
variable on the dependent variable. In this study the independent variable is the agricultural land value Y while the dependent variable is the
Accessibility X1, Land Productivity X2, The Kind of The Land X3, Topography X4, Distance to Settlement X5 and The Availability Of
Irrigation X6. The functional form of the regression model:
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Assessment Sales Ratio Analysis Assessment Sales Ratio analysis in this study is used to determine how
much potential tax revenue from land and building that still be able to levied by comparing NJOP A to the agricultural land value S obtained
through multiple regression analysis. This was done to prove the hypothesis the assessment sales ratio in the study site. Analysis tools to
test hypotheses include:
The Assessment Level Test This test is used to determine whether there are differences between SVTO
farmland with its market value. In accordance with SE-09 PJ.06 2003 mentioned that the standard assessment sales ratio set by the government
is 80 mathematically, the calculation method as follows:
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Measurement Of Central Tendency This measurement is intended to determine whether the sample
assessment sales ratio at the agricultural land value is below or above the average assessment value of sales through the comparison between
the mean and the median. Mean Arithmetic Mean
Mean is the sum Assessment Ratio in the total number of observations. By calculation as follows:
Median Middle Value The median is the central value of a frequency distribution. Such amounts
it is a central value in relation to its central position in a distribution. ARmed = 0.5 n + 0.5
Weight Mean This is the weighted arithmetic average of the observations, in this case the
total value of NJOP divided by The Agricultural Land Value of the whole sample object of observation. And the way it is calculated:
Furthermore, from the central tendency is analyzed and as essentially refers to the standard ratio IAAO, where the level of assessment sales ratio
for all object types of taxes in a region should be in 10, and the level of
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the desired ratio of between 90 to 110. If it does not meet, then it can be considered performance appraisal is not accurate, so the determination
NJOP not achieve uniformity unjust.
RESEARCH PURPOSE, LIMITATION AND ORIGINALITY This study aims to determine how much the independent variables namely
the factors that affect the agricultural land value, that is covering Accessibility X1, Productivity Land X2, The Kind of The Land X3, The
Topography of The Land X4, The distance of the land from the settlement X5 and The Availability of Irrigation X6 affect the dependent variable,
namely the agricultural land Values Y which will be obtained by mathematical models that can be used to calculate the actual value of
agricultural land. In addition, this study aims to determine how much potential of Property Tax that still be able to accepted in the District of
Blora by comparing the agricultural land value with NJOP have set.
Limitations of this study are the factors that affect the agricultural land value in this study consists of six variables, namely Accessibility X1,
Productivity Land X2, The Kind of The Land X3, The Topography of The Land X4, The distance of the land from the settlement X5 and The
Availability of Irrigation X6, while there are many other factors that affect the value of agricultural land. There are limitations in the study using a
questionnaire that sometimes the answers respondents do not reflect the truth.
REFERENCES
A, Sushanty Wita, “Analisis Assessment Sales Ratio Antara Nilai Jual Objek Pajak Dengan Harga Jual Tanah Dan Bangunan”, Skripsi, Universitas
Brawijaya Malang, Malang, 2007. Adrian Sutawijaya, ”Analisis Faktor-Faktor Yang Mempengaruhi Nilai Tanah
Sebagai Dasar Penilaian Nilai Jual Obyek Pajak NJOP PBB Di Kota Semarang”, Jurnal Ekonomi Pembangunan, Universitas Terbuka,
Semarang, 2004.
Alexandar Majstorovic, Dragon Dukic, Mihajlo Zogofic, “An Agricultural, Land Value Assesment Model”, Union Nikola Tesla University,
Belgrade, Republic Serbia, 2013. Aris Fitriyanto, ”Analisis Faktor-Faktor Yang Mempengaruhi Nilai Tanah di
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THE ANALYSIS OF ASSET MANAGEMENT TO THE QUALITY OF FINANCIAL STATEMENTS OF THE GOVERNMENT A CASE STUDY OF TUAL, MALUKU
Taufik Irawan pakelnatoregmail.com
1,3
1
Controller at the Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Pontianak, Province of
West Kalimantan
Temmy Pratama temmy.surbaktigmail.com
2,3
2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Province of Maluku
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose This study aims to analyze how asset management is implicated on the
quality of financial statements of the government, especially to provide an understanding of how asset legal audit assessment, asset inventory, asset
valuation, asset optimization, asset monitoring and control can improve the quality of financial statements of the local government.
Design methodology approach This research will use descriptive and analytic methods, which involve four
data collection techniques – interview, document analysis, questionnaire and observation. To collect the data, the authors undertook a case study in
the municipal government of Tual, Maluku in Indonesia. Data were acquired from official and publicly available documents and interviews
with key figures who involved in administrating and organizing assets and also those who prepared financial statements.
Expected Finding This study will provide information about a number of problems in
implementing asset management in the municipal government and provide the critical success factors for asset management related to asset
legal audit assessment, asset inventory, asset valuation, asset monitoring and control which implicate on the quality of financial statements. It will
help the local government to improve asset management system and the quality of financial statements.
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Practical Implication The results of this study will have managerial implication for the local
government in managing the quality of asset management that affect the quality of the financial statements. This study will also provide practical
implication such as improving legal audit assessment, asset inventory, asset valuation, asset optimization, asset monitoring and control.
OriginalityValue The study that analyzes the influence of asset management on the quality
of financial statements of the government in Indonesia is very rare and this study is the only study that will be conducted in the municipal government
of Tual, Maluku. Keyword: Asset management, local government financial statement, legal
audit assessment, asset inventory, asset valuation, asset monitoring and control, municipal government of Tual.
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RESEARCH BACKGROUND
One of the most critical issues in public finance in Indonesia is the management of assets. This is because assets especially fixed assets have
the largest value compared to other account in financial statement of the government. Moreover, the existence of fixed assets also greatly affects
the quality of services of the government. But in reality, the government’s asset management still has many problems. It can be seen from the
number of problems related to the management of assets of the government as stated in the Audit Report of the Audit Board of the
Republic of Indonesia BPK-RI. So the authors are interested to analyze the factors in asset management that affect the quality of financial statements
of the local government in Indonesia.
Actually, asset management is needed both by public organizations and private organizations. Both of them want to achieve organizational
effectiveness and efficiency. In private sector, asset management is more focused on maximizing profits while in public sector is on optimizing public
services. According to Mardiasmo 2004: 24, the government’s asset management has an important role to ensure the decisions about the
assets which include the procurement, maintenance, operating costs and elimination that will be required to provide information on the condition of
the assets in order to answer the needs of public sector organizations projected to run optimally. The strategic goals of asset management,
among others, are the establishment of administrative conduct, to create efficiency and effectiveness on the use of assets, asset security, and
availability of accurate datainformation.
Semiannual Audit Report Summary Semester II of 2015 by BPK-RI shows that only 46.75 of the total local government financial statements in
Indonesia have got unqualified opinion, while the others can not be called proper. The report described one of the most crucial issues that caused the
exception to the fairness of the local government financial statements, namely asset statement. The problems that cause the most of financial
statements of the local governments in Indonesia to not obtain unqualified opinion are 1 The fixed assets in the balance sheet are not supported by
inventory card because the items are not reconciled and inventoried properly; 2 There are many assets that have lost but are still recorded in
the balance sheet; and 3 There are many public assets that do not have legal documents.
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As we can see, those problems are caused by weak asset management system in the local governments. Therefore, we need professional asset
manager who can develop asset management system to improve the quality of public services as well as the quality of financial statements so
that the governments assets can be organized and well-managed and contribute to the economy. Asset management system Davis, 2007 deals
with the primary functional relationships between asset management activies and other function to help organization: 1 to understand exactly
about their owned assets; 2 to know where their assets are located; 3 to know the condition of their assets; 4 to understand the design criteria of
their assets and how they are properly operated and under what conditions; 5 to develop an asset care or maintenance program that
ensures that each asset performs well; and 6 to perform all of these activities to optimize the costs of operating their assets and extend their
useful life.
In the case of the municipal government of Tual, since the establishment of this municipal government in 2008, its financial statements continue to
receive disclaimer opinion by BPK-RI. This is due to incomplete supporting data related to financial statements, including fixed assets. Finally in 2014,
the municipal government of Tual received qualified opinion for its financial statement. But still, there are many problems in it. One of the
major problems of the financial statements is the disclosure of fixed assets. The audit report number 02HPXIX.AMB012015 mentioned that the
issues related to asset management in the municipal government of Tual are as follows 1 bad management of official vehicle administration; 2 the
government’s property especially land does not have a legal document as a proof of ownership; and 3 Inventory of fixed assets has not been made.
The issues indicated that the problems in asset statement of the municipal government of Tual are administration, ownership and inventory process
of assets. Related to those problems, according to Siregar 2004: 518-519 there are five stages in the management of assets. The five stages are
inventory of assets, legal audit of assets, asset valuation, asset optimization and monitoring control of assets. If the five stages are executed properly,
they will provide great benefits for the government in improving the efficiency, effectiveness and creating added value in managing assets that
are accountable and transparent. So we can conclude that inventory of assets, legal audit of assets, asset valuation, asset optimization and
monitoring and control of assets are the critical points of asset
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management that affect the quality of financial statements of the government and those factors can be used to analyze the relationship
between asset management and the quality of financial statements of the government.
The paper is structured as follows. It begins with an introduction and background of the study. The second section discusses the literature on
public asset management in relation to the quality of financial statements of the local goverment. The third section explains the method used in this
study. Finally, it closes with the research result expectation, limitation and originality.
LITERATURE REVIEW
Adoption of Asset Management Concept in Public Sector According to Lukman and Akbar 2010, asset management concept was first created by
private industry. The application of asset management has proven to give positive results and generate significant profits for private companies.
Summerell 2005 in Hanis et al. 2010 believes in the benefit of asset management implementation such as to reduce operating cost in real
property operations, reduce vacancy rates and improve the fulfillment of lead time related to real property use optimisation; and manage value,
auditable benefits, and costs in portfolio management. The success of the private sector began to be considered by government authorities and
public corporations. Therefore the concept of asset management is being recognized as a way that can be implemented by the government in
managing their assets. But there are many problems in the adoption of asset management concept in public sector. According to Rymarzak and
Trojanowski 2012, the management of publicly-controlled property is a difficult and multidirectional area of strategic importance. This is mostly
due to: 1 the volume and the special nature of the public real properties, 2 the complexity of financial nature of public sourcing; 3 the nature of the
costs related to the current use of the assets and their proper maintenance as well as the outlays that have to be made in various investment
projects. In Indonesia, the government’s assets become big problems that have lasted a long time. One of the standards that can be used as a
measure of feasibility of the government’s asset management in Indonesia is the opinion of BPK-RI on the financial statements of the government.
Semiannual Audit Report Summary Semester II of 2015 by BPK-RI shows the audit results of the entire financial statements of the local government
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in Indonesia for fiscal year 2014 with the following details: Tabel 1 Summary of Opinion on Financial Statement of The Local
Government in Indonesia Fiscal Year 2014
Opinion Total Financial
Statement Percentage
Unqualified 252
46,75 Qualified
247 45,83
Adverse 35
6,49 Disclaimer
5 0,93
Total 539
100,00 Source : IHPS II 2015 BPK-RI
Based on the table above, it can be seen that only 46.75 of the total local government financial statements have got unqualified opinion, while the
others can not be called proper. The report mentioned one of the most crucial issues that caused the exception to the fairness of the local
government financial statements, that is asset statement. Based on the statements, it is clear that the poor quality of financial statements of the
local governments in Indonesia is due to the weak implementation of asset management especially fixed assets. According to Law No. 15 of 2006 on
Audit Board of the Republic of Indonesia, an opinion for the financial statements of the government is based on the following considerations 1
Compliance with Government Accounting Standards; 2 The effectiveness of Internal Control; 3 Compliance with laws and regulations; and 4 Full
disclosure.
According to the Government Regulation of the Republic of Indonesia No. 71 of 2014 on Government Accounting Standards, the information that
should be disclosed in the financial statements of the government relating to fixed assets are 1 The basis of assessment used to determine the
carrying value; 2 Information about depreciation method ; 3 The existence and limits of ownership of fixed assets; 4 Accounting policy for
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the capitalization of fixed assets under construction; 5 Total expenditure on fixed assets approximate beginning of the accounting period by the
number at the end of the accounting period; 6 The amount of commitments for the acquisition of fixed assets; and 7 Any other
information needed.
A study was conducted by Sukma Febrianti with the title Analysis of Effect of Administration of Fixed Assets on the Quality of Local Government
Finance Report Kubu Raya. This study uses a survey of units who involved in administrating and organizing assets and also those who prepared
financial statements in Kubu Raya, West Kalimantan as many as 100 people. The independent variables tested are bookkeeping, inventory and
report, while the dependent variable is the quality of financial statements. The results of this study indicate that the bookkeeping, inventory and
report have a simultaneous impact on the quality of the financial statements of the Government of Kubu Raya. Partially, Bookkeeeping and
report have a significant effect, while the inventory does not significantly influence the quality of financial statements. It is because the inventory is
not sufficiently accommodated by detailing factors such as clearer accounting standards and procedures for recording, so employees do not
consider inventory as a crucial factor.
Furthermore, a research was conducted by Ansari, Efrizal Syofyan with the title Influence of Regional Property Management on the Quality of
Financial Statements of the Government of Padang. This study is based on the findings of BPK-RI, stating that the management of assets in the city of
Padang on education has not been orderly thus resulting in Qualified opinion. The dependent variables in this study consist of inventory of
assets, asset valuation, legal audit and monitoring of assets. The selection of sample data uses simple random sampling method and the sampling is
done randomly based on groups Agency, Department, Office, District, and Regional Secretariat as many as 41 staff who involved in administrating
and organizing assets and also those who prepared financial statements. The statistical analysis used is multiple regression analysis. The results
show that asset inventory, valuation, legal audit and monitoring have positive and significant impacts on the quality of financial statements of
the government of Padang.
Iswahyudi Nur Zainal also has conducted research with the title The Effect of Regional Asset Management on Financial Statements of DPPKAD Bone
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Bolango Regency. The study was conducted to determine the relationship between asset management areas and the financial statements of DPPKAD
Government Local Units who prepared financial statements Bone Bolango Regency. Questionnaire data processing is done by using simple
regression analysis, the respondents are employees in the Finance Department of DPPKAD Bone Bolango Regency. The results show that asset
management areas have a significant positive effect on the financial statements of DPPKAD Bone Bolango Regency, with a determination
coefficient of 73.80.
Critical Points in the Implementation of Asset Management in Public Sector Based on AGLG 2015, asset management is defined as the process
of managing the cost of local government’s capital assets effectively. It involves analyzing the lifecycle and capacity of each asset and developing
information on maintenance requirements, service levels and new asset needs. According to A Sugiama Gima 2013: 5, asset management is a
science and an art to guide the management of assets which includes the process of asset need planning, acquisition, inventory, legal audit,
valuation, operation, maintenance, renewal, or disposal in order to transfer assets effectively and efficiently. According to Siregar 2004:518-
519, there are several stages in the management of assets, if executed properly it will provide great benefits for the government in improving the
effectiveness and efficiency of creating added value in managing assets in an orderly, accountable and transparent manner. These stages include
inventory of assets, legal audit of assets, asset valuation, asset optimization and monitoring control of assets.
From the literature, it seems that legal audit assessment of assets, asset inventory, asset valuation, asset optimization, monitoring and control of
assets are the factors related to the implementation of asset management in public sector and those factors are widely used by researchers in
Indonesia to examine asset management in public sector. In order for the result of this research to be able to be compared with the previous studies,
this study also used the same four dimensions to measure the implementation of asset management.
1. Legal audit assessment Siregar 2004: 519 explains that legal audit is the scope of asset management in the form of inventory control status
of the asset, system and procedures for the possession or transfer of assets to identify and seek solutions to legal problems and strategies
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for solving various problems of the law relating to governance or the transfer of assets. Legal issues that are commonly encountered include
weak ownership status of assets, controlled by the other party, transfer of assets that are not monitored and others.
2. AssetInventory Inventory Assesment consists of two aspects, the physical inventory and the juridical or legal. The physical aspect is
composed of shape size location volume or quantity of address types and others. Juridical aspect is the legal issue of ownership which
includes deadline for ownership and others.The process is done by conducting codification of data collection or labeling, grouping and
bookkeeping or administration in accordance with the purpose of asset management.
3. Assetvaluation Valuation is the process of measuring the value of assets owned. Usually this acitivities is done by an independent consultant.
The result of valuation can be used to determine the value of assets or information on the implementation of price for assets to be sold.
4. Assetoptimization Asset optimization is a process in asset management aimed
at optimizing
physical potential,
location, value,
quantityvolume, legal and economic values possessed by such assets. 5. Assetcontrollingandmonitoring Monitoring and control are common
problems to local government today. One effective way to improve the performance of this aspect is through the development of Asset
Management Information System. Through this information system, transparency in asset management is guaranteed, without having fear
for weak monitoring and control. Asset Management Information System accommodated the system by adding aspects of monitoring and
control, so that each of the handling of assets is clearly monitored, from the scope of handling up to who is responsible for handling it. This
aspect is expected to minimize fraud in the local government.
RESEARCH METHODS
The scope of this research is to analyze the effect of asset management on the quality of financial statements of the Government of Tual, Maluku. In
addition, this study is causative cause that aims to describe and reveal a problem, situation, and event or disclose the facts as they are more in
depth about the effect on the quality of financial statements of the Municipal Government of Tual. The population in this study are all Unit
SKPD in the Municipal Government of Tual. Every Unit is the entity responsible for the preparation of financial statements. The sample
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selection is done by using Simple Random Sampling, the sampling is done randomly based on groups Agency, Department, Office, District, and
Regional Secretariat.
Variables that will be used in this research are asset management and quality of financial statements. Asset management variable is measured by
five indicators which are legal audit assessment, inventory, valuation, optimization, and monitoring control. These indicators are according to
Siregar 2004:519. Research hypotheses are as follows :
1. Legal Audit has significant effect on the quality of financial statements of the Government of Tual.
2. Inventory has significant effect on the quality of financial statements of the Government of Tual.
3. Valuation has significant effect on the quality of financial statements of the Government of Tual.
4. Optimization has significant effect on the quality of financial statements of the Government of Tual.
5. Monitoring and control have significant effect on the quality of financial statements of the Government of Tual.
Writers will use Likert Scale with 5 point rating with the detail as below : 1 = Strongly Disagree 2 = Disagree 3 = Neutral
4 = Agree 5 = Strongly Agree Sources of Data
Data source, according to Sanusi 2011: 104, tends to point at the direction where the data originate. Based on that, the data are classified
into two categories:
a. Primary data According to Umi Narimawati 2008: 98, primary data are obtained from the first or original sources. The primary data in this
study are obtained by means of questionnaires and interviews containing questions about the variables that cover asset management
and fairness of financial statement.
b. Secondary data The secondary data are gained from a variety of references, articles, journals, scientific publications, and documentation
of the company that has to do with aset management and fairness of financial statement.
Data Analysis
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After the data from questionnaires have been acquired, writers will translate that data to know the correlation of asset management and the
quality of financial statement. We calculate respondents’ answers into average scores mean. The interpretation of the mean will follow the
interval which is mentioned in table.
Interval Category
4,2 Mean = 5,0 Strongly Agree
3,4 Mean = 4,2 Agree
2,6 Mean = 3,4 Neutral
1,8 Mean = 2,6 Disagree
1,0 Mean = 1,8 Strongly Disagree
Correlation analysis aims to identify and find the relationship between the variables that have been assigned to research to be able to measure the
characteristics of the relationship and the meaning as well as implications of the relationship, either positive + or negative -. The relationship
between the variables generate a positive or negative value to limit the relation coefficient r Person Correlation Coefficient, as shown below:
+1 for positive correlation; and -1 for negative correlation. If the correlation is worth +1 or -1, the
correlation indicated a perfect positive correlation or negative correlation, and if the correlation coefficient is zero, the variable showed no correlation
Hasan, M. Iqbal, 2002.
Reference : Sugiyono, 2005 Regression analysis is used to determine the relationship between
independent variables and dependent variable. Regression analysis is essentially to estimate the average value of one or more X variables.
Regression analysis consists of a simple linear regression and multiple regression. The formulation of the regression is:
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Y = a + b1.X1 + b2.X2 ++b3.X3 + b4.X4+b5.X5 + e Where : Y = Quality of financial statement X1= legal audit
X2= inventory assessment X3= valuation X4 = optimization X5= monitoring control a = Constants
b1,b2,b3, b4,dan b5= Regression coefficient e = Margin of error Verification is made against the results of data processing which aims to
test the truth of the hypothesis. Validity test is used to test the accuracy of question while reability test is used to measure the quesionaire as the
indicator of variable which is then elaborated with descriptive method. Descriptive method aims to create a description or information about the
nature and the relationship between the variables studied in a systematic, factual, and accurate manner.
Coefficient levels Level of relationship
0,000 – 0,19 Very low
0,200 – 0,399 Low
0,400 – 0,599 Moderate
0,600 – 0,799 Strong
0,800 – 1,000 Very long
Through descriptive study, we can get a picture of asset management in relation to the quality of financial statements.
Research Purpose, Limitation and Originality In this study, the writers examine four variables that influence the quality
of financial statements, namely, asset legal audit assessment, inventory, valuation, optimization, and monitoring control. While there are many
factors affecting the quality of financial statements, including compliance with legislation in force, and implementation of internal control systems of
the government, this study only looks at the effect of asset management on the quality of financial statements.
This study is the only study conducted in the Municipal Government of Tual and analyzes the effect of asset management on the quality of financial
statements.
REFERENCES
AGLG. 2015. Asset Management for Local Governments. AGLG Perspective Booklet, Audit Topic 3, July.
131
Anshari, A., Syofyan, E. 2016. Pengaruh Pengelolaan Barang Milik Daerah Terhadap Kualitas Laporan Keuangan Pemerintah Kota
Padang. Jurnal Riset Manajemen Bisnis dan Publik, 41. Azhari, Lukman Roos, Akbar. 2010. “Manajemen Taman Milik
Pemerintah Kota Bandung Berbasiskan Pendekatan Manajemen Aset”, Jurnal Teoritis dan Terapan Bidang Rekayasa Sipil, Volume 17,
Nomor 3, Desember 2010.
BPK. 2015. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2015 [Semiannual Audit Report Summary Semester II of 2015]. Indonesia,
Jakarta: BPK. BPK. 2015. Laporan Hasil Pemeriksaan atas Laporan Keuangan
Pemerintah Kota
Tual Tahun
Anggaran 2014
Nomor :
02HPXIX.AMB012015 [Audit Report on Financial Statement of Municipal
Government of
Tual Year
2014 number
: 02HPXIX.AMB012015]. Indonesia, Ambon: BPK.
Davis, J. 2007. What is asset management and where do you start? American Water Works Association Journal, 9910.
Febrianti, S. 2016. Analisis Pengaruh Penatausahaan Aset Tetap Terhadap Kualitas Laporan Keuangan Pemerintah Daerah Kabupaten Kubu
Raya. Jurnal Ekonomi Manajemen Vol, 101. Hanis, M. H., Trigunarsyah, B. and Susilawati, C. 2010. Public Asset
Management Framework for Local Governments: Opportunities and Challenges for Public Asset Managers. Proceedings of 2nd
International Postgraduate Conference on Infrastructure and Environment, 1-2 June 2010, The Hong Kong Polytechnic University,
Hong Kong.
Hasan, M. I. 2002. Pokok-pokok materi metodologi penelitian dan aplikasinya. Jakarta: Ghalia Indonesia, 260.
Mardiasmo. 2004. Otonomi dan Manajemen Keuangan Daerah. Yogyakarta: Andi.
Narimawati, U. 2008. Analisis Multifariat Untuk Penelitian Ekonomi. Yogyakarta: Graha Ilmu.
Republic of Indonesia. 2014. Government Regulation of the Republic of Indonesia No. 71 of 2014 on Government Accounting Standards.
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Republic of Indonesia. 2006. Law No. 15 of 2006 on Audit Board of the Republic of Indonesia.
Rymarzak, M., Trojanowski, D. 2013. Asset Management of the Public Sector in Poland. Real Estate Management and Valuation, 21 1.
Sanusi, A. 2011. Metode Penelitian Bisnis. Jakarta: Salemba Empat. Siregar, D. D. 2004. “Manajemen Aset Strategi Strategi Penanataan
Konsep Pembangunan Berkelanjutan secara Nasional Dalam Konteks Kepala Daerah Sebagai CEO’s Pada Era Globalisasi dan
Otonomi Daerah”. Jakarta : PT. Gramedia Pustaka Utama.
Sugiama, A Gima. 2013. Manajemen Aset Pariwisata. Guardaya Intimarta: Jakarta.
Sugiyono 2005. Metode Penelitian Kuantitatif. Bandung : Alfabeta Zainal, N. I., Monoarfa, R., Husain, S. P. 2014. Pengaruh Pengelolaan
Aset Daerah Terhadap Laporan Keuangan Dinas Pendapatan Pengelolaan Keuangan Dan aset Daerah Kabupaten Bone Bolango.
KIM Fakultas Ekonomi Bisnis, 21.
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THE INFLUENCE OF INTANGIBLE ASSET IN THE FORM OF INTELLECTUAL CAPITAL TO THE VALUE OF COMPANY
Affandi Subekti affandi.subektigmail.com
1,3
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Ambon, Maluku
Province
Harry Anugerah Pradana harrypradana.bpkpgmail.com
2,
2
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Manado, Province of
North Sulawesi
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose This study analyzes the influence of Intangible Asset in the form of
Intellectual Capital to company value through the financial performance as an intervening variable. Intellectual Capital as the independent variables
was measured using the Value Added Intellectual Capital VAIC. The object of this study is the banking companies listed in Indonesia Stock Exchange
Bursa Efef Indonesia BEI. DesignMethodologyApproach
This research is a quantitative descriptive research, which aims to test and attest the influence of intellectual capital on corporate value with the
financial performance as an intervening variable. This study will use secondary data obtained from banking companies listed in Indonesia Stock
Exchange in 2013-2015. This study will examine three variables, namely the intellectual capital as an independent variable independent, the financial
performance as an intervening variable, and the value of the company as dependent variable dependent.
Expected Finding The hypothesis testing to be conducted in this study is to see whether
there is the influence of independent variables Intellectual Capital on the dependent variable Company Value directly and indirectly through the
mediating variablesintervening Financial Performance. So the results of
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this study are expected to explain the relationship between the independent variables Intellectual Capital on the dependent variable
Company Value and the extent to which the Intellectual Capital can affect the value of the company.
Practical Implication The implications of this study are expected to provide information to the
company management in evaluating financial performance and the performance of its intellectual capital that will maximize the value of the
company and for users of financial statements, especially investors, this research can be used as a reference in the decision making.
OriginalityValue This study will be conducted at the banking company whose name has
been listed on the Indonesia Stock Exchange in 2013-2015, to see how the influence of intangible assets such as Intellectual Capital on corporate
value. Keyword: Intellectual Capital, Financial Performance, Value of The Firm.
135
BACKGROUND
The development of information and telecommunications technology is so rapid has caused a fundamental change in the perception of a companys
value creation process. The introduction of Internet-based technology to the business environment resulted in factors of production such as land,
labor and capital, are no longer reliable in the face of a highly competitive business competition Maciocha Kisielnicki, 2011.
With increasing competition in the business world, have demanded the leadership of the company to change the pattern of the business, which
was originally traditional business patterns that only focus on the physical resources physical capital into a business model based on knowledge
knowledge based business. Yuskar and Novita, 2014 Implementation of the system of knowledge-based business has an impact
on financial reporting. Financial reporting is usually focused on financial performance, but it felt less benefit for the companys overall performance
assessment. There is a lot of information that needs to be presented in the financial statements of companies that will provide added value for the
company. As described in the research Herdyanto 2013: 1 in Yuskar and Novita 2014 that the added value can be either in the form of innovation,
discovery, knowledge, employee development, and good relationships with the consumers which are often termed as Knowledge Capital or
Intellectual Capital. The difference that is increased between the market value and the book
value of a company attract the attention of some researchers to explore the causes of those differences. The difference that occurs between the
market value and the book value explains that there are Invisible Value that can not be captured by the financial statements. Lev and
Radhakrishnan 2003 in Chen, Cheng, and Hwang 2005 documented that, during the period from 1977 to 2001, the ratio of market to book
value of companies listed on the S P 500 increased from 1 to 5. This implies that around 80 of the companys market value can not be
reflected in the financial statements. S P 500 Standard Poors, which is an index consisting of shares of 500 companies with large capital, mostly
from the United States.
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Limitations of financial statements in capturing the value of the company accurately describe the fact that the source of economic value can no
longer be assessed only through tangible assets, but also need to consider the intangible assets such as Intellectual Capital. Intellectual Capital
including human capital, structural capital, customer, process, database, brand, and the system has played a very important role in creating a
sustainable competitive advantage Edvinsson and Malone, 1997 in Chen, Cheng, and Hwang 2005.
Some companies managed to boost the companys value fantastically to utilize the Intellectual capital. Just mention some company such as
WhatsApp that was bought by Facebook with a value of 19 billion US dollars, or around Rp 223 trillion. In addition there is a LinkedIn company
that is valued by Microsoft worth of 26.2 billion US dollars or equivalent to Rp 349.3 trillion. There is also the company of Nokia officially acquired the
telecommunications network services company Alcatel-Lucent with the value of 16.6 billion US dollars, or around Rp 215 trillion. http:
tekno.kompas.com,retrieved 09272016. Companies that can understand the concept of Intellectual Capital is more
likely to succeed because they have realized that the Intellectual Capital is valuable so the company will continuously update their knowledge and
skills to be able to compete with other companies Huffman, 2012 in Feimianti and Anantadjaya, 2014. Intellectual Capital becomes important
for creating a sustainable advantage in a competitive business, and create a company which has different characteristics than the other company.
Furthermore, in running a business based on knowledge, skills such as knowledge, expertise and leadership are more important than tangible
assets. Many researchers have recognized that Intellectual Capital can push the
value of the company. Klein 1998, P.1 in Moon Kim 2006 defines the Intellectual Capital as the knowledge, experience, expertise, and associated
soft assets. Intellectual Capital can be the most powerful assets to boost the value and competitive advantage of a company.
The increasing requirement regarding disclosure of Intellectual Capital as an activator of the companys value is not followed by the ease of
measuring this Intellectual Capital. The difficulty of measuring Intellectual
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Capital has pushed Pulic 1998 uses the measurement of Intellectual Capital indirectly to assess the efficiency of the value added as a result of
the companys intellectual ability Value Added Intellectual Coefficient - VAIC.
The main components of VAIC can be seen from the companys resources, namely physical capital VACE- Value Added Capital Employed, human
capital VAHU - Value Added Human Capital, and capital structure SCVA - Structural Capital Value Added. VAIC method gives the measurement basis
which is easily calculated, internationally standardized and consistent. Besides the advantage of VAIC is data used in the calculation of VAIC is
based on financial statements that are would normally have been audited by a professional public accountant. Yuskar and Novita, 2014.
LITERATURE REVIEW Definition and Classification of Intellectual Capital IC
Until now, the definition of the Intellectual Capital variously interpreted by some researchers as indicated in the following table.
Tabel Definisi Intellectual Capital IC No
Author Definition
Classification 1
Coakes, Bradburn
2005:64 IC is the one in which the
knowledge residing within human capital is combined
with systems, technologies, processes and knowledge
repositories.
-
Human Capital
2 Jafaridehkordi,
Rahim, Aminiandehkor
di 2015:1022 Intellectual Capital IC is
the sum of all knowledge a company is able to use in
the process of conducting business to create value for
the firm. IC can be further dissected into human capital
HC which is the combined knowledge,
skill, innovativeness, ability of the
-
Human Capital
-
Structural Capital
138
companys individual
employees to meet the task at hand, companys values,
culture, and philosophy and structural capital SC
which
comprises the
hardware, software,
databases, organizational
structure, patents,
trademarks, and everything else
of organizational
capability that
support those
employees productivity.
3 Namvar,
Fathian, Akhavan,
Gholamian 2010:680
Intellectual Capital IC is classified into human capital
HC, relational capital RC, structural capital SC and
intellectual property IP.
-
Human Capital
-
Relational Capital
-
Structural Capital
-
Intellectual Property
4 Feimianti,
Anantadjaya 2014:100
Intellectual Capital can be defined as economic value
from three
types of
intangible assets which are human
capital, organizational capital and
social capital
-
Human Capital
-
Organizational Capital
-
Social Capital
5 Moon, Kym
2006:257 Intellectual Capital can be
defined as human capital, structural
capital, and
relational or
customer capital
-
Human Capital
-
Structural Capital
-
Customer Capital Intellectual Capital IC is an intangible asset related to the knowledge,
experience and the use of technology Solikhah, Subowo, 2016. According to Coakes and Bradburn 2005 IC is the one in the which the knowledge
residing within human capital is combined with systems, technologies,
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processes and knowledge repositories. While Jafaridehkordi, Rahim, Aminiandehkordi 2015 defines IC as the sum of all knowledge a company
is Able to use in the process of conducting business to create value for the firm . Furthermore, Edvinsson and Malone 1997, divides IC into two
categories: Human Capital HC and Structural Capital SC. Human Capital HC is the combined knowledge, skills, innovativeness, ability of the
companys individual employees to meet the task at hand, the companys values, culture, and philosophy. While Structural Capital SC consists of
the hardware, software, databases, organizational structure, patents, trademarks, and everything else of organizational capability that support
Reviews those employees productivity. According to the table definition of IC and the opinion of the experts above
shows that some researchers have a common perception in interpreting Intellectual Capital which is a combination of three components: human
capital, structural capital and relational capital. Human Capital
From a macroeconomic point of view, recognizes human capital as a primary driver of competitiveness, prosperity and economic wealth. Thus,
it can be considered the key element of IC and one of the most important sources of firm’s sustainable competitive advantages Castro, Verde, Saez,
Lopez, 2011. Human capital makes reference to the knowledge explicit and tacit – that
people possess, as well as their ability to generate it, which is useful for the mission of the organization. In Table below, we can see a literature review
of human capital definitions made by academics and practitioners.
Concept of Human Capital Authors
Concept Brooking 1996
Human-centered assets are the collective expertise, creative and problem solving capability, leadership,
entrepreneurial and managerial skills embodied by employees of the organization
Edvinsson and Malone 1997
Is defined as the combined knowledge, skill, innovativeness and ability of company’s individual
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employees to meet the task at hand Sveiby 1997
The capacity to act in a wide variety of situations to create both tangible and intangible assets
Stewart 1998 Skills and knowledge of our people
CIC 2003 Represents the value of knowledge and talent
embedded in the employees, and it includes values and attitudes, personal knowledge and skills, and
behaviors
Subramaniam and Youndt 2005
The knowledge, skills, and abilities residing with and utilized by individuals
Martı´nez-Torres 2006
The knowledge, skills, etc. of individuals Cabrita and Bontis
2008 Comprises the individual’s education, skills, values
and experiences Wu et al. 2008
Embraces all of the skills and capabilities of the people working in an organization
Chang et al. 2008 Denotes the tacit knowledge embedded in the minds
of the employees. Employees generate IC through their
competence, attitude,
motivation and
intellectual agility Alama 2008
The intangible elements that the human capital includes refer, basically, to the knowledge acquired
by a person, besides other individual qualities as the loyalty, the polyvalence or the flexibility, which there
determine the productivity and the value of the contribution of the individual to the company
Hsu and
Fang 2009
Comprises all business capital embedded in employees and not owned by the organization. This
capital may be taken away by employees, and includes employees and managers’ competence,
experience, knowledge, skills, attitude, commitment and wisdom
Source : Castro, Verde, Saez, Lopez, 2011 Based on the literature review, we can understand that human capital is
the skills and knowledge possessed by the employees and can be developed through training provided by the company. Skills and
knowledge, improve the proficiency of employees in the working place,
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thereby increasing the operational efficiency of enterprises. The more efficient a company in operation means that the higher the value of the
company in the shareholders view. Structural Capital
Table below shows the main definitions founded in the literature for the concept of structural capital.
Concept of Structural Capital Authors
Concept Brooking 1996
Includes intellectual property assets that contain the legal mechanism for protecting many
corporate assets, infrastructure assets, including know-how, trade secrets, copyrights, patents,
design rights, trade and service marks, as well as, Infrastructure assets, including those technologies,
methodologies and processes which enable the organization to function, including corporate
culture, databases and information, etc.
Edvinsson and Malone 1997
Is the
hardware, software,
databases, organizational structure, patens, trademarks and
everything else of organizational capability that supports those employee’s productivity
Sveiby 1997 Patents, concepts, models and computer and
administrative systems Stewart 1998
Stored knowledge
in patents,
processes, databases, networks, etc
Hsieh and
Tsai 2007
Technological capital. Includes know-how from RD activities, technological knowledge, trade
secrets, intellectual property, and patents Subramaniam and
Youndt 2005 Organizational
capital: the
institutionalized knowledge and codified experience residing within
and utilized through databases, patents, manuals, systems, and processes
Martı´nez-Torres 2006
The property of the organization, such as processes, information in a database, etc.
Alama 2008 The structural capital includes the intangible assets
that form a part of the structural design of the company, facilitating the flow of knowledge and
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bringing as consequence an improvement in the efficiency of the organization on having integrated
repaid, in a suitable way, the different functions of the company
Cabrita and Bontis 2008
It is comprised of non-human assets, such as information systems, routines, procedures and
databases Wu et al. 2008
It includes all non-human storehouse of knowledge in
organizations, including
databases, organizational charts, process manuals, strategies,
routines and anything whose value to the firm is higher than its material value
Chang et al. 2008 Refers to the non-human storehouses of
knowledge in a firm that involve organizational structures, such as the organizational routines, the
structure of the business, and various types of intellectual property
Hsu and Fang 2009 Structural capital as including process capital and
innovation capital. Process capital is defined as workflow, operation processes, specific methods,
business development
plans, information
technology systems, and cooperative culture, etc. Innovation capital is defined as intellectual
property within an organization, including patents, copyrights, trademarks, and knowhow, etc.
source : Castro, Verde, Saez, and Lopez, 2011 Structural Capital in a company better known for all systems, procedures,
databases, copyrights, patents, structural procedures, rules and policies Which are important for decision making. Rehman and Zahid, 2011
Relational Capital In Table Below, we show a literature review about the different concepts
of relational capital.
Concept of Relational Capital Authors
Concept Edvinsson
and Malone 1997
Included in the structural capital, customer capital provides the relationships developed with key
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customers Stewart 1998
Focused on customer capital: relationships with customers and suppliers
CIC 2003 Can be defined as the combination of knowledge
which is incorporated in the organization and employees, as a consequence of the value derived
from the relationships which they maintain with market agents and with society in general
Martı´nez-Torres 2006
The relationships that an organization has with its clientscustomers and environment
Alama 2008 There are included those intangible assets that the
company obtains when it supports relations with agents of its environment like clients, suppliers or
allies
Cabrita and Bontis 2008
Is the knowledge embedded in relationships with customers, suppliers, industry associations or any
other stakeholder that influence the organization’s life
Chang et al. 2008 Represents the knowledge embedded in the
relationships with the outsider environment Wu et al. 2008
Refers to customer capital, that represents the potential an organization has due to ex firm
intangibles Hsu and Fang 2009
Includes all value of stakeholders, customers, and supplier relations
source : Castro, Verde, Saez, and Lopez, 2011 Based on the literature review, it can be concluded that Relational Capital
is the companys relationships with external stakeholders such as suppliers, customers, environment, society, government and etc.
Measurement of Intellectual Capital IC Pulic 1998 proposed a measure of the ability of the intangible capital to
create value by the VAIC measure. It is an analytic procedure that allows the managers, shareholders and different stakeholders to assess the value
added by the different resources of the firm. The components of the VAIC can be defined according to three resources of the firm: the physical
capital, the human capital, and the structural capital.
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The VAIC measure is acceptable on different levels on the professional plan and on the academic plan. Indeed, the benefits of using the VAIC measure.
First, it is a standard basis of measure. Second, the other measures of the intangibles are based on a specific sample. In fact, when it is about a large
and varied sample, the traditional measures are not more adequate. The basic data of calculating the VAIC can be verified. It is possible to be based
on data defined from the financial statements. Fourati and Affes, 2013 Methods VAIC measure the the efficiency of the three types of inputs that
is owned by the company, among others: Human Capital HC VAHU – Value Added Human Capital, Structural Capital SC STVA – Structural
Capital Value Added dan Capital Employed CEVACA – Value Added Capital Employed. This methodology is being used in many countries like
Taiwan, Iran, Malaysia, Tunisia, and Pakistan Chen et al, 2005; Choopani and Ehtesham, 2016; Muhammad and Ismail, 2009; Fourati and Affes,
2013; Rehman, Rehman and Zahid, 2011. The VAIC is used as a measure to evaluate the efficiency of corporations.
Pulic 1998 formulated the calculation of VAIC as follows :
-
Output represent the overall income, all the products and services sold on the market.
-
Input contain all the expenses exclude labour expenses.
-
Value Added VA is difference between output and input VA = Output – Input
-
Human Capital HC ie: labour expenses Salaries and Wages, considered as an investment.
-
Capital Employed CE ie: the available funds Equity, Net Income
-
Structural Capital SC which is the difference between VA and HC SC = VA – HC
-
Value Added Human Capital VAHU is the ratio of VA to HC VA HC.
-
This ratio shows the contribution made by each rupiah invested in HC against value added organization.
-
Structural Capital Value Added STVA is the Ratio of SC to VA SC VA.
-
This ratio measures the number of SC required to produce 1 rupiah of VA and is an indication of the extent to which the success of SC in
value creation.
-
Value Added Capital Employed VACA is the ratio of VA to CE VA CE.
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-
This ratio shows the contribution made by each CE unit on the organization value added.
-
Value Added Intellectual Coefficient VAIC is the total of VAHU, STVA and VACA VAIC = VAHU + STVA + VACA.
VAIC indicate the organizations intellectual abilities. Intellectual Capital and Firm Performance
Intellectual capital correlation with the companys financial performance and corporate value have been proved empirically by several researchers
in various approaches in several countries. The following table summarizes some of the studies which have been done to examine the relationship
between Intellectual Capital with the companys performance and corporate value.
Authors Title
Dependent Variables
Independent Variables
Chen et al. 2005
An empirical investigation of the
relationship between intellectual capital and
firms’ market value and financial performance
Taiwan Financial
Performance measured with
Market to book value ratios of
equity,
ROE, ROA, Growth in
revenues and
Employee Productivity
Intellectual Capital
measured with VAIC and
RD expenditures
Choopani dan
Ehtesham 2016
Influence of intellectual capital components on
financial performance of companies in food
industries Iran Financial
Performance measured with
sales percent growth of
company GR, ROE, ROA,
operational cash flow CFO
Intellectual Capital
measured with VAIC
Muhammad dan Ismail
2009 Intellectual Capital
Efficiency and Firm’s Performance: Study on
Financial Performance
measured with Intellectual
Capital measured
146
Malaysian Financial Sectors
profitability and ROA
with VAIC Fourati dan
Affes 2013 Intellectual Capital
Investment,Stakeholde rs Value, Firm Market
Value and Financial Performance : The Case
of Tunisia Stock Exchange
Financial Performance
measured with Market-to-book
value ratios of equity and ROA
Intellectual Capital
measured with VAIC
Rehman , Rehman dan
Zahid 2011 Intellectual Capital
Performance And Its Impact On Corporate
Performance: An Empirical Evidence
From Modaraba Sector Of Pakistan.
Financial Performance
measured with EPS, ROE, ROI
Intellectual Capital
measured with VAIC
In this study, researchers will use the ROE, ROA and EPS to measure the financial performance and VAIC to measure Intellectual Capital.
Influence of Financial Performance on Corporate Values Some measure for determining the value of the company is the stock price,
the price-earnings ratio and price-book value. The stock price alone can not be separated from the companys financial performance Yuskar and
Novita, 2014. Financial performance has an influence on the value of the company. This has been proven by several studies.
Lumowa 2015 examined the influence of financial performance as represented by ROE and EPS on stock prices of companies LQ 45 in the
Indonesia Stock Exchange. The result is: the ROE and EPS have a significant effect on stock prices. Similar results were also obtained by Ulya study
2014 that the companys performance measured by ROA has a positive relationship to the value of the company that is proxied by PER Price
Earning Ratio. The another study was conducted by Hidayati 2008 obtained results that
financial performance is represented by return on equity ROE positively effect on the value of the company which is reflected through the price
book value PBV.
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The present study will use utilize a price book value PBV to measure the value of company.
Hypotheses and Research Framework
The hypothesis of this study can be specified as follows: H1
: Intellectual capital VAIC effect on financial performance
ROE,ROA,EPS H2
: Financial performance ROE, ROA, EPS effect on companys value
PBV H3
: Intellectual capital VAIC effect on companys value PBV
through financial performance ROE, ROA, EPS The research framework can be described as follows:
RESEARCH METHODS
This research uses a descriptive method. The objective is to create an overview description systematically, factual and accurate about the facts,
as well as the nature of the relationship between the phenomenon which has been investigated. The comparative method in order to know the
comparison between variables and associative research to examine the relationship between variables are also used in this study.
This study aimed to describe Intellectual Capital of independent variables that affect the companys value dependent variable through intervening
variable of financial performance and analyzing their relationship influence. Intellectual Capital as the independent variables was measured
using the Value Added Intellectual Capital VAIC on the dependent variable, ie the value of the company in the banking sector that is listed on
the Stock Exchange. Based on the analysis and data types, this research categorized as
quantitative research, because the data used is quantitative data and the data analysis character is quantitative statistical. In analyzing the effect
correlation between variables, researchers used linear regression.
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This research is a case study that examines a population, ie the population of the entire banking group companies listed on the Stock Exchange in
2013-2015. The data used is the data panel. According to Nachrowi 2006: 192, the data panel is a combination cross section data and time series. In
this case, the cross section data is data on companies belonging to the banking group. While the time series data is the data captured from the
year 2013 to 2015. Data Sources and Data Collection Techniques
This research is a case study on companies listed on the Stock Exchange in 2013-2015 that is included in the group of banking companies. The
purposive sampling method used in the determination of the sample, where companies have been selected with specific criteria.
The data used is secondary data. Secondary data sources are data sources that come from other parties who have done the processing of data and
can be accessed by investigators to be analyzed more deeply. Secondary data used in the form of financial statements of companies acquired from
BEI website www.idx.co.id.
Research Purpose, Limitation, and Originality
The purpose of this study was to analyze the influence of Intangible Asset in the form of Intellectual Capital on corporate value through the financial
performance as an intervening variable. The object of research is limited to the banking company and only to those which listed on the Indonesia Stock
Exchange BEI in the year 2013-2015. In this study, the intervening variables were measured using a combination of ROA, ROE and EPS.
REFERENCES
Castro, G.M., Verde, M.D., Saez, P.L., Lopez, J.E.N. 2011. Towards An Intellectual Capital Based View of the Firm : Origins and Nature.
Journal of Business Ethics pp. 649-662. Chen, M. C., Cheng, S. J. and Hwang, Y. 2005. An empirical investigation of
the relationship between intellectual capital and firms market value and financial performance. Journal of Intellectual Capital Vol. 6 No.
2 pp. 159-176. Choopani, D., and Ehtesham, A. 2016. Influence of Intellectual Capital
149
Components on Financial Performance of Companies in Food Industries. Journal of Current Research in Science Vol. S 1 pp. 431-
439. Coakes, E., and Bradburn, A. 2005. What Is the Value of Intellectual
Capital ?. Knowledge Management Research Practice 3 pp. 60- 68.
Feimianti, E., and Anantadjaya, S.P.D. 2014. Value Creation of Intellectual Capital: Financial Performance Analyses in Indonesian Publicly Listed
Consumer Goods Industry. Review of Integrative Business Economics Research Volume 3 No.1 pp. 99-113
Fourati, H., and Affes, H. 2013. Intellectual Capital Investment, Stakeholders Value, Firm Market Value and Financial Performance:
The Case of Tunisia Stock Exchange. Journal of Information Knowledge Management Vol. 12 No. 2 1350010 12 pages.
Hidayati, E.E. n.d. Analisis Pengaruh DER, DPR, ROE dan Size Terhadap PBV Perusahaan Manufaktur yang Listing di BEI Periode 2005-2007.
Magister Manajemen Universitas Diponegoro. Jafaridehkordi, H., Rahim, R.A., and Aminiandehkordi, P. 2015. Intellectual
Capital and investment opportunity set in Advanced Technology Companies in Malaysia. International Journal of Innovation and
Applied Studies Vol. 10 No. 3 pp. 1022-1027. Lumowa, D. n.d. Analisa Pengaruh Profitabilitas Terhadap Harga Saham
Perusahaan Lq 45 Di Bursa Efek Indonesia. Fakultas Ekonomi dan Bisnis, Pendidikan Profesi Akuntansi Universitas Sam Ratulangi
Manado. Maciocha, A and Kisielnicki, J. 2011. Intellectual Capital and Corporate
Performance. The Electronic Journal of Knowledge Management Volume 9 Issue 3 2011 pp. 271-283
Moon, Y.J., and Kym, H.G. 2006. A Model for the Value of Intellectual Capital. Canadian Journal of Administrative Sciences Vol. 23 No.3
pp. 253-269. Muhammad, N.M.N., and Ismail, Md.K.A. 2009. Intellectual Capital
Efficiency and Firm’s Performance: Study on Malaysian Financial Sectors. International Journal of Economics and Finance Vol. 1 No. 2
pp. 206-212. Namvar, M., Fathian, M., Akhavan, P., and Gholamian, M.R. 2010.
Exploring the impacts of intellectual property on intellectual capital and company performance The case of Iranian computer and
electronic organizations. Management Decision Vol. 48 No. 5 pp.
150
676-697. Pulic, A. 1998. Measuring the Performance of Intellectual Potential in
Knowledge Economy. Presented in 1998 at the 2
nd
McMaster World Congress o Measuring and Managing Intellectual Capital by the
Austrian Team for Intellectual Potential. Rehman, W. U., Rehman, P. D., Rehman, P. D., and Zahid, A. 2011.
Intellectual Capital Performance and Its Impact on Corporate Performance: An Empirical Evidence from Modaraba Sector of
Pakistan. Australian Journal of Business and Management Research Vol.1 No.5 pp. 08-16.
Solikhah, B., and Subowo 2016. An Empirical Study of the Driver Factors of the Intellectual Capital Disclosure. Review of Integrative Business
Economics Research Volume 5 No.1 pp. 229-240. Ulya, H. 2014. Analisis Pengaruh Kebijakan Hutang, Kebijakan Dividen,
Profitabilitas, Kinerja Perusahaan dan Keputusan Investasi Terhadap Nilai Perusahaan pada Perusahaan Manufaktur yang Terdaftar di
Bursa Efek Indonesia BEI Tahun 2009-2011. Fakultas Ekonomi dan Bisnis Universitas Dian Nuswantoro Semarang.
Yuskar and Novita, D. 2014. The Influence of Intellectual Capital on Firm Value Through Financial Performance as an Intervening Variable.
The Journal of Management and Business Sriwijaya Volume 12 No. 4
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THE CHALLENGES OF MUNICIPAL ASSET MANAGEMENT IN DEVELOPING COUNTRY: A CASE STUDY OF BANDUNG
Marga Gumelar marga16001mail.unpad.ac.id
1,3
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Palangkaraya, Province
of Central Kalimantan
Nur Alam alam_danayahoo.co.id
2,3
2
Staff at the Office of Finance and Regional Asset Management Revenue of City Government of Palopo, West Sulawesi
3
Students of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Purpose: The research is aimed to identify the problems on public asset
management of municipality by evaluating the local government asset management system. The asset management include several aspects
namely asset inventory, asset protection and asset utilization. Designmethodologyapproach:
A case study in the city government of Bandung – West Java, Indonesia – is used as an approach to achieve the research objective. The study involved
three data collection techniques: document analysis, questionnaire and interview. It applies likert scale analysis tool to measure attitude, opinion
and perception of government officers about municipal asset management.
Expected findings: The findings will provide information about the problems appear in the
implementation of the municipal asset management that include asset inventory, asset protection and asset utilization. It will help local
government to improve the asset management system so that the municipal assets can be organized and well managed and it would be able
to contribute to the economy. Practical implication:
152
The research will define the problems in the asset management system within the local government and it will answer each of these challenges
with practical suggestions. The result is expected to provide a guidance for local authority to cut out the circles of asset management issues which
have become a classical problem for years. Originalityvalue:
The paper will offer information for further research on considering the environment and activities of local government asset management system.
Keywords: asset management system, public asset management, municipal asset, local government, Bandung
153
RESEARCH BACKGROUND
The paper proposes to identify the problems on public asset management of municipality by evaluating the local government asset management
system. By identifying the existing problems, it can formulate practical and appropriate suggestions in addressing the issues. The result is expected to
provide guidance for local authority to cut out the circles of asset management issues which have become a classical problem for years.
Local government asset management has been an issue unresolved for years. The Audit Board of The Republic of Indonesia 2015, 2015a revealed
that the asset problems have emerged since long time ago. Particularly in the assets protection, The Audit Board findings since 2004 until today have
been always discovering the case about uncertified assets. Then another challenge put forward by the Audit Board is fixed assets that are not known
to exist or controlled by the other party; removal and reduction are not in accordance with provisions; and reporting of fixed assets are not
supported by the registration in the inventory of goods. In the case of city government of Bandung, The Audit Board of The
Republic of Indonesia 2014 highlighted the lack of coordination of the property asset inventory. There are some administrative issues due to the
change or handover, including a change that has not been equipped with convincing evidence. The city government of Bandung has some problems
on asset management such as land and buildings valued at Rp 3.6 trillion because of the unknown areal. Related to asset condition, city government
of Bandung is also troubled by the leased assets. It is known, there are 52 letters of agreement that have expired, but still appear as a receivable
worth Rp 274 billion. The findings of the audit in 2015 by The Audit Board of The Republic of
Indonesia The Audit Board of The Republic of Indonesia, 2016a unveiled some findings on assets of the city government of Bandung that worth Rp
23.16 trillion. First, assets valued at about Rp 502.97 billion are in the unknown location. Secondly, there are many facilities and infrastructure
that have not been recorded. And the largest, assets valued at Rp 11.07 trillion, is not based on a proper valuation.
154
The poor of asset management is caused by the lack of understanding within the local governments on the importance of the assets. According to
Kaganova 2012, assets as the backbone of the economy if not taken care properly, will not be able to support economic development. In addition,
an effective asset management system would help local governments to increase revenue, attract investors and provide infrastructure for public
through the use of assets Fernholz and Fernholz, 2007. Davis 2007 states that an asset management system would also help us to ensure on
the certain assets we have, the condition and location of one’s particular assets.
The disorder in the management of local government assets if not addressed immediately will cause losses not only the state finance but also
hinder the economy and the supply of public service infrastructure. The issues raised by The Audit Board of The Republic of Indonesia has
repeatedly occurred and consistently become the the audit findings every year. Hence there should be re-identification of problems that must be
comprehensive and fundamental to get an applicable solution. The paper is structured as follows. It begins with an introduction and
background of the study. The second section discusses the literature on public asset management particularly on the case of asset management of
some municipalities in Indonesia. The third section explains the method used in this study. Finally, it closed with the research results expectation,
limitation and originality.
LITERATURE REVIEW Asset Management: The Concepts
Asset management can be defined as a series of systematic and structured process that continuously improve the value of the asset in the
organization in providing services Davis, 2007; The Australian Asset Management Collaborating Group, 2012.
Asset management is a strategy of continuous improvement process to improve the availability, protection, reliability, and life cycle of assets
Davis, 2007. ISO 55000 standard The Institute of Asset Management, 2015 defines asset management as a series of coordinated activities of an
155
organization to realize the value of an asset, where the asset is an item that has a potential or actual value to an organization. The term activity
has a broad meaning including the systems approach used, the planning and implementation.
According to The Australian Asset Management Collaborating Group 2012, asset management is a process of organizing, planning, designing
and controlling the acquisition, maintenance, improvement, and asset selling and engineering infrastructure to support service delivery. This
process is systematic, structured and covers the whole life of physical assets. The purpose of asset management is to optimize the potential of
the assets and to minimize the risks and costs. The Contemporary Issues of Public Asset Management
Municipal asset management is a local government decision-making based on asset information and application system that includes operational,
acquisition, maintenance, and development of physical assets effectively through performance-based management Kaganova and Kopanyi, 2014;
The Auditor General for Local Government, 2015; The Michigan Transportation Asset Management Council, 2006.
Local government asset management Kaganova and Kopanyi, 2014 is the process of decision-making and its implementation in terms of operational,
maintenance, improvement, acquire, or develop physical assets effectively, with the aim of providing the best service to the community. In this case,
the asset management is one of the local governments function that has the most direct effect towards peoples lives. On the other hand The
Auditor General for Local Government 2015 focuses on the life cycle as well as the capacity of each assets and develop the assets information
system. The definition of the municipal asset according to Government Regulation
of The Republic of Indonesia Number 272014 on State and Local Government Asset Management is all goods purchased or obtained at the
expense of municipal government budget or arising from other legitimate acquisition. It includes activities such as planning and budgeting,
acquisition, utilization, maintenance and protection, valuation, disposal,
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changehand over, administrationinventory and supervision, monitoring and controlling.
Some asset management principles The Michigan Transportation Asset Management
Council, 2006
are include
a performance-based
management, a decision based on accurate information, and a continuous monitoring.
Refined management of land owned assets by the local government has the purpose Kaganova et al., 2000 to improve the regulation and the
execution in order to encourage effective asset management; thus the decentralized management of the governments assets will provide
benefits in the increase of the citizens participation inside the governance so as to be more effective, responsive, and accountable.
The importance of good asset management, according Kaganova 2012 is when the assets are not managed properly, their quality and quantity
would be insufficient to support economic development. Moreover, cost efficiency in the use of assets, facilities, and infrastructure is essential to
reduce the budget cost. From the case study of New South Wales and Victoria, Mahmood et al.
2014 found that there is a relation between asset management regulations and directions between New South Wales and Victoria. In
addition, based on the findings, there is only one state that dress up most basic principles of asset management, that is New South. Other states do
not establish broader path of asset management regulations and directions.
There are three reasons why running public property is complicated Rymarzak and Trojanowski, 2012. First, the public property has a
distinguished character. Second, the difficulty of managing public property. Both for the funding and even the profit. And the last, the expenses of the
assets like cost of utilization, preservation and any other work. Grubisic et al. 2009 found some issues in implementing public asset
management in Croatia such as the inadequate of asset registry and asset classification; unclear authorization for owning, managing and public assets
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utilization; and the shortfall of human resources which have competencies to handle the valuation process of government assets.
Indonesian Experiences on Local Government Asset Management There are several opportunities behind the challenges in the local
government asset management in Indonesia. The opportunities are local governments become more effective and efficient, accountable, and
improve the quality of public services. Whilst the challenges that need to be faced include clear legal and institutional framework that to support the
implementation of asset management, the skill and the adequacy of human resources, inventory of assets and asset security Hanis et al., 2010;
Simamora and Halim, 2012; The Audit Board of the Republic of Indonesia, 2015, 2015a, and 2016.
There are opportunities and challenges within the local government in developing countries, particularly Indonesia, in implementing the public
asset management system Hanis et al., 2010. The opportunities are local governments become more effective and efficient, accountable, and
improve the quality of their public services. On the other hand, there are also challenges to be faced. The challenges are the local government does
not have clear legal and institutional framework to support the implementation of asset management, the complexity of the public
organizations objective and availability of data that is necessary to manage public assets. The opportunities and challenges causing the needs of
improvement in the management of public assets to generate high performance in all of local government organizations sector. Asset
managers should strengthen their understanding of the management of public assets.
Simamora and Halim 2012 examined the factors that influence the local government asset management such as: human resources, knowledge of
the asset management, proof of ownership of assets, asset valuation, management commitment and the lack of awareness and responsibility of
asset managers. Hanis et al. 2010a assume that there are some important elements that
should be included in the management system of public assets, which is
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the identification of appropriate assets; the needs of public assets analysis; life cycle of assets; and performance measurement.
Asset Inventory, Asset Protection and Asset Utilization: Some Classical Cases
Assets inventory is an important aspect in the management of assets that should be strengthen up with a good system to generate database that has
been the basic foundation for making the right decision Kaganova and Kopanyi, 2014; Fernholz and Fernholz, 2007. The weakness of asset
protection in Indonesia have been found long time ago and repeatedly happen every year. In fact, it would be costly if the property owned by the
local government had illegally controlled by the other party The
Audit Board of The Republic of Indonesia, 2015 and 2015a; Kaganova and
Kopanyi, 2014. The Audit Board of The Republic of Indonesia 2015, 2015a, and 2016 discover several things from the lack of utilization of the
assets by the some local governments; asset utilization executed without proper planning and are not tied to an agreement; and the lease
agreement has expired but the asset remains in used by others. Inventory according to the Government Regulation Number 272014 is an
activity to perform data collection, recording, and reporting the results of the data collection property of the stateregion. Maintain a clear and
updated asset records according to Kaganova and Kopanyi 2014 is very important, because we cannot manage something if we do not know
whether the asset exists or not. Local government asset management is accomplished through a well
functioned inventory system. That system must contain information that can quickly assess what the local governments have, the type of property
and location, as well as updating the value. Asset managers have to look at whether the asset inventory has been transparent so that it can be used as
a database. Especially for statements of assets are required to be considered the accuracy of such information. Improvements in asset
inventory management is done through a constant process by updating regularly Fernholz and Fernholz, 2007.
According to the Government Regulation Number 272014, the protection of stateregion property covers administrative protection, physical
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protection and legal protection. Furthermore, the technical provisions in the Regulation of the Ministry of Home Affairs Number 192016 regulate
the procedure of protection, especially on land assets. Physical land protection is achieve by: put up a lay of the land by construct a boundary
fence; put up a sign of ownership; and put up security guard. The protection of land administration is done by collecting, recording,
storing, and administer proof documents of land ownership systematically and safe; and perform steps consist of: complete the proof of ownership
andor restore the land certificate; create the identity card of goods; perform an inventorycensus in the local area belongings once in five years
and report the results; and to record in the list register. As for the legal protection made to: the land that havent had a certificate; and the land
that already has the certificate but not on behalf of local governments. According to Kaganova and Kopanyi 2014 to protect the property of local
governments can be expensive, but force off people, businesses or cleaning of dormant assets will actually cost more.
The protection of land administration is performed by collecting, recording, storing, and administer proof documents of land ownership safe and
systematically; and perform steps consist of: complete the proof of ownership andor restore the land certificate; create the identity of
properties; perform an inventorycensus in the local area belongings once in five years and report the results; and to record in the list register. As for
the legal protection made to: the land that havent had a certificate; and the land that already has the certificate but not on behalf of local
governments. According to Kaganova and Kopanyi 2014 to protect the property of local governments can be expensive, but force off people,
businesses or cleaning of dormant assets will actually cost more. Highlighting the asset protection, The Audit Board of The Republic of
Indonesia 2015 and 2015a findings since 2004 until today have always found the case of uncertified assets. Some of the other challenge put
forward by the the Audit Board are unknown fixed assets controlled by another party, removal and the depreciation are not align with the
regulations and the asset reporting remains unsupported by the registration in the inventory of goods.
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Still based on the Audit Board report mentioned above, the local government’s land certification issue has still be found by the Audit Board
until today. This shown that the local government’s land certification still be a problem for quite a long time and hasn’t been settled. According to
data from the Ministry of Finance until December 31, 2014, at least as much as 43.32, from 66,820 land parcels belonging to the central
government has not been certified. While the local government land that has not been certified until December 31, 2013 at least as much 107,635
plot. The amount of land that has not been certified demonstrate the weakness of the legal protection on government land assets.
The Audit Board of the Republic of Indonesia 2015, 2015a, and 2016 suggested some of the problems that occurred in the local governments
asset management, which are the asset inventory weakness; the weakness of asset protection in the form of administrative, physical and legal; assets
in a dispute with other parties; underutilization of assets; the weakness of the valuation of assets; and weaknesses in the control and monitoring.
Ineffectiveness in the local governments asset management, according to the report, happened for several reasons: 1 inaccurate assets information
in the balance sheet; 2 improper planning and unbound agreement in the use of assets execution; 3 the lease agreement has expired but the assets
were still used by the other party; and 4 fail implementation of the build- over-transfer.
In the case of the city government of Bogor and the city government of Depok The Audit Board of The Republic of Indonesia, 2015, both asset
management have not been fully effective because: 1 The weakness of the assets recording system and the limited number of officers; 2 The
weakness of the in-used assets security; 3 Development of assets such as public transport Terminal Baranangsiang Bogor is still not being
implemented; 4 There are infrastructures, facilities and utilities of assets that have not reported on the balance sheet and their utilization have not
bound by the rental agreement; and 5 Integrated Station construction has not been optimal.
While in the case of the municipal government of Poso, the city government of Bekasi, the municipal government of Karawang and the
municipal government of Cirebon The Audit Board of The Republic of Indonesia, 2016 some cases have been found as such: 1 There is no
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mechanism or administration procedure and adequate for fixed assets protection; 2 Fixed asset implementation and reporting is not entirely
competent; 3 Asset managers do not conduct monitoring of the fixed assets administration; 4 There are no sufficient policies, mechanisms and
procedures in the administration of regional property; and 5 The availability and management of human resources associated with the
management of regional property is also inadequate. The city government of Bandung The Audit Board of The Republic of
Indonesia, 2014 has some problems on asset management such as land and buildings valued at Rp 3.6 trillion because of the unknown areal.
Related to asset condition, Bandung municipal government is also troubled by the rented assets. It is known, there are 52 letters of agreement that
has expired but still appears as a receivable worth Rp 274 billion. The audit results in 2015 by the Audit Board The Audit Board of The Republic of
Indonesia, 2016a there are some findings on assets of the city government of Bandung valued Rp 23.16 trillion. First, the location of assets valued at
Rp 502.97 billion are unknown. Secondly, there are many facilities and infrastructure that have not been recorded. And the largest one, an asset
worth at Rp 11.07 trillion, is not based on a reasonable valuation.
RESEARCH METHOD
The research uses a case study in city government of Bandung, West Java – Indonesia. The case study involved three data collection techniques:
documents analysis, questionnaire and interview. There are several documents that must be analyzed. The first document is
related to aspects of the regulations and laws. It is starting from the regulations and laws of the central government level to the local level. In
addition to the regulations and laws, local government has been producing some important documents related to the asset management process. The
documents include reports, records, communication documents, inventory lists, and other relevant documents.
Questionnaire will be distributed to asset manager and two officers of each department in municipality government of Bandung. This technique
applies likert scale analysis tool to measure attitudes, opinions and
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perceptions of government officers about the municipal asset management.
The purpose of the interview is to examine the conditions of local government asset management. Interview will be conducted in semi-
structured mode with asset managers and officers of departments of city government.
Research Purpose, Limitation and Originality
The paper is aimed to identify the problems on public asset management of municipality by evaluating the local government asset management
system. The research is limited to the fixed asset of city government of Bandung. The findings will provide information of problems in
implementing municipal asset management that includes asset inventory, asset protection and asset utilization. It will help local government to
improve asset management system so that the municipal assets can be organized and well-managed and contribute to the economy. It will also
provide information for further research on considering the environment and activities of local government asset management system.
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Badan Pemeriksa Keuangan [The Audit Board of The Republic of Indonesia]. 2014, June 3. Aset Rp 3,7 Triliun Bermasalah [Assets of
Rp 3.7 trillion Troubled]. Retrieved October 4, 2016, from http:bpk.go.idnewsaset-rp-37-triliun-bermasalah
Badan Pemeriksa Keuangan [The Audit Board of The Republic of Indonesia]. 2015. Ikhtisar Hasil Pemeriksaan Semester I Tahun
2015 [The First Semester Report of 2015]. Indonesia, Jakarta: BPK. Badan Pemeriksa Keuangan [The Audit Board of The Republic of
Indonesia]. 2015a. Opini BPK [The Opinion of BPK]. Indonesia, Jakarta: BPK.
Badan Pemeriksa Keuangan [The Audit Board of The Republic of Indonesia]. 2016. Ikhtisar Hasil Pemeriksaan Semester II Tahun
2015 [The Second Semester Report of 2015]. Indonesia, Jakarta: BPK.
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Badan Pemeriksa Keuangan [The Audit Board of The Republic of Indonesia]. 2016a. Laporan Hasil Pemeriksaan atas Laporan
Keuangan Pemerintah Kota Bandung Tahun 2015 [The Report on Financial Statement of City Governmernt of Bandung Year 2015].
Indonesia, Bandung: BPK.
Davis, J. 2007. What is asset management and where do you start?. American Water Works Association. Journal, 9910, 26.
Fernholz, F., Fernholz, R. M. 2007. A Toolkit for Municipal Asset Management. Duke University, March.
Grubišić, M., Nušinović, M., Roje, G. 2009. Towards efficient public sector asset management. Financial theory and practice, 333, 329-
362. Hanis, M. H., Trigunarsyah, B. and Susilawati, C. 2010. Public Asset
Management Framework for Local Governments: Opportunities and Challenges for Public Asset Managers. Proceedings in 2nd
International Postgraduate Conference on Infrastructure and Environment, 1-2 June 2010, The Hong Kong Polytechnic University,
Hong Kong.
Hanis, M. H., Trigunarsyah, B. and Susilawati, C. 2010a. Elements of Public Asset Management Framework for Local Governments in
Developing Countries. Proceedings in 8th International Conference on Construction and Real Estate Management ICCREM 2010, 1-3
December 2010, Royal on The Park Hotel, Brisbane.
Kaganova, O., Nayyar-Stone, R., Peterson, G. 2000. Municipal Real Property Asset Management: An Application of Private Sector
Practices. The World Bank, Land and Real Estate Initiative, Urban Local Government, 12.
Kaganova, O., Akmatov, A., Undeland, C. 2008. Introducing more transparent and efficient land management in post-socialist cities:
Lessons from Kyrgyzstan. International Journal of Strategic Property Management, 123, 161-181.
Kaganova, O., Rutledge, C. R. E., Dragana Markovic, K. B. 2012. Guidebook on real property asset management for local
governments. Washington, DC: Urban Institute. Kaganova, O. 2012a. Managing Government Capital Assets in the State of
California: What Can Be Learned from Other Governments? Testimony for Little Hoover Commission, January.
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Kaganova, O. and Kopanyi, M. 2014. Managing Local Assets. In Farvacque- Vitkovic, C. and Kopanyi, M. Eds.. Municipal Finances A Handbook
for Local Governments. Washington, DC: The World Bank. Mahmood, M. N., Dhakal, S. P., Brown, K., Keast, R., Wiewiora, A. 2014.
Asset management policies and guidelines of different states in Australia:
a comparative
analysis. Journal of
Facilities Management, 123, 286-302.
Peraturan Pemerintah Nomor 27 Tahun 2014 tentang Pengelolaan Barang Milik Daerah [Government Regulation Number 272014 on State
and Local Government Asset Management]. Peraturan Menteri Dalam Negeri Nomor 19 Tahun 2016 tentang Pedoman
Pengelolaan Barang Milik Daerah [Regulation of the Ministry of Home Affairs Number 192016 on Guidance for Local Government
Asset Management]. Rymarzak, M., Trojanowski, D. 2013. Asset Management of the Public
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Terhadap Kualitas Laporan Keuangan Pemerintah di Kabupaten Tapanuli Selatan [Factors Affecting Asset Management Post-
Redistricting and Its Effect on Quality of Government Financial Statements in South Tapanuli]. Jurnal Ekonomi dan Bisnis, 101. 47-
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Management Collaborative Group. The Auditor General for Local Government. 2015. Asset Management for
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Management Guide for Local Agencies in Michigan. Cambridge Systematics, March.
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THE INFLUENCE OF ASSET MANAGEMENT TO LOCAL REVENUE OPTIMIZATION: CASE STUDY IN BEKASI CITY GOVERNMENT
Muhammad Irvan Widya irvanwazzagmail.com
1,2
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Aceh Province
2
Student of Master of Management Program, Faculty of Economics and Business, Universitas Padjadjaran
Abstract Purpose:
This study aims to analyze the influence of asset inventory, asset legal audit, asset valuation, and asset monitoring and control to Bekasi City
Government’s local revenue optimization. Design methodology approach:
This research is a correlational study with its aims to present the influences of asset inventory, asset legal audit, asset valuation, and asset monitoring
and control to Bekasi City Government’s local revenue optimization. The sample research is taken by purposive sampling method. Research
population includes the people who directly charged and involved in Bekasi City Government asset management and local revenue services.
Expected findings: The hypothesis developed in this study include: asset inventory positively
influences local revenue optimization, asset legal audit positively influences local revenue optimization, asset valuation positively influences
local revenue optimization, and asset monitoring and control positively influences local revenue optimization.
Practical implication: The result is expected to be useful as a reference for Bekasi City
Government in making decision on asset management, and as a literature on asset inventory, asset valuation and legality for realizing good asset
management in local government. Originality value:
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Research on the influence of asset management to Bekasi City’s Government Local revenue Optimization has never done before, so this
study acts to explain the problems on the asset management or local revenue optimization.
Keywords: Asset management, asset inventory, asset legal audit, asset valuation, asset monitoring and control, local revenue optimization.
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RESEARCH BACKGROUND
The enactment of Act Number 22 of 1999 on Local Government and Act Number 25 of 1999 on Financial Equalization between the Central
Government and Local Government which was later changed to Act Number 32 of 2004 and later changed to Act Number 23 of 2014, and Act
Number 33 of 2004 is the basic system of Indonesia local government in order to realize a good governance. These changes led to the
implementation of decentralization or regional autonomy which is real, and responsible Arifin et al. 2003.
Regional autonomy requires local government to work independently to be able to improve the welfare of their respective regions through utilization
and management of resources in order to establish local wealth. Financial equalization between the central government and local government aims
to support funding submission to the government affairs over areas under the law of local government. Financial Equalization in this case is financial
equalization between central government and local government which is proportional, transparent, fair, and democratic, having regard to the
conditions and needs of the region. Financial resource owned by local government include local revenue,
equalization fund, non-tax revenue, grants from inside andor outside the country, and other revenue which considered as valid. Local revenue is the
regional income sourced from the local tax, separated local wealth, and income of other legitimate areas, with its aims to give full authority to the
local government to obtain funding in the implementation of regional autonomy in establishing good governance.
Local revenue as an income source has previously given less attention, due to the dependence of local government to the central government or from
other sources to obtain funding. Regional development fund sources mostly retrieved from the central government, while the authority that
works for local governments in regulating the use of these funds is relatively limited. With the establishment of regional autonomy system,
local government should be able to make local revenue as an income and funding for the region in order to build the welfare of its region more
independently.
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Local government can optimize its local revenue by optimizing the local asset management that is currently idle and evaluate the assets that are
considered inefficient that absorb operation and maintenance costs. Regional autonomy system is established to build local governments’
authority which allows the optimization of resources, for example through asset management. The common problem experienced by local
government in asset management is undisciplined administrative system. It results difficulties in the management of asset inventory.
Bekasi is a city in West Java province with the area of about 210.49 km
2
. With this large area, Bekasi City Government must be able to manage the
asset inventory. While in reality, Bekasi City Government does not have a good asset management. Problems that arise still dominated by the
negligence in the administration of asset management. Another problem faced by Bekasi City Government is less optimal local
revenue. Although local revenue increased annually, but with the amount of grants per year and area potential, the local revenue should also be
more optimized.
LITERATURE REVIEW Asset
According to the Government Regulation Number 71 of 2010, asset is economic resource owned andor controlled by the government as a result
of past events and will give economic andor social benefits in the future, either by the government or the society, and can be measured using units
of money, including the resources required for the provision of non-finance services for general public and resources being maintained for historical
and cultural importance. Accounting Concepts No. 4, The Australian Accounting Standards Board
AASB defines asset as potential economic benefits or services controlled by the reporting entity as a result of past transactions or other past events.
According to Weygandt 2007:11-12 asset is resources over the business, with its common characteristic is to provide services or benefits in the
future.
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From the definitions above, it can be concluded that asset is resource owned and orcontrolled by organizationsinstitutions as a result of past
events or transactions and will give benefits in the future. Asset Management
According to Government Regulation Number 6 of 2006 which was later changed to Government Regulation Number 38 of 2008 on Government’s
Goods Management and Minister of Home Affairs Regulation Number 17 of 2007 on Technical Guidelines of Government’s Goods Management,
asset management is not only about administrative aspect, but include the handling of government asset, increase in efficiency, effectiveness and
create added value in asset management. The scope of government asset management includes needs and budget plan, procurement, deployment,
utilization, security and maintenance, valuation, removal, transfer, administration, coach, monitor and control.
According to Siregar 2004:518-519 there are several stages of asset management that can be done to enhance owned assets i.e. assets
inventory, legal audit, asset valuation, asset optimization, and asset monitoring and control . If all five stages of asset management conducted
properly, it will provide great benefits for the government in improving the efficiency, effectiveness and create added value in asset management that
conducted in orderly, transparent and accountable manner. Asset management has been examined in various studies at local
government level. Lewes District Council 2005:2 says that the purpose of asset management plan is as follows:
1. Ensure the effectiveness and coordination of asset management
activity drafted by the government. 2. Supervise the use of funds in the process of management and usage of
property asset. 3. Ensure that asset management issues have been discussed in the
meetings of decision-making as the basis for the preparation of service plan.
4. Understand the limitations of the effective, efficiency and economic conditions as the consideration of setting up asset management.
5. Establish asset management cooperation with third parties or other organizations that are able to meet the needs of the society.
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Mather 2003 explains that asset management is very complex and has a specific area. Therefore, it is necessary to understand the basic principles
in performing asset management by working with people who have good understanding about asset management. Then ultimately make right
decision and strategy in asset management, that is: develop, apply, and arrange the maintenance strategy of asset management.
According to Hastings 2010, asset management is a series of activity related to:
1. Identify the asset’s needs;
2. Identify the fund needs;
3. Obtain asset;
4. Providing logistics and maintenance support system for asset; and
5. Remove or renew asset so that it can effectively and efficiently
achieve the objective. HDR 2010 in Baird, Gregory M 2011 describes asset management as a
systematic process for obtaining the maximum value of physical asset. According to Brintton, et al. 1989, asset management is the management
empowerment and development of asset related to its efforts to maximize the value or benefit of asset value-added and value-in-use
either financial or non-financial; and at the same time minimizing the risk on an ongoing basis which is called optimization productivity of asset.
According to Weston and Copeland 2001, asset management and investment is to measure the effectiveness of the companys investment
decisions and the utilization of its resources. While according to Weston and Brigham 2001, it is to measure how effective a company manages its
asset, which is designed to find out types of asset in the company; whether it is appropriate, too high or too low, given the goal in the future.
Goulburn-Murray Water in Moorhouse, Ian 1999, defines asset management as a systematic and structured combination between
management, finance, economic, and engineering applied in physical asset throughout life with the objective of maximum service with effective cost.
According to Surminah 2008, asset management is a management system or a functional unit that operates a set of resources human resource,
money, time, goods, machine and a set of instruments methods,
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standardcriteria to reach the objective. Asset management will become an essential aspect related to the availability, quality, efficiency,
sustainability and environmental safety of physical assets owned by the company.
Inventory According to the Regulation of the Minister of Home Affairs Number 17 of
2007 on Technical Guidelines of Government’s Goods Management mentions that inventory is an activity or action to do the calculating,
maintaining, organizing, settings, data recording and reporting the usage of assets. Asset inventory is all goods ownedcontrolled by the local
government to work with more than one year, recorded and listed in inventory book.
According to Siregar 2004, asset inventory consists of two aspects, physical aspect and juridicallegal aspect. Physical aspect consists of space,
location, volumequantity, type, address and others, while juridical aspect deals with the status of ownership, legal aspects, and ownership period.
Inventory process is conducted by the registration of labeling, cluster, and asset management administration.
Legal Audit According to the Regulation of the Minister of Home Affairs Number 17 of
2007 on Technical Guidelines of Government’s Goods Management, legal audit is a security or control action, goods management in an attempt to
reform the area in terms of physical, administrative and legal action. It focuses on the policing of security in terms of physical and administration,
so that the goods can be usedutilized optimally and avoid the takeover or claims from other parties.
Valuation According to the Regulation of Minister of Home Affairs Number 17 of
2007 about Technical Guidelines of Government’s Goods Management, valuation of local government goodsassets carried out by: preparation of
balance sheet, utilization of local government and the possession takeover. Implementation of the local government goodsassets valuation carried
out by teams appointed by the mayor and may involve with independent agency.
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According to Siregar 2004, asset valuation is a process to assess controlled assets. Therefore, local government can outsource professional
and independent assessment consultant. The result will be used to find out the value of wealth as well as information for the determination of the
asset to be sold. Monitoring and Control
According to the Regulation of Minister of Home Affairs Number 17 of 2007 on Technical Guidelines of Government’s Goods Management,
monitoring and control of local government’s goods conducted to ensure that the management of local government goodsassets done effectively
and efficiently. Monitoring is an effort or activity to ensure that every action conducted in the right way. Control an activity to find out and assess
the actual fact about the implementation of tasks andor activities, whether carried out in accordance with the regulation.
According to Schermerhorn Friday in Ernie and Saefullah 2005:317, monitoring is a process of measurement that can support the achievement
of the expected results in accordance with the predetermined goal. Meanwhile, according to Terry in Sujamto, 1986:17, monitoring is to
determine what has been achieved, evaluation, and take corrective action to ensure that the result is in accordance with the plan.
According to Randy R. Wrihatnolo and Riant Nugroho Dwijowijoto 2006, control is an act of surveillance that accompanied the corrective action.
While according to Mulyadi 2007, control is an attempt to achieve a particular goal through expected behavior.
According to J. M. Juran 1995:165, control is management process to evaluate the performance, compare performance with goals, and take
action against difference. While according to Armand V. Feigenbaum 1991:10, control is the process of delegation of responsibility and
authority in order to strengthen and guarantee the achievement of customer satisfaction.
Local Revenue Optimization
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According to Great Indonesian Language Dictionary Depdikbud, 1995:628, optimization is derived from ‘optimal’ which means the best, highest,
whereas optimization means the process of elevating or improvement. While according to Act Number 32 of 2004 on Local Government, local
revenue is regional income sourced from local tax, local retribution, result of local wealth management, and other legitimate local income.
RESEARCH METHOD
This research is a correlational study with its aims to present the influences of asset inventory, asset legal audit, asset valuation, and asset monitoring
and control to Bekasi City Government’s local revenue optimization. The research object is data acquired by the investigation. The research
subject consists of independent variable of Assets Management X and dependent variable of Local Revenue Optimization Y. Research
population includes the people who directly charged and involved in Bekasi City Government asset management and local revenue services. This
research is conducted at Bekasi City Government. Data Source and Data Collection Techniques
Data source, according to Sanusi 2011: 104, is the point of data origin. Based on that notion, the data is classified into two categories:
1. Primary data
The primary data in this study obtained by questionnaires and interviews which consist of questions about the variables assets
management, and local revenue optimization. 2. Secondary Data
The secondary data obtained from a variety of references, articles, journals, scientific publications, and documentation of the company
related with asset management, and local revenue optimization. Research Results Expectation, Limitation and Originality
The result is expected to be useful as a reference for Bekasi City Government in making decision on asset management, and may add
knowledge about asset inventory, valuation and legality in order to realize good asset management in local government.
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In this study, the researcher only investigated one variable that influence local revenue optimization: asset management. Theoretically, there are
other variables. Therefore, we need more research on other variables that affect local revenue optimization conducted by Bekasi City Government or
other researchers. The difference between this study with some previous researches is in the
aspect of the research object and period. This kind of research has not been done at Bekasi previously, so this study is able to explain the
influence of asset management to local revenue optimization in Bekasi City Government.
REFERENCES
Agustina, Maria, 2005, Manajemen Aset Tanah dan Bangunan Pemerintah Daerah Studi Kasus di Kabupaten Pontianak, Tesis S-2
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THE IMPLEMENTATON OF BANDUNG AND SURABAYA E-GOVERNMENT AND THEIR KEY SUCCESS FACTORS
Hanif Rahmatullah hanifrahmatullahgmail.com
1,2
,
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, City of Gorontalo
Silvia Herera silvia.herera
1,2
1
Internal Auditor at Finance and Development Supervisory Agency Badan Pengawasan Keuangan dan Pembangunan, Republic of Indonesia BPKP, Ternate, North Maluku
Province
2
Students of Master of Management Program, Faculty Of Economics and Business, Universitas Padjadjaran
Abstract Purpose
This study aims to evaluate the e-government’s implementation in both cities based on indicators that have been set by Liu 2010 using variable
contents, functions and construction indexes and determines five keys success factors developed by khalil et al 2001. The First section will
describe the background problems, followed by a discussion of the government in Indonesia, refers to Bandung and Surabaya at the second
section. The Third section explains the local government itself and the model of e-government implementation at the fourth section. Research
questions will be at the fifth section and the remaining section will discuss findings and conclusion of the study.
Design methodology approach The comparison of two cities will be based on framework of e government
evaluation using web content analysis method. Meanwhile, the determination of their keys success factors will use the five elements by
Khalil et al 2002. Expected Finding
This study are expected to create deeper understanding of the e government implementation level both in Bandung and Surabaya and how
the way they achive that success. Practical Implication
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The findings of this study not only can be used to develop the existing e- government system both in Bandung and Surabaya but also can be used
for consideration of the other municipal city government to adopt and implement the best practice.
Originality Value This study refers to the key success factor of e-government
implementation on both local governments which can be a benchmark to other local governments in Indonesia while the previous research discusses
the implementation of e-government on the city in certain countries.. Keywords: e-government, key success factor, and local government.
179
RESEARCH BACKGROUND
The use of E-Government is a must and can’t be avoided by the local government in Indonesia, considering the low service quality and
transparency in good governance’s implementation. The e-government’s implementation data according to UN Survey 2016, ranks Indonesia on 116
of 193 countries, below Malaysia, Vietnam, Singapore and Brunei. It can describe how the bureaucracy reformation, refer into efficiency and
excellent service to the citizen of Indonesia, has not run yet. According to the United Nations, e-government has an important role for
the developing country to make local government services more accessible, more convenient, and more responsive to people with
disabilities and to make government more open, more accountable and inclusive.
E-Government Implementation in Indonesia begins with the presidential instruction No. 9, 2003 concerning into the establishment of Coordination
Indonesian Telematics Team TKTI. This team is responsible to coordinate and encourage the development of ICT among government, business, and
society, and also encourage them to commit in order to increase the use of ICT for better development. Refers to the instruction, some local
governments start to adopt and implement ICT even without standardization from central government Nurdin et. al, 2012; 6.
Based on Nurdin et. al 2012; 5, from 353 districts in Indonesia, most local governments are still at the stage of emergence, which is the e-
government’s implementation is still a website creation that addressed to answer the needs of the citizen. Moreover, the same study found that 61
local government has reached the phase of Interaction. In this phase, City of Bandung and Surabaya are the most prominent local government and
become a benchmark in the E-Government’s implementation for other regions. Recently 40 local government reported signing to adopt
Surabaya’s e-government. Similarly, Bandung e-government’s system has been adopted or donated by 22 cities in Indonesia.
Benchmarking is defined as a process whereby an organization evaluates its operations by comparison to similar organizations Mosse Whitley,
2009. Previous research indicates that e-government in developing
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country has reached the early stages, as well as Indonesia, which according to BAPENAS are at the initial phase of e-government and there’s only one
city categorized in transactional phase. This study aimed to evaluate the e-government’s implementation in both
cities based on indicators that have been set by Liu 2010 using variable contents, functions and construction indexes and then specify the key
success factors both in Bandung and Surabaya.
LITERATUR REVIEW
E- Government E-Government is a global phenomenon occurring in developed and
developing countries. The implementation of e-Government has become the main goals of many countries around the worlds nowadays. E-
Government implementation is not straightforward and not simply introducing web-based technologies to government.
According to UN Survey 2016, e-government can be referred as the use and application of information technologies in public administration to
streamline and integrate workflows and processes, to effectively manage data and information, enhance public service delivery, as well as expand
communication channels for engagement and empowerment of people. However, World Bank refers it to government agencies’ use of information
technologies such as Wide Area Networks, the Internet, and mobile computing that have the ability to transform relations between citizens,
businesses, and other arms of government. These technologies can serve a variety of different ends: better delivery of government services to citizens,
improved interactions with business and industry, citizen empowerment through access of information, or more efficient government management.
The results can be less corruption, increased transparency, greater convenience,
revenue growth
andor cost
reductions. http:www.worldbank.org
b. E-Government Goals in SDGs Achieving
Sustainable Development
requires transparency
and accountability of institutions that can be enhanced by opening up
government data. Open Government Data is a new approach that can help
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public sector institutions to improve the quality of their decision-making processes and of public services. Open Government Data refers to
“government information proactively disclosed and available online for everyone’s access, reuse and redistribution without restriction”United
Nations, 2014a, p.163. According to UN Survey 2016, Open government data as a transparency
and accountability measurement of E- government that has several roles according to Sustainable Development Goals SDGs such as:
1. End poverty in all its forms everywhere by providing online
