Test Coefficient of Determination R

46

E. Operational Variable

1. Original Local Government Revenues Variable X1

According to Bastian 2002 Original Local Government Revenue PAD are revenues consisting of regional tax results, local levies, revenues from the regional corporate income and other legal incomes. PAD in this study can be ascertained from Local Government Expenditures in the realization of the consolidated government budget of 10 districts cities in Lampung from 2008 to 2010. The formula for calculating the PAD, is the following: PAD = Local Tax + Local Retribution + The results of management local separated wealth + other Legal Revenues.

2. General Allocation Funds Variable X2

General Allocation Funds DAU is a general transfer from central government to local governments to address horizontal inequality with the primary purpose is financial equalization capability between regions Halim, 2009. DAU is obtained by looking at the General Allocation Funds DAU account in the realized budget reports of the 10 districts cities in the Lampung province. 3. Local Government Expenditures Variable Y Local Government Expenditures are government expenditures within a certain budget period one year. In order to facilitate the assessment of the reasonability of the costs of programs or activities, expenditures are summarized into expenditure groups, which consist of 47 indirect expenditures and direct spending Halim, 2009. Expenditures in this study can be ascertained from Local Government Expenditures in the consolidated budget realization of district city governments in Lampung province from 2008 to 2010. The allocation of expenditures consists of indirect expenditures and direct expenditures. Indirect expenditures are expenditures that do not have a direct effect to the implementation of government programs and activities and are composed of personnel expenditures, interest expenditures, subsidies, and grants, expenditures for social assistance, financial assistance expenditures and unexpected expenditures. The formula for calculating the allocation of indirect expenditures ABTL is the following: ABTL = office expenditures + interest expenditures + subsidy expenditures + grant expenditures + social assistance + financial assistance expenditures + unexpected expenditures Direct expenditures are expenditures that have a direct effect to programs and activities that include government expenditures, expenditures on goods and services and capital expenditures Puspita sari, 2009. The formula for calculating the allocation of direct expenditures ABL is the following: ABL = office expenditures + goods and services expenditures + capital expenditures.