Analysis of regional financial performance using the value for money method at the Kediri City government

Abstract

This study analyzes the financial management performance of the Kediri City Government during 2022–2024 using data from the Regional Revenue, Financial, and Asset Management Agency (BPPKAD) of Kediri City. The Value for Money approach covering economy, efficiency, and effectiveness is applied and reinforced with the expenditure composition ratio, regional financial independence ratio, and Locally Generated Revenue (PAD) growth ratio. A quantitative descriptive method was used with secondary data from the Kediri City Government's Budget Realization Reports (LRA) for 2022–2024. Results show the economy level is economical, with ratios of 79.14%, 81.58%, and 82.42%. The efficiency level is inefficient, with ratios of 102.01%, 105.98%, and 103.42%, as expenditure realization consistently exceeded revenue realization. The effectiveness level is effective, with ratios of 105.61%, 101.78%, and 100.38%. Operating expenditure ranged from 86.78% to 89.85% of total expenditure, while capital expenditure ranged from 9.76% to 12.69%. The financial independence ratio is consultative, rising from 28.16% to 34.88%. The PAD growth ratio declined by 27.42% in 2022 before growing 9.98% and 11.01% in the following years. Overall, Kediri City's financial management has fulfilled the principles of economy and effectiveness, although budget efficiency and fiscal independence still require improvement.