Determinants of local government capital expenditure in Indonesia: Fiscal capacity, local revenue, and BPK’s audit opinion
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Published:
Jun 30, 2026
Keywords:
BPK Opinion, Capital Expendituress, Fiscal Capacity Index, Fiscal Decentralization, Local Revenue
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Abstract
Differences in fiscal capacity, local revenue, and financial accountability may contribute to variations in capital expenditure allocation among Indonesian local governments. Understanding these factors is important because capital expenditure supports public infrastructure provision and long-term regional development. This study examines the effects of the Fiscal Capacity Index (FCI), Local Own-Source Revenue (LOSR), and BPK audit opinion on capital expenditure. A quantitative explanatory approach was employed using secondary data obtained from the Ministry of Finance of the Republic of Indonesia and BPK audit reports. The sample comprises 542 local governments observed from 2021 to 2023, resulting in 1,626 panel observations. Panel data regression analysis was used to estimate the relationships between the explanatory variables and capital expenditure. The findings indicate that the Fiscal Capacity Index has a positive and significant effect on capital expenditure. Local Own-Source Revenue also has a positive and significant effect and exhibits the largest coefficient, suggesting that fiscal autonomy plays the strongest role in explaining capital expenditure allocation. In contrast, BPK audit opinion has a negative but statistically insignificant effect on capital expenditure. Overall, fiscal capacity and local revenue are significant determinants of capital expenditure allocation, whereas BPK audit opinion is not significantly associated with capital expenditure among Indonesian local governments.
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How to Cite
Hasanah, M., Furqan, A. C., Muliati, M., & Erwinsyah, E. (2026). Determinants of local government capital expenditure in Indonesia: Fiscal capacity, local revenue, and BPK’s audit opinion. Indonesia Auditing Research Journal, 15(2), 267–277. https://doi.org/10.35335/arj.v15i2.711
References
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Oates, W. E. (1999). An essay on fiscal federalism. Fiscal Federalism and European Economic Integration, XXXVII(September), 13–47. https://doi.org/10.4324/9780203987254
Pratama, A., & Ariza, A. (2024). Dampak belanja modal, pertumbuhan ekonomi dan upah minimum terhadap indeks pembangunan manusia Kabupaten Sekadau. EKOMA: Jurnal Ekonomi, Manajemen, Akuntansi, 3(5), 1338–1350. https://doi.org/10.56799/ekoma.v3i5.3769
Primadi, F. R., Putra, W. E., & Gowon, M. (n.d.). The Impact of Regional Original Income, Balancing Funds, and Fiscal Stress on Capital Expenditures and Regional Government Financial Performance. Jurnal Ekonomi, Teknologi Dan Bisnis, 3(6). https://doi.org/10.57185/jetbis.v3i6.117
Primadi, F. R., Putra, W. E., & Gowon, M. (2024). THE IMPACT OF REGIONAL ORIGINAL INCOME, BALANCING FUNDS, AND PERFORMANCE, FISCAL STRESS ON CAPITAL EXPENDITURES AND REGIONAL GOVERNMENT FINANCIAL. Journal of Economics, Technology and Business (JETBIS), 3(6), 305–319.
Putri, A. S., Muchtolifah, M., & Sishadiyati, S. (n.d.). Analisis pengaruh pendapatan asli daerah, dana alokasi umum, dan dana alokasi khusus terhadap belanja modal. Jambura Economic Education Journal, 3(2), 85–92.
Putri, A. S., Muchtolifah, & Sishadiyati. (2021). ANALISIS PENGARUH PENDAPATAN ASLI DAERAH, DANA ALOKASI UMUM, DAN DANA ALOKASI KHUSUS TERHADAP BELANJA MODAL. Jambura Economic Education Journal, 3(2), 85–93. https://doi.org/https://doi.org/10.37479/jeej.v3i2.10985
Rusdiyantoro, I., & Simanjuntak, R. A. (2022). Kesinambungan Fiskal Indonesia Pada Masa Krisis Covid-19. Jurnal Pajak Dan Keuangan Negara (PKN), 4(1), 20–29.
Samto, Maftuhannisak, Yani, & Jamil, M. S. (2025). Pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU), dan Dana Alokasi Khusus (DAK) terhadap Belanja Modal di Kota/Kab Provinsi Jawa Tengah (Periode 2021-2023). Jurnal Ekonomi Bisnis Dan Akuntansi (JEBAKU), April. https://doi.org/https://doi.org/10.55606/jebaku.v5i1.5369
Suandani, K. P., & Astawa, I. G. P. B. (2021). Pengaruh Opini Audit, Belanja Modal, Pendapatan Asli Daerah, Dan Dana Perimbangan Terhadap Kinerja Keuangan Pemerintah Kabupaten/Kota Di Provinsi Bali Tahun 2015-2019. Jurnal Ilmiah Mahasiswa Akuntansi) Universitas Pendidikan Ganesha, 12(03), 2614–1930.
Subagyo, Sirat, A. H., & Suwito. (2021). The Effect of Audit Results and Local Characteristics on Financial Performance of Province Governments in Indonesia. Research Journal of Finance and Accounting, 12(14), 57–65. https://doi.org/10.7176/rjfa/12-14-06
Widodo, S. (2020). PENGARUH INDEKS KAPASITAS FISKAL (IKF) DAN INDEKS RUANG FISKAL (IRF) TERHADAP DANA PERIMBANGAN TAHUN 2015-2020 PADA 122 KABUPATEN DAERAH TERTINGGAL DI INDONESIA. JURNAL BUDGET, 5(1), 30–46. https://doi.org/https://doi.org/10.22212/jbudget.v5i1.34
Zulkarnain, Z., & Andriansyah, R. (2018). Opini Audit BPK-RI dan Substansi Kinerja Keuangan Pemerintah Daerah Kota/Kabupaten di Provinsi Kalimantan Barat. Cakrawala Repositori IMWI, 1(1), 58–74. https://doi.org/10.52851/cakrawala.v1i1.6
Erwinsyah, Zahra, F., Meldawati, L., Karim, F., Saleh, F. M., & Masruddin. (2025). Meningkatkan Akuntabilitas dan Transparansi Pengelolaan Keuangan Desa dengan E- Government. Jurnal Abdidas, 6(1), 142–150. https://doi.org/10.31004/abdidas.v6i1.1118
Furqan, A. C., Wardhani, R., Martani, D., & Setyaningrum, D. (2020). The effect of audit findings and audit recommendation follow-up on the financial report and public service quality in Indonesia". International Journal of Public Sector Management, 33(5), 535–559,. https://doi.org/https://doi.org/10.1108/IJPSM-06-2019-0173
Furqan, A. C., Wardhani, R., Martani, D., & Setyaningrum, D. (2021). Financial reporting , public services and local executives ’ re-electability in Indonesia Financial reporting , public services and local. Cogent Business & Management, 8(1). https://doi.org/10.1080/23311975.2021.1939229
Hidayat, T. (2024). PENGARUH DANA ALOKASI UMUM, PENDAPATAN ASLI DAERAH, DAN KINERJA KEUANGAN TERHADAP BELANJA MODAL JAWA BARAT. Jurnal Akuntansi Bisnis Pelita Bangsa, 9(1), 105–115. https://doi.org/https://doi.org/10.37366/akubis.v9i01.1818
Himawan, H. S., Mubarok, A., Wahyuni, E., Sari, E. E., & Sukmawati, E. (2024). Pengaruh Pendapatan Asli Daerah Terhadap Belanja Modal di Indonesia. Balance: Media Informasi Akuntansi Dan Keuangan, 16(1), 9–13. https://doi.org/10.52300/blnc.v16i1.12544
Hobrouw, Y., Suaryana, I., & Asri Dwija Putri, I. (2021). Pengaruh pendapatan asli daerah, belanja modal dan indeks pembangunan manusia. E-Jurnal Akuntansi, 31(2), 401–413. https://doi.org/10.24843/EJA.2021.v31.i02.p11
Ivana, D., Hardiwinoto, & Nurcahyono, N. (2021). Pengaruh Pendapatan Asli Daerah, Dana Alokasi Umum dan Dana Alokasi Khusus Terhadap Belanja Modal. ASSET: JURNAL MANAJEMEN DAN BISNIS, 10.
Jensen, M. C., & Meckling, W. H. (1976). THEORY OF THE FIRM : MANAGERIAL BEHAVIOR , AGENCY COSTS AND OWNERSHIP STRUCTURE. 3, 305–360.
Kurnia, D. (2020a). Pengaruh Temuan Audit BPK atas Laporan Keuangan Pemerintah Daerah, Opini Audit atas Laporan Keuangan Pemerintah Daerah, Tindak Lanjut Hasil Pemeriksaan dan Struktur Anggaran Terhadap Kinerja Pemerintah Daerah. JURNAL REVENUE Jurnal Akuntansi, 01(01). https://doi.org/10.46306/rev.v1i1.11
Kurnia, D. (2020b). Pengaruh Temuan Audit BPK atas Laporan Keuangan Pemerintah Daerah, Opini Audit atas Laporan Keuangan Pemerintah Daerah, Tindak Lanjut Hasil Pemeriksaan dan Struktur Anggaran Terhadap Kinerja Pemerintah Daerah. Jurnal Revenue: Jurnal Ilmiah Akuntansi, 1(1), 112–124. https://doi.org/10.46306/rev.v1i1.11
MULIATI, M., MAYAPADA, A. G., PARWATI, N. M. S., RIDWAN, R., & SALMITA, D. (2021). Does Audit Matter in Earnings Quality of Indonesia Banks? Journal of Asian Finance, Economics and Business, 8(2), 143–150. https://doi.org/10.13106/jafeb.2021.vol8.no2.0143
Nuraeni, S., Nurhasanah, N., & Kosasih, K. (2024). Pengaruh rasio kemandirian keuangan daerah dan rasio efektivitas PAD terhadap belanja modal. Gorontalo Accounting Journal. https://doi.org/https://doi.org/10.32662/gaj.v7i2.3482
Nurhalimah, M., & Wicaksono, D. (2024). PENGARUH OPINI AUDIT BPK DAN BELANJA MODAL TERHADAP KINERJA KEUANGAN PEMERINTAH DAERAH. AKRUAL Jurnal Akuntansi Dan Keuangan, 6(1), 78–87. https://doi.org/10.34005/akrual.v6i1.4161
Oates, W. E. (1999). An essay on fiscal federalism. Fiscal Federalism and European Economic Integration, XXXVII(September), 13–47. https://doi.org/10.4324/9780203987254
Pratama, A., & Ariza, A. (2024). Dampak belanja modal, pertumbuhan ekonomi dan upah minimum terhadap indeks pembangunan manusia Kabupaten Sekadau. EKOMA: Jurnal Ekonomi, Manajemen, Akuntansi, 3(5), 1338–1350. https://doi.org/10.56799/ekoma.v3i5.3769
Primadi, F. R., Putra, W. E., & Gowon, M. (n.d.). The Impact of Regional Original Income, Balancing Funds, and Fiscal Stress on Capital Expenditures and Regional Government Financial Performance. Jurnal Ekonomi, Teknologi Dan Bisnis, 3(6). https://doi.org/10.57185/jetbis.v3i6.117
Primadi, F. R., Putra, W. E., & Gowon, M. (2024). THE IMPACT OF REGIONAL ORIGINAL INCOME, BALANCING FUNDS, AND PERFORMANCE, FISCAL STRESS ON CAPITAL EXPENDITURES AND REGIONAL GOVERNMENT FINANCIAL. Journal of Economics, Technology and Business (JETBIS), 3(6), 305–319.
Putri, A. S., Muchtolifah, M., & Sishadiyati, S. (n.d.). Analisis pengaruh pendapatan asli daerah, dana alokasi umum, dan dana alokasi khusus terhadap belanja modal. Jambura Economic Education Journal, 3(2), 85–92.
Putri, A. S., Muchtolifah, & Sishadiyati. (2021). ANALISIS PENGARUH PENDAPATAN ASLI DAERAH, DANA ALOKASI UMUM, DAN DANA ALOKASI KHUSUS TERHADAP BELANJA MODAL. Jambura Economic Education Journal, 3(2), 85–93. https://doi.org/https://doi.org/10.37479/jeej.v3i2.10985
Rusdiyantoro, I., & Simanjuntak, R. A. (2022). Kesinambungan Fiskal Indonesia Pada Masa Krisis Covid-19. Jurnal Pajak Dan Keuangan Negara (PKN), 4(1), 20–29.
Samto, Maftuhannisak, Yani, & Jamil, M. S. (2025). Pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU), dan Dana Alokasi Khusus (DAK) terhadap Belanja Modal di Kota/Kab Provinsi Jawa Tengah (Periode 2021-2023). Jurnal Ekonomi Bisnis Dan Akuntansi (JEBAKU), April. https://doi.org/https://doi.org/10.55606/jebaku.v5i1.5369
Suandani, K. P., & Astawa, I. G. P. B. (2021). Pengaruh Opini Audit, Belanja Modal, Pendapatan Asli Daerah, Dan Dana Perimbangan Terhadap Kinerja Keuangan Pemerintah Kabupaten/Kota Di Provinsi Bali Tahun 2015-2019. Jurnal Ilmiah Mahasiswa Akuntansi) Universitas Pendidikan Ganesha, 12(03), 2614–1930.
Subagyo, Sirat, A. H., & Suwito. (2021). The Effect of Audit Results and Local Characteristics on Financial Performance of Province Governments in Indonesia. Research Journal of Finance and Accounting, 12(14), 57–65. https://doi.org/10.7176/rjfa/12-14-06
Widodo, S. (2020). PENGARUH INDEKS KAPASITAS FISKAL (IKF) DAN INDEKS RUANG FISKAL (IRF) TERHADAP DANA PERIMBANGAN TAHUN 2015-2020 PADA 122 KABUPATEN DAERAH TERTINGGAL DI INDONESIA. JURNAL BUDGET, 5(1), 30–46. https://doi.org/https://doi.org/10.22212/jbudget.v5i1.34
Zulkarnain, Z., & Andriansyah, R. (2018). Opini Audit BPK-RI dan Substansi Kinerja Keuangan Pemerintah Daerah Kota/Kabupaten di Provinsi Kalimantan Barat. Cakrawala Repositori IMWI, 1(1), 58–74. https://doi.org/10.52851/cakrawala.v1i1.6
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