Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
The Effect of Attribution Theory to The
Budgetary Slack*
Rizky Firmansyah1, Rosidi2 & Abdul Ghofar3
1
Student of Master Program of Accounting in University of Brawijaya
Lecturers of Faculty of Economy and Business in University of Brawijaya
*Fully funded By Indonesia Endowment Fund for Education (LPDP Indonesia)
2,3
Abstract: Previous studies about the effect
budgetary participation to the budgetary slack
showed various results. Some researches stated that
budgetary participation affected negatively to the
budgetary slack. However, in other researches, it
stated positive effect. Therefore, this research was
conducted to test about the effect attribution theory
which represented in budgetary participation as
external forces and the understanding of budgetary
regulations (moderator variable) as internal forces
to the budgetary slack. Analysis method that used in
this research was Partial Least Square (PLS) by
using WarpPLS as statistical test instrument. This
research was conducted towards Regional Work
Unit (SKPD-Satuan Kerja Perangkat Daerah) in
Gorontalo Province for 135 people that divided into
two sample qualifications, echelon II and echelon
III. The research result showed that budgetary
participation affected positively to the budgetary
slack. The high budgetary participation was able to
decrease budgetary slack. The understanding of
budgetary regulations played no role as moderator
variable towards the effect of budgetary
participation to the budgetary slack. It showed that
the external forces (budgetary participation) played
more roles in constructing individual behavior
during budgetary process, thus the understanding of
budgetary regulations as internal forces was unable
to strengthen or weaken the effect of budgetary
participation to the budgetary slack.
1.
Budget becomes very important instrument
in conducting the effective short-term planning and
controlling to an organization (Anthony and
Govindarajan, 2001). Budget is needed in
conducting planning and controlling in order to
reach the goal of an organization, including
government organizations or public sectors.
Budgetary arrangement that performed by regional
government aims to know regional government
ability in implementing governmental affairs. This is
what makes budget becomes the most important
instrument in implementing regional government.
Problems which concerned in this case are
individual behaviors in budgetary arrangement
which resulted in budgetary slack. Yuhertiana
(2009) explained that one cause of bad government
performance which becomes important issue is
budgetary slack.
This research, then, raised the problem of
budgetary slack towards regional government.
Budgetary slack occurred due to the difference
between regional potentials or needs with the target
of income and expenditure budget. It indicated by
the behavior of lowering income target to ease the
achievement of regional government budget. It
means that this type of budgetary slack occurred by
individual behaviors to try in arranging budget that
perceived as easier to be achieved and also save
from the budgetary responsibility (Rahim, et al.,
2013; Maskun, 2009; Fitri, 2004).
Budgetary slack indication towards public
sector or Regional Government of Gorontalo
Province in this research can be seen from the slack
between target establishment with realization, either
regional income or expenditure, as presented on
Keywords:
Attribution
Theory,
Budgetary
Participation, The Understanding of Budgetary
Regulations, Budgetary Slack
Component
Income
PAD
Year (in million rupiah)
2012
2011
Target
Introduction
2013
Target
Realization
Target
Realization
636,640
Realization
697,576
913,402
933,170
1,040,798
1,052,555
122,767
158,083
161,639
180,039
195,534
214,614
Imperial Journal of Interdisciplinary Research (IJIR)
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
Expenditure
671,051
491,560
938,402
885,021
1,131,915
1,050,816
465,100
537,473
506,042
419,921
594,441
544,773
Indirect Expenditure
311,595
311,560
466,587
Direct Expenditure
359,457
125,622
471,815
Table 1. Data History of Target and Realization of Budget of Gorontalo Province
participation. This attribution theory can describe
Table 1 shows historical data of Regional
how individual will behave to perform budgetary
Government Budget (APBD-Anggaran Pendapatan
slack that ease in achieving organization target
dan Belanja Daerah) of Gorontalo Province for the
(Lomi Ga, 2011).
last three years. The table above presents that each
The involvement of many parties in
year, budgetary target and realization of Gorontalo
budgetary arrangement will be able to result
Province have the same result, which is lower
communication in the smoothness of budgetary
establishment of income target and higher
arrangement process. Individual participation in
expenditure from its realization, then it can be
budgetary arrangement through communication and
indicated as budgetary slack. Indication in this
created cooperation will have huge effect in
historical data strengthens budgetary slack which
budgetary establishment. The research of
arranged during budgetary arrangement, which is by
Desmiyanti (2009), Onsi (1973), Dunk (1993),
arranging budgetary target that easier to be
Nouri and Parker (1996), Merchant (1985), and
achieved. Regional government fastened on
Kartika (2010) resulted the finding that budgetary
performance achievement, which is higher income
participation affected negatively to the budgetary
realization than target that considered as good
slack. It showed that the higher budgetary
performance. Meanwhile, when expenditure
participation then the lower value of budgetary
realization is lower than target, then it is considered
slack. The large participation in budgeting process
as budget efficiency. That is the cause of
can decrease budgetary slack which means that
participants, in arranging budget, perform easier
budgetary participation can control other individual
budgetary arrangement in order to achieve good
behavior or action, because the function of
performance.
budgetary control gets higher.
The most dominant issue that been studied
Other research that conducted by Djasuli
related to the budgetary slack is budgetary
and Fadilah (2010), Pratama (2013), Mahadewi
participation, which is budgetary arrangement that
(2014), Triadhi (2014), Falikhatun (2007), Young
performed by many parties, both apparatus and
(1985), and Lukka (1988) showed the different
officials in the high and low level. Participants in
result where it showed that budgetary participation
this budgetary arrangement, absolutely, have
affected positively to the budgetary slack. This
different behavior tendency. Based on attribution
finding means that the higher budgetary
theory, individual behavior determined by two
participation, there will be higher budgetary slack.
things, factor from the individual itself (internal
Budgetary arrangement that performed by involving
forces) and factor from the outside of individual
many parties should be able to decrease budgetary
(external forces) (Ikhsan and Ishak, 2005:55). The
slack, because there is less opportunity to conduct
relation with budgetary slack, when there is an
budgetary establishment which purposes to get
opportunity to participate in budgetary arrangement
personal benefit.
as the work standard, then individual mostly
Budget, in Indonesia, arranged based on
perform budgetary arrangement that perceived as
arrangement guidance which contained on Ministry
easier to be achieved (Lukka, 1988). The same thing
of Home Affairs Regulation. Soekanto (1980:118for government organizations or public sectors,
119) explained that law, in this case, becomes very
more specifically when budgetary delivery of
important due to the law will be social engineering,
program, target, and the future achieved budget
which is facility that purposed to change people
determined as indicator in assessing budgetary
behavior as with the goal that been established
implementation success (Lupia and McCubbins,
before. The problem, which raises then, is soft
2000).
development, which is certain laws that been created
Luthans (2005:182) explained about
and established before unable to run effectively.
attribution theory, which is a process towards
When it is related to budgetary slack, it will
individual in interpreting event, reason, or the cause
necessary to know the extent of budgetary
of behavior. It means that, one will tend to behave
regulation understanding from individuals that
based on his/her understanding to the knowledge
involved into budgetary arrangement and budgetary
and environment. It is due to individual behavior
slack.
motivated by the extent of the individual able to
Good
understanding
on
budgetary
affect controller factor in organization, either
regulations should be able to eliminate budgetary
personally or from communication in budgetary
slack. This law aspect, indeed, related to the
Imperial Journal of Interdisciplinary Research (IJIR)
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
behavioral aspects, one of them are budgetary
participation itself, because, as mentioned by
Soekanto (1981:53) that law occupies essential
function in the ease of interaction process, both
among individuals and group due to the behavioral
change in an interaction uses law as its facility.
Soekanto (1980) also explained that in using law as
facility, it needs understanding through the law.
Putri (2010) studied about the resulted
quality of budget by involving regulation as its
moderation variable. Based on her study, the clearer
regulations would improve the effect of motivation
(behavioral factor) to the arranged quality of budget.
Moreover, it was stated that the meaning of
motivation in this case was the degree or level
where the individuals conducted their task
appropriately to reach the established goal. Indeed,
it showed that regulation played role to the
behavioral tendency in arranging budget.
Based on the explanation above, then this
research, as empirical research, tried to re-test the
effect of budgetary participation to the budgetary
slack which still had the difference among the
previous studies. Besides that, this research also
added understanding of budgetary regulation
variable which tested as moderator variable or, in
other words, whether or not it could moderate the
effect of budgetary participation to the budgetary
slack.
This research contributed to the science
development, mainly to the accounting science of
regional financial budgetary behavior aspect. During
this time, accounting researches which studied about
behavior in budgetary field had various results. This
research raised attribution theory, which is
individual behavior tendency, mainly in budgetary
arrangement, either behaviors from internal forces
or external forces. The research result would
strengthen the implementation of behavioral theory,
especially attribution theory in budgetary process of
government sectors.
The research result could be consideration
material, both for participants of budgetary
arrangement in controlling behavior aspect and for
decision makers, particularly central government.
When individuals, in arranging budget, have
realized the importance of behavior aspect and
understood well about law aspect which related to
the regional budgetary arrangement mechanism,
then those individuals will tend to decrease or avoid
budgetary slack. Central government, as decision
maker in the case of regional budget, can pay more
attention on behavioral aspects from the participants
who involved during budgetary arrangement
process, thus regional budgetary policy will be
improved continually.
Imperial Journal of Interdisciplinary Research (IJIR)
2.
2.1.
Review of Related Literatures and
Developing Hypotheses
Attribution Theory
Fritz Heider, for the first time, developed
attribution theory which explained that individual
behavior determined by internal forces – factors
from the inside of individual – and external forces –
factors from the outside of individual (Ikhsan and
Ishak, 2005:55). This attribution theory is process
about how individuals interpret an event, reason,
and cause over their behavior or action (Luthans,
2005:182). Therefore, in behaving, individuals will
be motivated based on their understanding on the
cause over certain event or environment where they
belong.
According to Luthans (2005), attribution
leads to how one explains the cause of her/his or
other behavior. Attribution is one cognitive process
in drawing a conclusion over the behavioral
rationality. In general, attribution theory consists of
two types, dispositional attribution – which
considers that individual behaviors come from
internal factors such as motivation and personality –
and situational attribution– which considers that
individual behaviors come from external factors or
environment (sociel influence) (Saputra, 2012).
Basically, this theory leads to the
explanation about individual assessment which
relied on what meaning that related to the certain
behavior. Reference towards this theory relied on
how individuals explain the cause of their own or
other behavior whether it comes from internal or
external forces. One behavior may come from
internal forces if the cause over his/her behavior
leads to the individual ability, knowledge, or effort.
While, one behavior may come from external forces
such as fortune, opportunity, and environment
(Robbins, 1996 in Saputra, 2012).
Attribution theory, in this research, leads to
the internal strength of individual, which is about
individual belief about the cause of good or bad
result in his/her life (Chang, et al., 2006). Rotter
(1990) in Saputra (2012) explained about good
control – internal and external control – which is a
level of individuals to the result of their behavior
which relied on their own characteristic. When
apparatus, as the actor of budgetary arrangement,
have paradigm that determinant factors placed on
individual control (internal forces), then the
individuals tend to act or behave optimally which
affect the organization in order to reach the goal that
been established previously. In contrast, when the
paradigm is controller factors placed outside the
organization control (external forces), then the
individuals perceive that they do not have enough
ability to affect organization in order to reach the
targeted goal. Attribution theory, in budgetary
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
arrangement, can determine the direction of
budgetary arrangement actor in which when it tends
to be positive behavior then individuals will try to
avoid budgetary slack, while when it tends to be
negative behavior, or in other words, perceives as
able to do any action in order to reach the goal, then
it tends to create budgetary slack.
2.1.
Budgetary Slack
Budgetary slack very determined by behavioral
factors of individuals due to budget maker is human
who has many perspectives in every action.
Basically, management has chance in performing
action which able to affect budget substance (Dunk
and Nouri, 1998). This chance used by management
side to gain compensation based on the
performance. Management will tend to establish
lower income budget and higher expenditure budget
in order to create easier target to be achieved. In this
case, budgetary slack may be occurred in budgetary
process, which is by arranging lower income budget
than potentials that able to be reached in certain
period (Anthony and Govidarajan, 2001). It is not
only occurred in private sectors, however, it may be
performed by individuals in public sectors. Thus
type of budgetary arrangement behavior becomes
serious problem, because this budgetary slack will
be able to give opportunity towards other frauds
which absolutely unexpected in public service
practice.
Budgetary slack is the difference between
resources that actually needed in implementing the
tasks with larger resource amount which purposed to
the same tasks. Budgetary slack made by arranging
lower income approximation and higher expenditure
approximation from that should be potentials in
certain period (Ikhsan and Ishak, 2005). Budgetary
participation is process of individuals involvement
from many parties – superior to subordinate – in
determining budget for certain year. Budgetary
arrangement of regional government is not only
involved the chief of Regional Work Unit (SKPD),
however, it also involves officers and members
under the chief of Regional Work Unit. Central
government is not involved in the budgetary
arrangement of each Regional Work Unit, however,
the budgetary responsibility still placed on each
regional government. Therefore, each Regional
Work Unit has opportunity to perform behavior
which leads to the budgetary slack.
2.3. The Understanding of Budgetary
Regulations and Law Effectiveness Theory
The
understanding
of
budgetary
regulations, in this research, means skill of
apparatus who perform budgetary arrangement to
Imperial Journal of Interdisciplinary Research (IJIR)
know and understand prevailed regulations of
budgetary arrangement. The understanding of
budgetary regulations represents the extent of
apparatus or budgetary maker to know and
understand the regulations that made as budgetary
arrangement guidance. In every year, budgetary
arrangement made by its guidance based on
Ministry of Home Affairs Regulation, thus the
apparatus should arrange the budget as with the
prevailed regulations.
The understanding about budgetary
regulations aims to realize law effectiveness,
particularly effectiveness towards regulation
implementation
related
to
the
budgetary
arrangement. The case of law effectiveness becomes
one that mostly concerned, especially about
law/regulation effect to the people. Soekanto
(1983:88) explained the core of law effect to the
people means people behavior in the scope of
certain system as with the prevailed law/regulation.
When the people behaviors are appropriate to the
prevailed law, then it can be stated that the law runs
effectively. Individual who implements a rule of
law/regulation should know about the prevailed
law/regulation. Only knowledge over the
law/regulation is not enough, it means that when
individual already known about the law/regulation,
then the next step is the individual needs to
understand that law/regulation. This understanding
involves many aspects, from aspect of law rule
purpose to the benefit for each party that related to
that law rule (Soekanto, 1983:125-126).
2.4.
Research Hypothesis
As mentioned by Leavins et al., (1995) that
behavioral factors in budgetary arrangement has
relationship with budgetary slack. This behavioral
aspect can be represented in the individual
participation towards budgetary arrangement
process. Budgetary participation becomes one factor
that affects budgetary slack (Young, 1985). The
purpose of budgetary participation is to know
individual behavior during the participation process
of budgetary arrangement.
When apparatus, as the actor of budgetary
arrangement, have paradigm that determinant
factors placed on individual control (internal forces),
then the individuals tend to act or behave optimally
which affect the organization in order to reach the
goal that been established previously. However,
when the paradigm is controller factors placed
outside the organization control (external forces),
then the individuals perceive that they do not have
enough ability to affect organization in order to
reach the targeted goal, thus the individuals will
tend to perform budgetary slack that ease them in
achieving organization target (Lomi Ga, 2011).
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Figure 1. Research Conceptual Framework
Research concept framework as explained
above presented on Figure 1. Many studies found
empirical evidence that subordinate participation
would be able to affect effectiveness in budgetary
arrangement, then the individuals involvement
would tend to decrease budgetary slack (Dunk,
1993; Young, 1985). Dunk (1993) and Merchant
(1985) in their research explained that the higher
involvement of individuals in the structure of
budgetary process, the higher participation level that
would lead to the lower budgetary slack. The same
result also stated by Desmiyawati (2009) who
studied about budgetary arrangement in the
Regional Government of Indragiri Hulu Regency.
While, Kartika (2010) and Onsi (1973) stated that
budgetary participation affected negatively to the
budgetary slack.
Other study that conducted by Lukka
(1988) showed that budgetary participation had
positive effect to the budgetary slack. The same
result also mentioned by Djasuli and Fadilah (2010)
who conducted study in public sector and found that
budgetary participation affected positively to the
budgetary slack. It means that the higher budgetary
participation, the higher budgetary slack. This
empirical evidence resulted in inconsistent finding
where it stated previously that high budgetary
participation would be able to decrease budgetary
slack, in the otehr side, it also stated that high
budgetary participation would increase budgetary
slack. Triadhi (2014), Falikhatun (2007), Pratama
(2013), and Mahadewi (2014) conducted re-test
towards the effect of budgetary participation to the
budgetary slack where the result supported Lukka
(1988) and Djasuli and Fadilah (2010) in which the
higher budgetary participation, the higher budgetary
slack.
Individual participation or involvement
during budgetary arrangement process should be
one indicator that able to decrease budgetary slack.
As the explanation of attribution theory that
individual will tend to behave based on the
Imperial Journal of Interdisciplinary Research (IJIR)
experience and knowledge. Therefore, good
cooperation and communication which created from
budgetary arrangement behavior expected to be able
in improving the effectiveness of budgetary
arrangement implementation which represented
through low budgetary slack. It becomes stronger
argument when attribution theory supported by law
effectiveness theory in which every budgetary
decision, absolutely, involves the fulfillment of the
prevailed regulations. Thus, the individuals who
involve or participate in budgetary arrangement
process should know and understand about every
law rule related to the budgetary arrangement itself.
The law rule will run in a good way when
elements that involved to that law scope able to
understand the prevailed law appropriately, it is
called as law effectiveness (Soekanto, 1983). The
research of Subechan et al., (2014) found that
problem which occurred towards budgetary
arrangement in the Regional Work Unit (SKPD)
was
less
understanding
about
budgetary
arrangement rules/regulations. Surjono and Nugroho
(2008)
mentioned
that
underestimate
or
overestimate which affected budgetary efficiency
and effectiveness caused by weak budgetary
planning, thus it needed good understanding by
government implementer about regulations or main
principles of budgetary cycle. Based on the
explanation above, the research hypothesis can be
stated as below:
Hypothesis 1: Budgetary participation affected
negatively to the budgetary slack.
No
Stratification
Population
Sample
1
Chief of Regional
Work Unit
Section Leader
Total
38 people
25 people
166 people
204 people
110 people
135 people
2
Hypothesis 2: The understanding of budgetary
regulations will strengthen the
effect of budgetary participation to
the budgetary slack.
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Vol-3, Issue-3, 2017
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3.
Research Method
3.1.
Data Type and Research Operational
Variable
This research was positivistic research of
explanatory research through hypothesis test which
explained phenomena of relationship among
variables. The research test or analysis used
quantitative approach by using statistical instrument.
The research type was survey research. Data source
that used in this research was primary data. The
Variable
Budgetary
Participation
research instrument was questionnaire which
describes opinion, behavior, experience, or
characteristic of research respondent (subject data).
The research instrument designed related to the
indicator of each research variables–budgetary
participation, behavior of budgetary arrangement
actor, the understanding of budgetary regulations,
and budgetary slack–using 5 Likert scale
measurement. Table 2 showed definition of research
operational variable.
Definition
The extent of individual participation,
either high or middle official, towards
budgetary arrangement process in the
Regional Work Unit
Indicator
- participation in budgetary arrangement
- the effect
establishment
towards
budgetary
- the needs to give opinion or suggestion
The Understanding
of Budgetary
Regulations
Law knowledge and awareness that owned
by individuals who participated in
budgetary arrangement
- budgetary implementation appropriate
with the prevailed regulation
- participant understanding about
policy/regulation in budgetary
arrangement
- compliance towards the regulations
- appropriateness between the achieved
result with the established plan
- budget arranged based on guidance
Budgetary Slack
Income budget is lower than potential that
it should be and expenditure budget is
higher to reach performance and budget
efficiency
- the difference of stated budget and best
estimation
- slack in budgetary arrangement
- budget standard
- expectancy to reach the target
Table 2. Definition of Research Operational Variable
it could be parameter in studying behavioral factors
toward public sectors in Indonesia. Population in
3.2.
Research Sample and Population
this research is Regional Work Unit (SKPD-Satuan
The research object was government of
Kerja Perangkat Daerah) officials in Gorontalo
Gorontalo Province. The reason in selecting
Province with the task and occupational authority
Gorontalo Province was due to this province ever
consist of chief of Regional Work Unit, section
won the award of good financial management, thus
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
leader, and staffs who participated in budgetary
arrangement for 204 people (Regional Employment
Agency of Gorontalo Province). The selection
towards this research subject based on task and
function that owned by research subject as
mentioned on Ministry of Home Affairs Regulation
NO.59 Year of 2007 about The Guidance of
Regional Financial Management in which it has task
and function in budgetary arrangement. Sample
determination in this research used proportional
stratified sampling method, which is selecting
sample by classifying the population into subpopulation first based on certain stratification or
characteristic
(Hartono,
2014:97).
Slovin
formulation used to determine number of sample:
Table 3. Number of Research Population and
Sample
Based on the calculation above, it was
obtained that the research sample was 135 people.
3.3.
Research Data Analysis Method
Method that used in this research was
Partial Least Square (PLS). It is a prediction method
in statistical test which used to know prediction
effect between latent variable to see the relationship
or effect among variables in an equation model.
3.3.1.
Measurement Model Test (Outer Model)
This outer model used to validate research
model that been established previously. Parameters
that used in this outer model are convergent and
discriminant validity (construct validity test) and
construct internal consistency test (reliability)
(Hartono and Abdillah, 2009:58). The steps of outer
model test including construct validity test and
construct reliability test. Construct validity test
performed by outer loading score in the research
model. This validity test conducted in two ways: (i)
convergent validity test which related to the
principle that assessor or indicators from a construct
should have high correlation. Indicator stated as
valid if it meets the requirement that outer loading
score > 0.5 and Average Variance Extracted (AVE)
> 0.5; (ii) discriminant validity test, which
emphasizes more on the principle that different
construct assessors or indicators should not have
high correlation. This assessment based on cross
loading in the other latent variable. If cross loading
score in each indicator of a variable is the highest
than cross loading score in the other latent variable,
then the construct can be stated as valid. Other
method that also may be used in the research is
comparing root score of AVE. If root score of
construct AVE larger than the correlation with the
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whole other constructs, then it can be stated that the
construct has good discriminant validity.
Reliability test performed in order to test
data or instrument consistency. Reliability test, in
this research, used Cronbach Alpha and Composite
Reliability value. Indicator group that used in a
variable construct can be stated as reliable if it has
Cronbach Alpha value > 0.6 and Composite
Reliability value > 0.7 (Hartono and Abdillah,
2009:81).
3.3.2.
Structural Model Test (Inner Model)
Inner model in PLS is a test to evaluate the
relationship between exogenous latent construct and
endogenous latent construct. Inner model assessed
by using R-square test for endogenous latent
variable and Stone Geisser Q-square test for
predictive relevance and path coefficient value and
also p-value. The higher R-square means the better
prediction model in the research model (Hartono
and Abdillah, 2009:62).
In the data analysis through PLS, it is also
included Q-square predictive relevance for research
variable construct. If the value of Q-square > 0, then
the model has predictive relevance value, in
contrast, if the value less than 0, the model has less
predictive relevance.
Hypothesis in this research was tested
using path coefficient value or inner model which
shows significance value (Hartono and Abdillah,
2009:63). Hypothesis test criteria that used in this
research was direct test for hypothesis 1 and 2.
Whether or not the hypothesis confirmed
determined by p-value. If the p-value < 0.05 then the
hypothesis confirmed (with alpha of 5%).
Specifically, hypothesis test defined as follows:
H1: confirmed if p-value smaller than 0.05
H2: confirmed if p-value smaller than 0.05
4.
RESULT AND DISCUSSION
Fit indices model and p-value shows the
result from the three fit indicators of research data,
average path coefficient (APC), average R-squared
(ARS) and average variance inflation factor (AVIF).
P-value explains APC and ARS indicator which
calculated through re-sampling estimation and
bonefferroni like corrections. Those two indicators
are needed, because both of them (APC and ARS)
calculated as average model parameter (Sholihin
and Ratmono, 2013:61).
Evaluation requirement of fit model above
is p-value for APC and ARS should be smaller than
0.05 whicb means significant. Besides that, in
general result, AVIF value should be seen as
multicollinearity indicator. Requirement of AVIF
value should be smaller than 5 (Sholihin and
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Ratmono, 2013:61). Based on output from general
result on Table 4, it showed that APC and ARS
value was 0.346 and 0.642 and both p-value less
than 0.001 or significant. It means that evaluation of
fit model based on APC and ARS had fulfilled.
Then, AVIF value in the output above is 2.187. It
means that evaluation of AVIF value had met the
criteria, which less than 5.
Table 4. Output General Results
Fit
P-value
0.346
<0.001
0.641
<0.001
2.187, Good if < 5
APC
ARS
AVIF
4.1.
from one construct to other construct or called as
cross loading where it shows larger value than other
constructs. Comparison of construct AVE root value
with correlation value among latent variables on
Table 6 shows that it has met discriminant validity
criteria.
Cronbach’s
alpha
0.931
0.904
Notes
PAN
PR
Composite
reliable
0.948
0.929
SA
0.948
0.936
Reliable
PR*PAN
0.962
0.958
Reliable
Reliable
Reliable
Evaluation of Research Construct
Table 7. Output Latent Variable Coefficient
PAN1
PAN2
PAN3
PAN4
PAN5
PR1
PR2
PR3
PR4
PR5
SA1
SA2
SA3
SA4
SA5
SA6
SA7
PAN
PR
SA
0.872
0.879
0.911
0.904
0.859
0.171
-0.163
0.043
-0.034
-0.017
-0.014
0.122
-0.202
-0.024
0.142
-0.006
-0.022
0.226
-0.147
-0.119
-0.075
0.126
0.825
0.827
0.871
0.877
0.848
0.143
0.240
0.057
0.014
-0.258
-0.295
0.119
-0.205
-0.053
0.136
0.109
0.004
0.110
-0.083
-0.064
0.027
0.012
0.743
0.867
0.872
0.864
0.882
0.855
0.866
P
values
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
<0.001
Notes
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Valid
Table 5. Output Combined Loadings and CrossLoadings
Table 5 presents that all indicators have
outer loading score larger than 0.70. Besides that, all
indicators have p-value less than 0.005. Therefore,
as a whole, it could be concluded that statement
items or indicators that used in each research
variable were valid or had met convergent validity
test.
PAN
PAN
0.885
PR
0.149
PR
0.149
0.850
SA
0.676
0.030
0.447
0.013
PR*PAN
SA
0.676
0.447
0.851
PR*PAN
-0.030
Ket.
Valid
0.013
Valid
0.052
Valid
0.052
0.714
Valid
Based on Table 7, it presents that all
statement items or indicators in each research
variable have composite reliability value larger than
0.70 where PAN, PR, and SA obtained value of
0.948, 0.929, and 0.948 respectively. In line with
composite reliability, cronbach alpha value was
larger than 0.70 in each variable. It means that each
indicator/statement item that used as research
instrument had met reliability criteria. Therefore,
evaluation result of research construct showed that
all indicators that used as research instrument was
valid and reliable with validity and reliability level
larger than 0.70.
R-squared
Q-squared
Table 8. Output Latent Variable Coefficients
R-Square (R2) and Q-Square value that
obtained in this research were 0.250 and 0.641. It
could be interpreted that the research model had
feasibility value of 64.10%. Contribution towards
the effect of exogenous variables (including the
understanding of budgetary regulations as
moderation variable) to the endogenous variable in
the research model was 25%. Test model that
resulted in this research as below:
Table 6. Output Average Variance Extracted
(AVE)
The same result for discriminant validity
test which seen from loading value of each indicator
Imperial Journal of Interdisciplinary Research (IJIR)
Dependent Variable (SA)
0.250
0.641
Figure 2. Result of Test Model
4.2.
Hypothesis Test
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
As explained before that to confirm
hypothesis in this research, it used PLS (Partial
Least Square). Hypothesis 1 which formulated in
this research was budgetary participation affected to
the budgetary slack. Based on PLS analysis on
Table 9, p-value showed < 0.001 which means that
it less than 0.05 as the requirement of hypothesis
test. According to the result above, it could be stated
that hypothesis 1 confirmed which means that
budgetary participation affected to the budgetary
slack.
Table 9. Output of Hypothesis Test
Hypothesis in this research previously been
formulated as one tail, means to see the direction
that resulted in the effect of independent variable to
the dependent variable. After it was analyzed,
hypothesis 1 was confirmed. Then, it could be seen
how the effect between budgetary participation and
budgetary slack on path coefficient value. Table 9
presents path coefficient value of budgetary
participation to the budgetary slack which shows 0.671. That negative value means that budgetary
participation affected negatively to the budgetary
slack.
Hypothesis 2 which formulated in this
research was the effect of budgetary participation to
the budgetary slack moderated by the understanding
of budgetary regulations. This hypothesis
formulation viewed the effect of interaction between
budgetary regulations and budgetary participation to
the budgetary slack. Test result on Table 9 shows
that p-value 0.213. This p-value was larger than 0.05
which means that there was no interaction between
the understanding of budgetary regulations and
budgetary participation in affecting budgetary slack.
In other words, the understanding of budgetary
regulations was not moderating variable towards the
effect of budgetary participation to the budgetary
slack. Therefore, hypothesis 2 was unconfirmed.
4.4.
Discussion
Based on the result of hypothesis test above, it could
be stated that budgetary participation affected to the
budgetary slack. Budgetary participation, basically,
is a realization of participation from many parties in
budgetary arrangement as a whole to improve
performance. Table 9 presents the direction of effect
in which budgetary participation affected negatively
to the budgetary slack. It means that high budgetary
participation able to decrease budgetary slack.
It was in line with the statement of Young
(1985) and Dunk (1993) that budgetary participation
was able to affect effectiveness in budgetary
arrangement, thus individuals participation in
budgetary arrangement would tend to decrease
budgetary slack. This research found the same result
or supported the previous studies by Desmiyawati
Imperial Journal of Interdisciplinary Research (IJIR)
(2009), Kartika (2010), Dunk (1993), Merchant
(1985), and Onsi (1973) that budgetary participation
affected negatively to the budgetary slack. It means
that high budgetary participation able to decrease
budgetary slack. As the expectancy of budgetary
participation where the higher budgetary
participation, indeed, would increase controlling
function among individuals in Regional Work Unit,
thus the interests that led to the budgetary slack
would be minimized.
Budgetary
participation
showed
participation from many parties that cooperatively
conduct
budgetary
arrangement.
Budgetary
arrangement which involving many structural
elements in Regional Work Unit (SKPD) would
minimize individual interests then budgetary slack
could be controlled.
Meanwhile, the test result of hypothesis 2
as mentioned above, was unconfirmed. It means that
the understanding of budgetary regulations unable to
moderate the effect of budgetary participation to the
budgetary slack. The research result was in contrast
with the study of Surjono and Nugroho (2008) as
well as Subechan et al., (2014) where the problems
in budgetary arrangement which lead to the
overestimate and underestimate caused by good
understanding about budgetary regulations and
principles by the government implementers. The
purpose of law/regulation is in order to reach law
effectiveness, which absolutely leads to the one
effort to smooth and control budgetary system.
However, the research result found that the
understanding of budgetary regulations was unable
to moderate the effect of budgetary participation to
the budgetary slack. The high or low understanding
of budgetary regulations by apparatus who
participated in budgetary arrangement could not
strengthen or weaken the effect of budgetary
participation in minimizing budgetary slack. It
might be caused by participation of many parties in
Regional Work Unit towards budgetary arrangement
had no more discussion about its technical
formulation, however, it tended to be discussion of
whole program that been arranged previously by
each region or responsible unit (section). The
tendency that there was no interaction towards the
understanding of budgetary regulations and
budgetary participation might also be occurred due
to apparatus who participated in budgetary
arrangement of Regional Work Unit more
emphasized on program and budgetary harmonizing
in each section/unit that been established with the
goal or target that want to be reached by the
Regional Work Unit.
The conference of budgetary formulation in
Regional Work Units presents all work region in
that institutions such as the chief of Regional Work
Unit, section leader, and sub-section. In the
conference of budgetary formulation, there would be
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Imperial Journal of Interdisciplinary Research (IJIR)
Vol-3, Issue-3, 2017
ISSN: 2454-1362, http://www.onlinejournal.in
good communication among each other in
harmonizing program that been planned by each
work unit. In practice, this type of communication
was no more technical in which the budget should
be appropriate with the guidance of budgetary
arrangement. However, it tended to be
communication which led to the program
consultation that appropriate with the goal and target
of Regional Work Unit. It made plenary meeting in
budgetary arrangement more emphasized on
program planning/arrangement. Therefore, the
understanding of budgetary regulation factor from
each individual had no more effect.
Based on attribution theory that raised in this
study, it was found that external forces of individual
was stronger or more dominant. This external
factors (external forces) were cooperation and
communication among individuals as participant of
budgetary arrangement. Each individual who
participated in budgetary arrangement perceived that
their internal ability was unable to affect budgeting
process due to the internal strength that constructed
during the arrangement process through budgetary
plenary meeting. Therefore, internal forces – the
understanding of budgetary regulations – had no
contribution in strengthening the effect of budgetary
participation to the budgetary slack.
6. Conclusion, Limitation and
Suggestion
Conclusion from this research was
budgetary participation affected to the budgetary
slack. The high budgetary participation would
decrease budgetary slack. Budgetary participation
showed the participation from many parties who
cooperatively conducted budgetary arrangement.
Budgetary arrangement which involved many
structural elements in Regional Work Unit (SKPD)
would minimize individual interests, thus budgetary
slack could be controlled. When the understanding
of budgetary regulations included into the test as
moderation variable, the result was insignificant. It
means that the understanding of budgetary
regulations unable to moderate the effect budgetary
participation to the budgetary slack. It showed that
external factors of individual – cooperation or
communication which created in budgetary
arrangement cooperatively – was stronger than
individual ability itself in affecting budgetary
environment.
Limitation in this research was data
collection. The researcher had attempted many
strategies as mentioned in data collection technique
to produce high response rate where the researcher
had designed research data collection regularly –
Imperial Journal of Interdisciplinary Research (IJIR)
such as came directly to the research respondent – in
order to create personal relationship in achieving the
research goal. However, in the implementation, the
researcher unable to determine time of questionnaire
filling and time of questionnaire returning for many
respondents due to many factors such as respondent
occupation as the chief of Regional Work Unit who
absolutely has many tasks and works. Therefore, the
time of questionnaire returning could not be assured
although the researcher did visitation or checking
for many times.
Suggestion
for
government
as
policy/regulation maker, it should be made by a
regulation about the guidance of budgetary
arrangement that can be used each year, thus the
government is not necessary to issue Ministry of
Home Affairs Regulation each year in order to rule
about budgetary arrangement in each region because
it will only create more confusion of apparatus and
will cause the apparatus no more learn and study
about the regulation which issued previously.
Apparatus will consider that the guidance of
budgetary arrangement which issued in each year
same with the previous year.
This research used attribution theory,
which was the understanding of budgetary
regulations that come from internal factors of
individual
(dispositional)
and
budgetary
participation as external factors (situational). The
research result strengthened this attribution theory in
which individuals perceived that they have strong
internal forces, then the individuals would tend to
influence the organization, particularly in the
budgetary arrangement. In contrast, when
individuals perceive that they unable to influence –
in other words, external forces more dominant –
then the individuals would comply to the change
that resulted from external forces. Therefore, the
next research should add variables of external forces
in budgetary arrangement such as organization
culture or leadership. It is due to budgetary
arrangement in governmental or public sector
usually affected by large leadership authority and
supported by organization culture which created in
the governmental environment.
7.
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