HOW TO PREVENT FRAUD IN VILLAGE FINANCIAL MANAGEMENT IN KAPANEWON TEMPEL?

ABSTRACT


INTRODUCTION
The economic growth of a village requires regulation and management of economic resources in the village so that it can improve people's welfare.Based on Law Number 6 of 2014 (Law of the Republic of Indonesia, 2014) regarding Villages, it is mandated by the government to allocate village funds which have been budgeted annually in the APBN which are given to each village as a source of village income.The budget sourced from the APBN that is distributed to the village treasury is divided into two distribution mechanisms.First, transfer funds to the regions in stages known as village funds.Second, transfer funds through the District APBD which are allocated 10% by the government to be channeled to the village treasury in stages known as village fund allocations (Widiyarta et al., 2017).
Village funds and village fund allocations are sources of village income whose responsibilities are included in public financial accountability.At present, public financial accountability is vulnerable to potential fraud, so in terms of village fund accountability and village fund allocation fraud can occur in it (Rahimah et al., 2018).Based on data compiled by Indonesia Corruption Watch (ICW) in the 2020 Corruption Case Monitoring Report, ICW noted that there were 676 cases of corruption committed by village officials from 2018 to 2020.The impact of corruption perpetrated by village officials caused a state loss of IDR 111 billion.This figure is in second place for state losses in 2020 after corrupt practices carried out by political clusters, namely members of legislatures and regional heads, amounting to IDR 115 billion.Details of several incidents regarding fraud cases committed by village officials in Indonesia are presented in Table 1 below.If we still see that there are many cases of fraud committed by village officials and even assisted by the local government, then a method is urgently needed to minimize the occurrence of these cases.The central government needs to reformulate the village fund distribution strategy.In addition, we must be very selective about the competence and integrity of village officials.Monitoring participation by the community must be more optimal, a more sophisticated internal control system, and there should also be a whistleblowing facility as a forum for the public to report possible fraud or dishonest activities committed by other people in the workplace.These things can be factors that allow fraud prevention to occur.
The first factor that might influence fraud prevention in managing village finances is the competence of human resources.Competence of quality human resources is needed in managing village finances so that it can prevent delays in carrying out work or in the process of preparing financial reports, besides that time can also be saved, because there is already an understanding of what will be done.In research conducted by (Widiyarta et al., 2017) and (Laksmi & Sujana, 2019) revealed that human resource competence has a significant effect on fraud prevention in village financial management.In contrast to research (Hariawan et al., 2020) and (Huda et al., 2018) stating that human resource competence has no effect on fraud prevention.
The second factor that might influence fraud prevention in managing village finances is morality.According to (Bertens, 1993) morality has a meaning that is basically the same as "moral".Morality is the moral nature/overall principles and Values relating to good and bad.People who have low individual morality will behave differently from people who have high individual morality.It is possible for people who have high individual morality to minimize the tendency for fraud to occur.In research conducted by (Rahimah et al., 2018) and (Jayanti & Suardana, 2019) revealed that morality has a positive effect on fraud prevention in village financial management.Contrary to research conducted by (Njonjie et al., 2019) states that apparatus morality has no effect on fraudulent financial reporting in village financial management.
The third factor that may influence fraud prevention in village financial management is the internal control system.According to (Fadilah, 2011) states that the internal control system has a direct influence on good governance so that it has implications for fraud prevention.However, the internal control system is not without its weaknesses, these weaknesses can be exploited by unscrupulous perpetrators of fraud (Martani & Zaelani, 2011).If the weaknesses of this system are supported by good apparatus morality, then all kinds of fraud can be prevented (Widiyarta et al., 2017) states that the morality of government officials as stated in government ethics has a strong influence on the government's performance.In research conducted by (Atmadja & Saputra, 2017) and (Widiyarta et al., 2017) revealed that the internal control system influences fraud prevention in village financial management.In contrast to research conducted by (Wonar et al., 2018) states that the internal control system has no effect on accounting tendencies.
The fourth factor that may influence fraud prevention in village financial management is whistleblowing.The existence of a whistleblowing system is not only a means of reporting fraud, but also a form of oversight.Employees are afraid to commit fraud because this system can be used for all employees so that fellow employees become aware of each other and are afraid of being reported by other employees for committing fraud.Thus the employee's understanding of the mechanism of whistleblowing makes employees enthusiastic about reporting fraud to the authorities authorized to handle reports because the complaint system includes protection for disclosure of facts.In research conducted by (Hariawan et al., 2020) and (Jayanti & Suardana, 2019) revealed that whistleblowing has a positive effect on fraud prevention in village financial management.In contrast to research conducted by (Mustika Dewi, 2016) revealed that whistleblowing has no effect on the detection of financial statement fraud.These results are in line with research conducted by (Huba, 2021) which states that whistleblowing has no effect on fraud prevention.
Based on the description above, the motivation for this research is that the results of previous studies showed inconsistent results, so this is still interesting to study.Respondents in this study were limited to the village government in Kapanewon Tempel.The researcher wants to test whether there has been an increase in fraud prevention in the village since the corruption case in Banyurejo village funds, Kapanewon Tempel, occurred in 2015 and 2016 which caused state losses of around IDR 633,000,000.00.This research is entitled "How To Prevent Fraud In Village Financial Management In Kapanewon Tempel?".

THEORETICAL FRAMEWORK AND HYPOTHESES Agency Theory
Agency theory according to (Jensen & Meckling, 1976) is a concept of agency relationship (agency relationship) that arises because of the existence of a contractual relationship between principal and agent.The principal is the party that gives the mandate to the agent to carry out all activities on behalf of the principal, in this case, the agent has the capacity as a decision maker.Contractual relationships can work well if the owner will delegate decision-making authority to the manager.The owner of the company (principal) expects the agent to act on their behalf.Managers as agents are given a mandate by shareholders to run a business in the interests of principals, namely in increasing company value and shareholder prosperity, while managers themselves have an interest in increasing the welfare of managers by being oriented towards salaries and commissions (Meli, 2020).
In public sector organizations what is meant by the principal is the people and the agent is the government, in this case the village head and other village officials (Ismail et al., 2016).According to (Marista Dewi & Damayanti, 2019), agents must be accountable for all their work, because individuals who have an attitude of being responsible for the tasks assigned tend not to commit fraud.Therefore, village officials in managing village finances should be properly accountable for village finances and vice versa the community provides compensation with feedback in the form of political trust in the village government.In agency theory, it is known that the agency problem is that there is a difference in interests between the principal and the agent, they will tend to prioritize their personal interests.This results in the agent manipulating the reported performance for their own benefit, so that fraud can occur.

Fraud Triangle Theory
In the Fraud Triangle Theory there are three factors that cause a person to commit fraud.These three factors are described in the fraud triangle.The Fraud Triangle consists of three conditions that generally exist when fraud occurs, namely pressure, opportunity, and rationalization (Karyono, 2013).

Pressure
The urge to commit fraud occurs in employees (employee fraud) and managers (management fraud), this encouragement can occur because 1) Financial pressures, such as a lot of debt, lifestyle that exceeds the limits of ability, greed, and unexpected needs; 2) Bad habits, such as drug addiction or alcohol consumption; 3) Work environment pressures, such as lack of appreciation for work performance, low salary or dissatisfaction with work 4) Other pressures, such as pressure from family, wife/husband to own luxury goods.

Opportunity
Opportunities arise due to weak internal controls to prevent and detect fraud.Opportunities also arise from weak sanctions or an inability to assess the quality of work.In addition, several other conditions are conducive to the occurrence of criminal acts.There are several factors that can increase the opportunity to commit fraud, namely 1) Failure to discipline the perpetrators of fraud; 2) Limited access to information; 3) Lack of audit trail Rationalization Perpetrators of fraud will seek justification such as 1) The perpetrator considers that what is being done is normal/reasonable; 2) The perpetrator feels that he has contributed greatly to the organization; 3) The perpetrator thinks that the goal is good, namely to overcome the problem.This theory can be used as a basis for preventing and detecting fraud.This is because the fraud triangle has been stated to have a strong influence on fraudulent actions, for example determining how to recognize signs of fraud (red flags) through observing attitudes, pressure and perpetrators of fraud, whistleblowing action as a preventive measure to support the detection of fraud in village finances, to reduce opportunity for this to happen.

The Effect of Human Resource Competence on Fraud Prevention in Village Financial
Management (Sugiarti & Yudianto, 2017) explains that human resource competence includes its capacity, namely the ability of an individual, an organization (institutional) or a system to carry out its functions or authority to achieve its goals effectively and efficiently.According to (Hariawan et al., 2020) fraud prevention can be carried out if a person has adequate competence, skills, knowledge and abilities, it will usually be easy to detect fraud.Apparatus competence (HR) is said to be Jurnal Akuntansi ISSN 2303-0356 Vol. 13, No.3 October, 2023 Hal.199-215 adequate if in terms of quantity and quality it will increase the accountability of budget realization reports at the village financial level, so that all accountability can be carried out properly and can avoid fraud (Atmadja & Saputra, 2017).The more competent the human resources, the higher the prevention of fraud in managing village finances.This is supported by research conducted by (Widiyarta et al., 2017) and (Islamiyah et al., 2020a) stating that human resource competence has a significant effect on fraud prevention in managing village funds.Based on the description above, the hypothesis is proposed as follows: H1: Human resource competence has a positive effect on fraud prevention in village financial management

The Effect of Morality on Fraud Prevention in Village Financial Management
According to (Islamiyah et al., 2020a) morality is good/bad action or behavior that comes from within humans.Someone who upholds morality can avoid fraud because individuals who attach importance to morality will tend to obey the norms that apply in accordance with ethical principles (Rahimah et al., 2018).If we instill morality in individuals, it is hoped that it can prevent fraud from occurring.The village government will be able to carry out its duties and responsibilities to the central government properly and correctly in accordance with universal ethical principles so as to prevent fraud.The higher the level of one's moral reasoning, the more likely that person will take the right action, the better in fraud prevention in village financial management.This is in line with research conducted by (Jayanti & Suardana, 2019) and (Atmadja & Saputra, 2017) stating that morality has a positive effect on fraud prevention in village financial management.Based on the description above, the hypothesis is proposed as follows: H2: Morality has a positive effect on fraud prevention in village financial management

The Effect of Internal Control System on Fraud Prevention in Village Financial Management
The Government of Indonesia's Internal Control System (SPIP) adapted in Government Regulation Number 60 of 2008 defines a control environment namely the heads of government agencies and all employees who must create and maintain an environment within the entire organization that creates positive behavior and supports internal control and sound management.Based on the explanation above, it can be concluded that in carrying out village financial management an internal control system is needed.The process of financial management can be directed, supervised and detected if there is a fraud so as to produce reliable financial reports in accordance with applicable regulations.This statement is supported by research conducted by (Laksmi & Sujana, 2019) and (Jayanti & Suardana, 2019) stating that the internal control system has a positive effect on fraud prevention in village financial management.The stronger the internal control system that is implemented, the more it can prevent fraud in village financial management.Based on the description above, the hypothesis is proposed as follows: H3: The internal control system has a positive effect on fraud prevention in village financial management

The Effect of Whistleblowing on Fraud Prevention in Village Financial Management
According to (Islamiyah et al., 2020a) whistleblowing is disclosing/providing information about fraudulent acts that occur in organizations that are carried out by individuals or groups affected by losses to the state or society with the objective of multiplying the common interest and not for personal gain.According to (Purba, 2015), the principle of fraud prevention is the need to establish a mechanism that makes fraud reportable (whistleblowing system) and protection for fraud reporters.Complaints of employees who have been operating can help prevent fraud because individuals may fear that a fraud will be known by other employees and will be complained about.Based on the explanation above, it can be concluded that whistleblowing is not only a channel for reporting fraud that occurs, but also as a form of supervision.The presence of whistleblowing can make employees afraid to commit fraud (fraud).Research conducted by (Widiyarta et al., 2017) and (Islamiyah et al., 2020b) revealed that whistleblowing has a positive effect on fraud prevention in business managers.Village fund claims, this means that the higher the implementation of whistleblowing, the more fraud will be prevented.Based on the description above, the hypothesis is proposed as follows: H4: Whistleblowing has a positive effect on fraud prevention in village financial management Based on the framework described, the conceptual chart of this research framework is illustrated in Figure 1.

Sample
The sampling technique uses the non-probability sampling method, namely the total sample where all members of the population are used as research samples (Sugiyono, 2018).So, the samples are respondents from the 7 villages above.

Variable Operational Definitions
The operational definition of a variable is an attribute or characteristic or value of an object or activity that has certain variations that have been determined by researchers to be studied and then draw conclusions (Sugiyono, 2018).The variables to be tested in this study consist of five variables, namely human resource competence, morality, internal control systems, and whistleblowing as independent variables, and fraud prevention in village financial management as the dependent variable.The following is an operational definition of each variable that will be examined in this study.
1. Fraud prevention (Y) is an activity that includes establishing policies, systems, and procedures that help ensure that the necessary actions have been taken by the board of commissioners, management, and other personnel within the company or organization to be able to provide adequate assurance in achieving organizational goals: namely operational effectiveness and efficiency, reliability of financial reports, and compliance with applicable laws and regulations (Atmadja & Saputra, 2017).2. Human resource competence (X1) is a characteristic that individuals have abilities and are used in a consistent way that aims to achieve a desired performance (Hariawan et al., 2020) 3. Morality (X2) is a good and bad attitude possessed by individuals (Junia, 2016).4. The internal control system (X3) is a process, organizational plans, policies and procedures that are influenced by management that can be used to provide adequate assurance in achieving effectiveness, efficiency, compliance with applicable laws and regulations, and the reliability of presentation of government financial reports (Widiyarta et al. ., 2017). 5. Whistleblowing (X4) adalah suatu usaha yang dilakukan oleh seseorang untuk mengungkapkan atau melaporkan tindak pelanggaran dan kecurangan atau tindakan yang melawan hukum yang terjadi di dalam organisasi atau perusahaan tempat ia bekerja (Widiyarta et al., 2017).
All variables are measured using a 4-point Likert scale ranging from "strongly disagree" at the lower limit of the scale (1) and "strongly agree" at the upper limit of the scale (4).After data collection, it was subjected to quality checks (such as validity and reliability checks) and then to hypothesis testing.Hypothesis testing is divided into multiple linear regression tests, F tests, T tests, and the coefficient of determination.Data analysis in this study was carried out using multiple linear regression.Multiple regression can be defined as the influence between more independent variables and one dependent variable and is also used to build equations and use these equations to make estimates (Kurniawan, 2011).In this study the regression equation used is:

RESULTS AND DISCUSSION Population
The population of this research is the village officials as the holders of implementing powers of managing village finances consisting of Lurah, Carik, Danarta, Village Consultative Body, and Dukuh in 7 (seven) villages in Kapanewon Tempel including Banyurejo, Tambakrejo, Sumberrejo, Pondokrejo, Mororejo, Margurejo, and Lumbungrejo.The distribution of questionnaires in this study was carried out by being delivered directly by the researchers to each agency that was the research sample.

Sample
Sampling in this study used the non-probability sampling technique used, namely total sampling, which is a sampling technique where all members of the population are sampled (Sugiyono, 2018).The total number of questionnaires that can be distributed is 109, but 94 can be processed.The details were that the village head, carik, and danarta each numbered 7, the Village Consultative Body numbered 6, and the Dukuh numbered 67.

Descriptive Statistic
The descriptive statistical analysis used in this study includes the number of data points (N), mean of the sample, maximum value, minimum value, and each variable's standard deviation.Table 2 below provides a description of the descriptive statistical analysis' findings.The variable (X1) in Table 2 has a range of values between 27 and 40, with a mean score of 33.61 andi ai standardi deviationi of 3.280.The variable (X2) has1 a minimum1 value1 of 7 and a maximum value of 20, with a mean score of 14.61 and a standard deviation of 3.180.The variable (X3) also has a mean score of 36.43 and a standard1 deviation1 of 4.279, with the lowest and highest scores being 17 and 27, respectively.The variable (X4) has1 a minimum1 value1 of 21 and a maximum value of 32, with a mean score of 25.79 and a standard deviation of 2.655.The mean score for the variable (Y) is 22.06, with a standard deviation of 2.987, and the minimum and highest values are 18 and 28, respectively.Based on table 3, the results of the validity test for each variable show that the correlation coefficient (pearson correlations) is greater than r table 0.201 and the significance value is lower than the value α (0.05), so it can be concluded that the instrument used in this study is valid.Based on table 4, the reliability test results of each variable show that the Cronbach's alpha value is greater than 0.60, so it can be concluded that the instruments used in this study are reliable.The multiple linear regression equation was developed using the SPSS program and was based on the findings, which are shown in Table 5. Y = 4.344 + (-0.042X1) + 0.306X2 + 0.199X3 + 0.287X4 e
Also, an F-value of 17.663 was discovered along with a significance level of 0.000 or less than 0.05 in the data.This result shows that variables (X1), (X2), (X3), and (X4) have an impact on (Y).While the variance of the variables (X1), (X2), (X3), and (X4) that explain (Y) is shown by the R Square value of 0.417, or 41.7%, the remaining 58.3% is explained by other factors outside of this research.

Discussion The Effect of Human Resource Competence on Fraud Prevention in Village Financial Management
Based on the results of the t test, it produces a significance value of 0.683 where the significance value is more than 0.05.This shows that human resource competence has no effect on fraud prevention in village financial management, which means that the first hypothesis (H1) is rejected.This shows that the condition of someone who has the ability/competence in a certain field, experience, mastery of knowledge and expertise but still has the desire to act fraudulently within an organization (Huda et al., 2018).The competence of human resources has no effect on fraud prevention because even competent individuals can behave carelessly when making decisions that can actually reduce their integrity.
The results of this study do not support the Agency Theory (Jensen and Meckling, 1976) which states that in a relationship with the central government (principal) that delegates authority to the village government (agent) to carry out village financial management, so that the village government must comply with all conditions determined by central government by providing financial reports that are in accordance with the wishes of the central government with the competence of village officials to make this happen (Murthy & Jack, 2017).
Based on the data obtained, the competence of village officials in Kapanewon Tempel has not been able to influence fraud prevention.This is because most of the village administrations in the 7 villages located in Kapanewon Tempel have a low educational background.The results of field research showed that out of the 94 respondents who filled out the questionnaire, 59 people had the last educational background in SMA/SMK.This is also because the Village Government has not fully attended training related to the administration of village financial reports.The results of research in the field show that respondents' answers regarding human resource competence in participating in training related to the administration of village financial reports are still low so that human resource competence has not shown a significant figure.The educational background of human resources at Kapanewon Temple supports the Fraud Triangle theory where educational background can affect monthly income.So, there is a possibility that these human resources have financial pressures and also opportunities to commit fraud.
The results of this study are supported by research conducted by (Hariawan et al., 2020) which shows that human resource competence has no effect on fraud prevention.This is due to the low educational background of village officials.This research is in line with research conducted by (Huda et al., 2018), (Huljanah, 2019) and (Huba, 2021) which shows that competence has no effect on fraud prevention.In contrast to research conducted by (Laksmi & Sujana, 2019), (Jayanti & Suardana, 2019) and (N.K. P. P. Dewi & Rasmini, 2019) which states that human resource competence has a positive effect on fraud prevention in village financial management.

The Effect of Morality on Fraud Prevention in Village Financial Management
Based on the results of the t test, it produces a significance value of 0.000 where the significance value is less than 0.05.This shows that morality has an effect on preventing fraud in managing village finances, which means that the second hypothesis (H2) is accepted.Morality towards fraud prevention in village financial management has a relationship, namely the higher the morality, the better the prevention of fraud in village financial management is also getting better.This is like the concept of moral development put forward by (Lawrence Kohlberg, 1977) namely at the pre-conventional and post-conventional stages.The pre-conventional stage is the lowest stage where individuals take action based on fear of existing laws or regulations and the post-conventional stage is the highest stage where individuals base their actions by paying attention to the interests of others and universal laws.
The higher the individual's morality, the more the individual will pay attention to the interests of the public rather than his own personal or organizational interests so that he tries to avoid the tendency to commit accounting fraud that is detrimental to many people.This is in accordance with the Agency Theory where the agent prioritizes the interests of the company so that the principal evaluates its performance well.
Thus, the village government must carry out its obligations and be responsible for the village community concerned, regional government, and the central government in managing village finances must be in accordance with applicable regulations and laws.Budgeting for village funds with what is needed by the village must be in accordance with the community in efforts to develop rural areas and empower the community in the village concerned.The village government is urgently needed to have good morality so that the management of village funds is in accordance with the needs of the village and the community.
The results of this study are supported by previous research conducted by (Rahimah et al., 2018) which states that an individual with high morality can prevent fraud from occurring because individuals will obey rules according to universal ethical principles.This is in line with research conducted by (Laksmi & Sujana, 2019), (Islamiyah et al., 2020a) and (Hariawan et al., 2020) which reveal that morality has a positive effect on fraud prevention in village financial management.

The Effect of the Internal Control System on Fraud Prevention in Village Financial Management
Based on the results of the t test, it produces a significance value of 0.026 where the significance value is less than 0.05.This shows that the internal control system has an effect on preventing fraud in managing village finances, which means that the third hypothesis (H3) is accepted.The internal control system for fraud prevention in village financial management has a relationship, namely the higher the internal control system, the higher the fraud prevention in village financial management in Kapanewon Tempel.This is supported by Regulation of the Republic of Indonesia Number 60 of 2008 (Regulation of the Government of the Republic of Indonesia, 2008) concerning the Government's Internal Control System explaining that the purpose of an internal control system is to provide reasonable assurance of achieving organizational goals through effective and efficient activities, reliability of financial reports and compliance with laws and regulations.
An effective internal control system is urgently needed because it will reduce fraud so as to prevent fraud from occurring.The existence of a strong internal control system can minimize risks or errors in preparing village financial reports so as to create quality financial reports according to regulations that have been established and accounted for.Based on the results of this study indicate that the internal control system in the village government in 7 villages in Kapanewon Tempel in managing village finances is strong.A strong internal control system is supported by a control environment, risk assessment, control activities, information and communication and internal control monitoring.Most of the village government apparatus in Kapanewon Tempel who was used as a respondent in the study answered agree and strongly agree with the statements on the indicators of testing the variables of the internal control system.Therefore acts of fraud in village financial management can be minimized and prevented.
The results of this study support the Agency Theory which states that the system Good internal control is able to increase the symmetry of information between information owned by the central government and local government as the principal with information owned by the village government as an agent in carrying out the mandate to achieve community welfare so as to create a good agency relationship between the central government and local government with the village government .
The results of this study are in line with research conducted by (Laksmi & Sujana, 2019), (Atmadja & Saputra, 2017) and (Jayanti & Suardana, 2019) which state that the internal control

How
To Prevent Fraud In Village Financial Management In Kapanewon Tempel?Lulu Amalia Nusron, Herni Pangesti , a quantitative research using primary data which was conducted in Kapanewon Tempel.The population of this study included all 7 villages in Kapanewon Tempel including Banyurejo, Tambakrejo, Sumberrejo, Pondokrejo, Mororejo, Margurejo, and Lumbungrejo.The selected respondents were village officials who served as Village Financial Management Executors (PPKD) consisting of Lurah, Carik, Danarta, Village Consultative Body, and Dukuh.This is regulated in the Regulation of the Minister of Home Affairs of the Republic of Indonesia (2018) regarding Village Financial Management in which the Village Financial Management Executor (PPKD) is in charge, namely Lurah, Carik as PPKD coordinator, and Danarta as treasury.As for the Domestic Regulation of the Republic of Indonesia Number 110 of 2016 regarding the Village Consultative Body (BPD), it has the task of monitoring and evaluating the implementation of the duties of the Village Head.The position of Dukuh is regulated in Sleman Regent Regulation Number 6 of 2015 which is included as the regional implementer of Village Fund Allocation.

Table 4 . Reliability of Research Variable (Alpha)
How To Prevent Fraud In Village Financial Management In Kapanewon Tempel?Lulu Amalia Nusron, Herni Pangesti ,Anandita Zulia Putri