TY - JOUR
T1 - Exploring BUMDES accountability
T2 - Balancing expectations and reality
AU - Fitriani, Desti
AU - Md Shahbudin, Amirul Shah
AU - Shauki, Elvia R.
N1 - Publisher Copyright:
© 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
PY - 2024
Y1 - 2024
N2 - Village-owned enterprises (VOEs), known as BUMDES in Indonesia, are heralded as pivotal for rural community welfare. Yet, they contribute only 2% to 4% to village revenues, revealing a dependency on government support. This study examines the accountability practices of BUMDES through an Institutional Logic lens, highlighting a mismatch between government expectations of financial returns and BUMDES’s broader performance evaluation across financial, operational, and societal domains. Utilising a multi-case study approach, the research uncovers the coexistence of dual logics within BUMDES: one favouring social welfare, the other commercial sustainability. It is noted that BUMDES utilises various control mechanisms such as meetings, dialogues, and community involvement in implementing their programmes. Mechanisms for reporting, disclosure, performance evaluation, and assessment are also in place, though self-regulatory mechanisms are notably absent. While financial accountability is confirmed, accountability in fairness and performance remains obscure. The study advocates for regulatory enhancements to clarify BUMDES objectives and align financial and social performance indicators. It also recommends developing a structured curriculum to boost the BUMDES administrators’ capabilities. Additionally, linking the programmes to a compliance-based rating system could incentivise improvement and accountability.
AB - Village-owned enterprises (VOEs), known as BUMDES in Indonesia, are heralded as pivotal for rural community welfare. Yet, they contribute only 2% to 4% to village revenues, revealing a dependency on government support. This study examines the accountability practices of BUMDES through an Institutional Logic lens, highlighting a mismatch between government expectations of financial returns and BUMDES’s broader performance evaluation across financial, operational, and societal domains. Utilising a multi-case study approach, the research uncovers the coexistence of dual logics within BUMDES: one favouring social welfare, the other commercial sustainability. It is noted that BUMDES utilises various control mechanisms such as meetings, dialogues, and community involvement in implementing their programmes. Mechanisms for reporting, disclosure, performance evaluation, and assessment are also in place, though self-regulatory mechanisms are notably absent. While financial accountability is confirmed, accountability in fairness and performance remains obscure. The study advocates for regulatory enhancements to clarify BUMDES objectives and align financial and social performance indicators. It also recommends developing a structured curriculum to boost the BUMDES administrators’ capabilities. Additionally, linking the programmes to a compliance-based rating system could incentivise improvement and accountability.
KW - accountability
KW - Accounting
KW - BUMDES
KW - Business, Management and Accounting
KW - Corporate Governance
KW - Entrepreneurship and Small Business Management
KW - Institutional logic
KW - Management Accounting
KW - material practice
KW - symbolic construction
UR - http://www.scopus.com/inward/record.url?scp=85204675001&partnerID=8YFLogxK
U2 - 10.1080/23311975.2024.2402083
DO - 10.1080/23311975.2024.2402083
M3 - Article
AN - SCOPUS:85204675001
SN - 2331-1975
VL - 11
JO - Cogent Business and Management
JF - Cogent Business and Management
IS - 1
M1 - 2402083
ER -