The Phenomenon of Budget Deficits and High SILPA: An Effectiveness Analysis of Regional Budget Management in Local Governments of East Java

Abstract

This study investigates the paradox of regional financial governance in East Java, where deficit budget planning consistently results in a high Remaining Budget Financing (SILPA) at the end of the fiscal year. The novelty of this research lies in integrating budget realization data with institutional and political analyses to explain inefficiencies in regional public budgeting. Using a mixed-methods descriptive approach, this study examines four local government entities in East Java—Tulungagung Regency, Blitar City, Blitar Regency, and Kediri City—through descriptive tabulation of revenue, expenditure, and SILPA realizations, complemented by analysis based on fiscal stress theory, internal control systems, and agency theory in the public sector. The findings reveal that the coexistence of budget deficits and high SILPA reflects significant governance dysfunction, characterized by weaknesses in the Government Internal Control System (SPIP), limited capacity of Government Internal Supervisory Apparatus (APIP), heavy dependence on central government transfers, and political dynamics that create inconsistencies between development planning documents and budget formulation. These conditions contribute to substantial budget variances and reduce the effectiveness of public financial management. Therefore, strengthening collaborative governance mechanisms and integrating digital budgeting systems are recommended to enhance budget accuracy, improve accountability, and minimize opportunistic behavior in regional financial governance.The Atlantis Press Proceedings article template has many predefined paragraph styles for you to use/apply as you write your paper. To format your abstract, use the Microsoft Word template style: [Abstract]. Each paper must include an abstract. Begin the abstract with the title “Abstract” in bold font, followed by a paragraph with normal 10-point font. Do not cite references in the abstract. Please do not place or cite tables and figures in the abstract either.