The Effect of Organizational Commitmenton Financial Performance of Local Government

ABSTRACT: Purpose: This study analyzed the effect of organizational commitment, internal control, andapparatus competence on the financial performance of local governments.Design/Methodology/Approach: The sample involved 84 respondents of local government officials from theplanning division, and those in charge of activities at all regional organizations in North Gorontalo DistrictIndonesia. This study used an explanatory method with a quantitative approach. Furthermore, the reflectivemodel measurement used convergent and discriminant validity. In addition, Partial Least Square-StructuralEquation Modeling (PLS-SEM) technique was used as the data analysis.Finding: The results showed that organizational commitment has a significant direct effect on internal control,apparatus competence, and financial performance of local governments. Furthermore, internal control hasasignificant direct effect on apparatus competence, but no significant effect onfinancial performance. In addition,apparatus competence has a significant direct effect on the financial performance.Practical Implications: Local governments need to pay special attention to efforts in improving financialperformance that is effective, efficient, transparent, and accountable in favor of the public interest. These effortsinclude strengthening policies towards the synergy of organizational commitment, increasing the governmentapparatus competence and internal auditors, as well as strengthening the control implementation.Originality/Value:The quality of local government financial performance describes the results of strongorganizationalcommitment, theprofessionalism of internal auditors, and apparatus competence based on the level ofknowledge, skills, and attitudes.

Keywords: Financial Performance, Internal Control, Apparatus Competence, Organizational Commitment.