Factors Influencing the Budget Performance of Ministries and Agencies

Abstrak

Improving performance is a fundamental objective that must be achieved by all types of organizations. The budgeting process has a cyclical nature that allows it to be evaluated through performance measurement. Budget performance reflects the capacity of an organization to deliver operational activities in the form of outputs aimed at achieving its primary objectives and strategic plans, while maintaining a balance between budgetary inputs and the resulting outputs. This study aims to analyze the factors influencing budget performance within Ministries/Agencies, a context that remains underexplored in prior research. Previous studies have predominantly focused on organizational performance, human resource performance, and the implementation of performance-based budgeting. The sampling method employed was purposive sampling, which resulted in 149 respondents consisting of officials and staff involved in the budgeting process across Ministries/Agencies in Indonesia. Data were analyzed using SEM-PLS, yielding an R² value of 0.883. The findings indicate that budget participation, budget implementation, budget evaluation, and organizational commitment have a significant effect on budget performance, whereas budget participation does not show a significant influence. The findings of this study can be used to identify the determinants of budget performance in ministries and agencies. For policymakers, the results highlight the importance of evaluation and employee commitment.