RATIO ANALYSIS TO ASSESS FINANCIAL PERFORMANCE IN THE PURWOREJO DISTRICT BUDGET REALIZATION REPORT FOR 2017-2020

This study aims to determine the financial performance of Purworejo district in 2017-2020 by using the ratio of the degree of fiscal decentralization, the ratio of regional financial independence, the ratio of regional dependence, the ratio of effectiveness, and the ratio of efficiency. This is a qualitative research using secondary data taken from the official website of Purworejo district, namely https://purworejokab.go.id. The findings highlight that the financial performance of Purworejo Regency is still lacking when seen from the ratio of the degree of fiscal decentralization, the ratio of regional financial independence is still very low, the Regional Dependency Ratio is still very high. However, the Effectiveness Ratio has been very effective, and the Efficiency Ratio has also been efficient.


INTRODUCTION
Since the enactment of regional autonomy in Indonesia, each region has been given the authority to manage and manage its own area. According to Law Number 32 of 2004 which has been amended into Law Number 23 of 2014 concerning Regional Government, the meaning of regional autonomy is the authority of an autonomous region to regulate and manage its affairs delegated by the central government and the interests of the local community according to their own initiative based on the aspirations of the community in accordance with statutory regulations. There is also the aim of granting regional autonomy from the Central Government to Regional Governments, namely the services provided to the community to be better, developing democratic life, realizing national justice, regional equity, maintaining central and regional relations in the unity of Indonesia, and increase community participation. One of the successes in the implementation of regional autonomy comes from the hard work of the Regional Government in efforts to manage finances in accordance with applicable law (Susilawati et al., 2018).
Regional financial management affects regional progress, if regional financial management is good, regional progress will also be good (Akhmad et al., 2017). One of the bases for regional financial management is the Regional Revenue and Expenditure Budget (also known as APBD) with a period of one year from 1 January to 31 December. The APBD is an annual financial plan prepared by the regional government which is discussed and approved by the DPRD (Ibrahim, 2014). APBD also reflects the ability of local governments to carry out various tasks of government, development and community social services.
Regional ability to manage finances and implement regional autonomy, one of which can be determined by regional financial performance, namely by analyzing government financial reports such as the Budget Realization Report (LRA). With the measurement of financial performance it is very important to assess accountability and effectiveness of budget management related to activities public service (Agustin & Subardjo, 2017). Measurement of financial performance can be carried out in several ways, including using financial ratio analysis measurements, balanced scorecard measurements, and value for money measurements (Munandar, 2017). One of the tools used to measure financial performance is by using financial ratio analysis. The results of these financial ratios need to be interpreted, so that they can be used to evaluate financial performance as a consideration in making decisions. Performance appraisal is in the form of financial ratio analysis originating from the aspect of Regional Head Accountability Reports in the form of APBD calculations (Sijabat et al., 2014).
Purworejo Regency is an autonomous region where in its decentralization it not only receives funds from the central government but also manages its own PAD sources. The source of PAD for Purworejo district comes from regional revenue sources consisting of regional taxes, regional levies, BUMD profit share, revenue from agencies, and other revenues. Based on the background above, the formulation of the research problem is how is the financial performance of the Purworejo Regency Regional Revenue and Expenditure Budget Realization Report in 2017-2020? Hence, this study aims to determine the financial performance of Purworejo district using the ratio of the degree of fiscal decentralization, the ratio of regional financial independence, the ratio of regional dependence, the ratio of effectiveness, and the ratio of efficiency 2. THEORETICAL BASIS 2.1. Regional Revenue and Expenditure Budget (APBD) According to Law Number 17 of 2003, the Regional Revenue and Expenditure Budget (APBD) is a manifestation of regional financial management which has been determined annually by Regional Regulation. APBD sources include the revenue budget, expenditure budget, and financing. Regional revenue itself comes from Regional Original Revenue, balancing funds, and other legitimate income (Asari & Suardana, 2018). The APBD is prepared by the Regional Government which is discussed and approved by the Regional People's Representative Council (DPRD) so that in the end it becomes a Regional Regulation and must be followed by all regional institutions.

Financial Performance Measurement
According to Indrayani & Khairunnisa (2018), performance measurement is a process to find out whether the activities that have been carried out have reached the predetermined targets. Meanwhile, financial performance is an issue that needs to be understood by public sector organizations, including the government. So that since the existence of performance-based budgeting regulations, every government is able to

Components of Regional Government Financial Statements
In Government Regulation No. 71 of 2010 concerning Government Accounting Standards, it is explained that the principal government financial reports include 1) Budget Realization Report (BRR) 2) Report on Changes in Budget Balance (RCBB) 3) Balance sheet 4) Operational Report (OR) 5) Statement of Changes in Equity (SCE) 6) Statement of Cash Flows (SCF) 7) Notes to Financial Statements (NFS)

Data Sources and Types
The data source used in this study is a secondary data source, because the data was obtained indirectly but from the Budget Realization Report which has been published through the official Purworejo district website, namely https://purworejokab.go.id. This type of research data is quantitative data in the form of the 2017-2020 Purworejo Regency Budget Realization Report.

Analysis Techniques
Research analysis technique that is with quantitative analysis, which can describe the financial performance of Purworejo district based on financial performance ratios as follows:

Fiscal Decentralization Degree Ratio
The ratio of the degree of fiscal decentralization is a tool for measuring the authority and responsibility delegated by the central government to the local government for managing and optimizing revenue. The calculation of the degree of fiscal decentralization is by comparing Regional Original Revenue with Total Regional Revenue multiplied by 100%.
Fiscal Decentralization Degree Ratio = PAD Total Regional Revenue x 100%

Regional Financial Independence Ratio
The Regional Financial Independence Ratio is a ratio that can be used to measure the degree of financial independence of a regional government in financing development, public services and other government affairs. The calculation of the regional independence ratio is formulated by Regional Original Revenue (PAD) divided by Transfer Income multiplied by one hundred percent. The higher the regional financial independence ratio, the lower the dependence on external assistance, but if the independence ratio is low, the dependence on external parties will be higher.
Regional Independence Ratio = PAD Regional Revenue x 100%

Regional Dependency Ratio
The regional financial dependence ratio is measured by comparing the amount of regional transfer revenue with total Regional Revenue (Oki et al., 2020). So that if the regional dependency ratio is higher, then the local government is more dependent on the central government.
Regional Independence Ratio = Transfer Income Total Regional Revenue x 100%

Effectiveness Ratio
The Effectiveness Ratio is useful for proving the ability of local governments to regulate PAD revenues in accordance with predetermined revenue targets (Fathah, 2017). The calculation of the Effectiveness Ratio is by comparing the realized PAD with the targeted PAD.
Effectiveness Ratio = PAD Realization PAD Budget x 100%

Efficiency Ratio
According to Amanda et al. (2021), the efficiency ratio represents a comparison of the total costs incurred to generate income with the realization of income received. The following is the formula for calculating the efficiency ratio: Efficiency Ratio = Regional Expenditure Realization Regional Revenue Realization x 100%

RESULTS AND DISCUSSION
The following is a discussion of how the performance was carried out by the Regional Government of Purworejo Regency with data in the form of APBD Budget Realization Reports in 2017, 2018, 2019 and 2020 which were measured using several analyzes as follows:  Results Based on the calculations in the table above, it can be seen that the Degree of Fiscal Decentralization Ratio for Purworejo Regency in 2017-2020 is still lacking because it only obtained an average of 13,76%. This means that the ratio of entitlements to the central government is very high, which is caused by the small contribution of PAD compared to the total regional revenue. The highest degree of decentralization ratio occurred in 2017 with a ratio of 14,11% while the lowest degree of decentralization occurred in 2019 with a ratio of 12,90%. As such, to increase the degree of fiscal decentralization, Purworejo district must increase its own Regional Revenue. Based on the calculation results above, it can be seen that the average financial independence ratio for the Purworejo Regency area from 2017 -2020 is 16,67% so that the level of financial capability of Purworejo Regency is still very low and the relationship pattern is still instructive. This shows that Purworejo district has not been able to implement regional autonomy because the revenues derived from assistance from the central government and the provincial government are higher than community participation in paying regional taxes and levies, which is indicated by transfer revenues that are greater than regional revenues. With this, it can be shown that Purworejo Regency has not been able to finance its own needs and its dependence on the government is also still high.  Based on the table above, it can be seen that the regional financial dependency ratio for Purworejo Regency from 2017-2020 has a very high dependence with an average of 82,57%. In 2017 the dependency ratio reached 82,41%. In 2018 it increased by 82,50%. In 2019 it rose again to reach 83,34%. In 2020, the dependency of the Purworejo district has decreased by 82,03%, which means that there has been a slight increase in the region's ability to finance regional development activities through optimizing local revenue. Even though in 2020 the percentage of regional dependency has decreased, when viewed as a whole during the 2017-2020 fiscal year the dependency ratio for Purworejo Regency is still very high. This condition shows that the Purworejo District Government is still heavily dependent on the referral transfer of the government of the central and provincial government. From the table above it can be seen that the average effectiveness ratio for Purworejo City has reached 106.34% during the 2017-2020 budget period. The average results show that Purworejo district has been included in the very effective category. In 2017 the effectiveness ratio was 110,97% where the realization of Regional Original Revenue was higher than the set Regional Original Revenue revenue target. The effectiveness ratio in 2018 decreased to 102,86% but the realization of Regional Original Revenue was still able to exceed the target of Regional Original Revenue. In 2019 there was a decline again where the realization effectiveness ratio became 95,22% and the realization of Regional Original Revenue was smaller than the targeted Regional Original Revenue, this shows that the Purworejo Regency Government has not optimized its performance in 2019. In 2020 the district effectiveness ratio Purworejo again increased to 116,33% and the realization of Regional Original Revenue again exceeded the target of Regional Original Revenue that had been set. Even though the average results of the Purworejo district in 2017-2020 have shown the Very Effective category. However, there is a decrease in the realization of regional original revenues that must be considered and must be increased in the following years. Especially in increasing the source of local revenue, namely the collection of regional taxes and fees. Based on the results of the table above, it can be seen that the average regional financial efficiency for Purworejo Regency in 2017-2020 is classified as efficient because it is below 100%, namely 78,68%. During the 2017-2020 fiscal year, the district efficiency ratio continued to increase from less efficient criteria to efficient criteria. This is because the realization of spending in Purworejo district is higher than the realization of total Regional Revenue. Could said that the performance of Purworejo Regency has been efficient in managing its regional spending. This is because the local government has been able to reduce the amount of regional expenditure that does not exceed Regional Revenue.

CONCLUSION 5.1. Conclusion
Based on the results of the analysis of Purworejo Regency Regional Budget and Expenditure Revenue data in 2017-2020, it can be concluded that the financial performance of the Purworejo Regency Government is as follows: 1) The ratio of the Degree of Fiscal Decentralization in Purworejo Regency in 2017-2020 is still lacking because it only obtains an average of 13,76%. This is because the contribution of Regional Original Revenue is small compared to the total Regional Revenue. Consequently, to increase the degree of fiscal decentralization, Purworejo district must increase its own Regional Revenue.
2) The ratio of Regional Financial Independence for Purworejo Regency from 2017 -2020 has an average of 16,67% so that the level of financial capability of Purworejo Regency is still very low and the relationship pattern is still instructive. As such, it can be shown that Purworejo Regency has not been able to finance its own needs and its dependence on the government is also still high.
3) The Regional Financial Dependence Ratio for Purworejo Regency from 2017-2020 has a very high dependency with an average of 82,57%. This shows that the regional dependence of Purworejo Regency is still very high when viewed as a whole during the 2017-2020 fiscal year. This condition shows that the Government of Purworejo Regency is still very dependent on transfer receipts obtained from the Central Government and the Provincial Government. 4) Purworejo City's Effectiveness Ratio has reached an average of 106.34% during the 2017-2020 budget period. The average results show that Purworejo district has been included in the very effective category. 5) The average regional financial efficiency ratio for Purworejo Regency for 2017-2020 is classified as efficient because it is below 100%, namely 78,68%. During the 2017-2020 fiscal year, the district efficiency ratio continued to increase from the criteria of less efficient to efficient criteria. This is because the realization of spending in Purworejo district is higher than the realization of total Regional Revenue. In conclusion, the performance of Purworejo Regency has been efficient in managing its regional spending.

Suggestion
Based on the findings and conclusions above, we suggest that: 1) For the Government of Purworejo Regency After conducting this research, it can be seen that the dependency ratio for Purworejo district is still very high and so the financial independence ratio is still low. For this reason, the authors suggest that the Government of Purworejo Regency further increase and maximize its Regional Original Revenue, which comes from regional taxes, regional levies, BUMD profit share, revenue from agencies, and other revenues. As such, Purworejo district does not always rely on central government assistance. So that in the future the Purworejo district government can become a district that can finance its own area and the level of dependence on the central government will also be reduced 2) For further researchers Future researchers are expected to be able to increase the ratio so that it can be more detailed and complete in analyzing local government performance and it is also hoped that further research will add another research period not only 4 years.