FINANCIAL REPORT ANALYSIS OF THE JENEPONTO REGENCY REGIONAL GOVERNMENT FOR 2021

Financial reports are organized reports that detail a reporting entity's financial situation and transactions. The purpose of financial reports is to provide users with valuable information about the financial condition, budget execution, cash flows, and financial performance of a reporting business in order for them to make and evaluate resource allocation decisions. Consequently, local government financial reports (LKPD) are financial reports prepared by a local government (PPKD by merging financial reports issued by each SKPD), which is a form of local government accountability to the public about the management of state finances. Specifically, the objective of local government financial reports is to provide valuable information for decision making and to establish the reporting entity's accountability for the entrusted resources. Regional Government Financial Reports are analyzed for Regional Government Financial Reports (LKPD). This analysis can be used to help users of financial statements in terms of how to understand financial reports, interpret numbers in financial reports, evaluate financial reports and use financial information for decision making. With the analysis of these financial statements, users of financial reports will obtain information regarding regional financial accountability, regional wealth, and local government financial performance. This study uses descriptive research methods with a qualitative approach and literature analysis or literature study as a data collection technique. This financial report analysis focuses on financial reports that utilize an analytical technique to identify and understand existing issues and opportunities so that they will be very useful in making a decision.


INTRODUCTION
Jeneponto Regency is one of the regencies that make up the province of South Sulawesi. Bontosunggu is the provincial capital of Jeneponto. As one of the regencies, Jeneponto district must also prepare financial reports at the conclusion of 1 (one) fiscal year as a measure of accountability for regionally managed finances. Regional Government is the implementation of government affairs by the regional government and regional people's representative councils based on the principles of autonomy and coadministration with the principle of broadest autonomy within the system and principles of the Unitary State of the Republic of Indonesia, as outlined in the 1945 Constitution of the Republic of Indonesia. Local government handles regional finances through the Regional Revenue and Expenditure Budget (hence referred to as APBD) for the welfare of the people in the framework of governing. Law No. 17 of 2003 pertaining to State Finances specifies that the intended financial accountability report must be presented in the form of Financial Statements that include at a minimum Budget Realization Reports, Balance Sheets, Cash Flow Reports, and Notes to Financial Statements, and are prepared using SAP. This financial accountability report is compiled in accordance with applicable regulations in order to determine whether or not the organization is fulfilling its responsibilities effectively. Financial report analysis is one of the means by which local governments' financial management performance may be observed and assessed. When the analysis of financial statements involves interpreting the figures in financial reports in order to evaluate financial performance, the outcomes of the study will serve as a foundation for economic, social, or political decisions (Kawatu, 2019). This financial report analysis focuses on financial reports that utilize an analytical technique to identify and understand existing issues and opportunities so that they will be very useful in making a decision (Farida & Nugraha, 2019).
This study was prepared to find out and understand the financial reports that have been prepared by the Jeneponto Regency Government. From this study, it is hoped that the results will provide benefits in decision making by internal parties (Jeneponto Regency Government) and the wider community as external parties.

RESEARCH METHODS
This study was descriptive research methods with a qualitative approach and analysis of the literature or literature study as a data collection technique (Moleong, 2010). Literature study is a research methodology by studying journals, books, articles, theses, and references related to government financial reports.

Regional Financial Performance Ratio
To answer the question in the formulation of the problem, namely how the Jeneponto Regency financial reports are, certain appropriate techniques or methods can be used so that this analysis activity can be useful for policy makers and decision makers. Regional financial success can be measured in a number of ways, including with the Regional Financial Performance Ratio. The following ratios can be utilized:

Effectiveness of Regional Original Income (PAD) Ratio
According to Zuhri & Soleh (2016) states that "the PAD Effectiveness Ratio describes the Regional Government's ability to generate the intended Revenue, which is then compared to the objective based on the region's actual potential. The better the regional capabilities, the greater the PAD Effectiveness Ratio". Following is the effectiveness ratio formula:

Regional Financial Efficiency Ratio
Regional Financial Efficiency Ratio (REKD) depicts the ratio between the amount of costs incurred to generate income and the amount of money actually generated. Regional Government Financial Performance is considered efficient if the ratio attained is less than one or less than 100%. The greater the Regional Government Financial Performance, the lower the Regional Financial Efficiency Ratio. The efficiency ratio indicates the degree to which the government is able to reduce the costs it incurs. According to Fitrianis (2017) which states that "the greater the local government's performance, the lower the efficient ratio". The following formula is used to compute this ratio:

Harmony Ratio
Harmony Ratio shows how regional governments could prioritize the best use of their budgets for Development Expenditures and Routine Expenditures. According to Djuniar (2017) "the greater the proportion of cash dedicated to Routine Expenditures, the lesser the proportion of investment expenditure (Development Expenditure) utilized to develop economic facilities and infrastructure for the community". This Harmony Ratio consists of two calculations: a. Operating Expenditure Ratio This ratio provides the person reading the report with information regarding the proportion of regional expenditures that is devoted to operational expenditures. Expenditures that provide benefits that are used up within the span of one fiscal year are referred to as operational expenditures. Because of this, operational expenditures are typically considered to be of a routine or recurrent character. In general, the share of Operational Expenditure constitutes the majority of the total expenditures for the region, which range from sixty to ninety percent. According to Sembiring (2020) "local governments with high income levels tend to have a higher portion of operational spending than local governments with low income levels". The formula for determining the ratio of operational expenses is as follows: On the basis of this ratio, the relevant fiscal year's proportion of regional expenditures devoted to investment as capital expenditures can be determined. Capital expenditure is normal and yields medium to long term advantages. According to Nurabiah (2018) "in general, the proportion of capital expenditures to regional expenditures is between 5-20%". The formula for calculating this ratio of the amount spent on capital expenditures is as follows: There is no definitive benchmark for the optimal ratio of Operational and Capital Expenditures to APBD, since it is significantly influenced by the dynamics of development activities and the quantity of investment required to accomplish the desired growth.

Growth Ratio
The Growth Ratio is important for determining whether the local government had positive or negative growth during the relevant fiscal year or budget period. Clearly, it is anticipated that revenue growth would be positive and that the trend will rise. Negative growth, on the other hand, will signal a decline in Regional Revenue Financial Performance. The growth ratio is useful for determining prior management ability. According to Putri & Sulastiningsih (2018) "the growth ratio is useful for knowing whether local governments in the relevant fiscal year or during several budget periods, their budget performance has experienced positive or negative growth in income or spending". The Growth Ratio can be computed using the following formula: The Growth Ratio serves to evaluate regional potentials that need attention. According to Fitrianingrum et al. (2017) for a growth ratio the higher the Total Regional Revenue, PAD, and Capital Expenditures followed by the lower Operating Expenditure, the growth is positive. This means that the area has been able to maintain and increase its growth from one period to the next.

Ratio Regional Financial Independence
According to Pramono (2014) states that The Independence Ratio quantifies the dependency of a region on foreign financial sources. The greater the Independence Ratio, the less reliant an area is on foreign support (particularly from the central and provincial governments). And conversely, the smaller the Independence Ratio, the lower the level of community participation in paying regional taxes and levies, which are the primary sources of Local Own Revenue (PAD). The greater the regional taxes and levies a community pays, the greater its standard of living. The relationship pattern in the table above can be explained as follows: a. In the Instructive Relationship Pattern, the central government's function is more important than the Regional Government's autonomy (regions that are unable to carry out regional autonomy). b. The Consultative Relationship Pattern, in which the central government's intervention has begun to diminish since the regions are viewed as perhaps more capable of implementing autonomy. c. In accordance with the Participatory Relations Pattern, the role of the central government is reducing, since the affected regions have a degree of autonomy that is close to being capable of conducting autonomous affairs. d. In the Delegative Relationship Pattern, the central government no longer intervenes since the regions are competent and independent in managing regional autonomy matters. From the above balance sheet, the ratios used to measure the financial performance of the local government of Jeneponto Regency can be calculated.

Jeneponto Regency Financial Analysis Ratio
1) Ratio Effectiveness of Regional Original Income (PAD), describes the ability of the Regional Government to realize the planned Revenue, then compared with the target set based on the real potential of the region.
Effectiveness Ratio = 2) The Regional Financial Efficiency Ratio (REKD) illustrates the comparison between the amount of costs incurred to obtain income and the actual income received.
Efficiency Ratio = 3) It is not counted because there is no definite benchmark for how big the ratio of Operational and Capital Expenditure to the ideal Regional Budget is. 4) The Growth Ratio is helpful for determining whether the local government had positive or negative growth in the relevant fiscal year or during the budget period. x 100% = -2,69% 5) The Independence ratio illustrates regional dependence on external funding sources.

CONCLUSION
From the discussion in the calculation of financial ratios for Jeneponto Regency, the following conclusions can be drawn: 1) The Ratio Effectiveness of Regional Original Income (PAD) is 92,2%, which means it is quite effective. It means regional capacity that is quite effective in realizing planned revenues based on the region's real potential. 2) From this research can be seen that the Jeneponto Regency Government gets a score of 99,30%, which means it is efficient in spending costs in collecting revenue.
3) The growth ratio is -2,69%, meaning that the Jeneponto Regency Government has not been able to maintain and increase its growth from one period to the next. It is known that a negative value indicates a decrease in regional income financial performance. 4) The Jeneponto Regency Government's financial capacity is known to be very low and has an instructive relationship pattern, where the central government's role is more important than the independence of the Regional Government, according to the results of calculating the independence ratio of 8,11% from this research (the regions are unable to implement regional autonomy).