FINANCIAL SUSTAINABILITY IN SOUTH SUMATRA PROVINCE

Abstract

Local governments are given authority by the central government to run their own government in accordance with the principle of autonomy. The implementation of regional autonomy aims to improve community welfare through equitable economic development and create fiscal independence in order to achieve financial sustainability goals. This study aims to determine the effect of financial independence and debt to revenue ratio on financial sustainability in cities and regencies in South Sumatra Province. This study uses quantitative methods with panel data regression analysis tools and uses saturated sampling techniques to obtain samples derived from the 2017-2021 Local Government Financial Statements (LKPD) obtained from the Audit Board (BPK) website. The results of this study show that financial independence have a significant effect on financial sustainability, while debt to revenue ratio do not have a significant effect on financial sustainability. Financial independent and debt to revenue simultaneously have a significant effect on financial sustainability.