The role of politic pressure, fraud risk management and culture organization in moderating public governance on Indonesia local government financial performance

Purpose - This study aims to examine public governance’s effect on local government financial performance with fraud risk management (FRM), organizational culture and political pressure as a moderating variable. Design/methodology/approach - This research uses quantitative methods with questionnaires as the data source. The objects of this research are local government organizations and regional inspectorate offices in Indonesia. There were 111 respondents in this study. The analysis technique used a structural equation model–partial least square with WarpPLS version 7.0. Findings - The findings of this research are significant, revealing that public governance significantly enhances local government financial performance. Moreover, the key result of this study is the identification of FRM, organizational culture and political pressure as significant moderators of local government financial performance. Research limitations/implications - This research uses an online survey to survey all local governments in Indonesia, but this method has weaknesses because of the potential for bias. Practical implications - This research contributes to increasing the implementation of public governance, FRM and using corporate culture as an anti-fraud system. On the other hand, this research warns local governments regarding political pressure, which can hurt public governance and local government financial performance. Originality/value - This research presents a unique perspective, namely, adding moderation of FRM, organizational culture and political pressure on public governance with local government financial performance. These three moderators represent organizational systems, organizational behavior and pressure on organizational performance, which previous researchers have rarely studied.