Corresponding Author: Ari Dwi Susanto
E-mail: [email protected]
INTRODUCTION
The public
administration reforms of the late 1970s brought about radical changes in the
delivery of social services and the accounting for government spending and
government structures. This marketization reform, or the application of
commercial management theory and practice to government administration, came to
be known as the New Public Management (NPM) (Tolofari, 2005). NPM is generally seen as a global phenomenon
because it spreads quickly from its home country to other parts of the world,
influencing government policies in developed and developing countries.
Considering this, the article will not limit itself to any one country or
region in drawing examples to demonstrate the impact of NPM (Nugraha & Wibowo, 2020). Also, regarding the impact on education, there will be no
restrictions for tertiary or secondary education. With the ongoing reform of
the education management system, the continuous expansion of the education
scale, and increasingly fierce competition between schools, the benefits of
providing education are increasingly being considered. The status of economic
benefits has become increasingly prominent (Idris, 2016). How to
improve the efficiency of using funds has become the focus of attention of
educational institutions. The original educational institution's budget
management model could not fully meet management needs in the new situation,
exposing a series of problems (Business, 2020). Suppose we only pay attention to the
allocation and use of budget funds but ignore the evaluation and evaluation of
the effectiveness of using funds. In that case, using funds in educational
institutions will inevitably lead to unnecessary waste (Wijoyo, 2021).
As in most
other countries, financial management in public and private schools differs in
Indonesia. Budget planning in public schools always involves parents and school
boards and adherence to educational and financial budgeting procedures that
comply with government standards but are not optimal (Achdiat, 2010). Meanwhile, private schools have very
different implications depending on the foundation that oversees them and the
parents/community environment as stakeholders. Performance-based budgeting is a
budget in which the organization's attention is toward achieving goals.
Therefore, organizations must be able to link the allocation of resources
explicitly or spending to organizational goals to be achieved. Institutions'
main problem is allocating resources based on activities to achieve specific
goals (Fowler, 2022). Empirical evidence shows that
implementing planning and budgeting in school management is still inefficient
and full of obstacles. Many educational institutions, especially private
schools, have closed or are struggling to exist due to poor financial
management (Martono et al., 2018). The financial reporting in educational
institutions in Indonesia still follows the traditional budget reporting
paradigm (Majir, 2020).
Many public sector organizations have departed from
this financial budgeting and reporting paradigm, particularly during the New
Public Management (NPM) era. The New Public Management Technique (NPM)
encourages businesses to implement public sector budgeting strategies,
particularly performance budget reporting (Feng, 2019). Approach This budgeting method is
beneficial because it relates to meeting input, output, and outcome targets, as
well as the vision, mission, strategic goals, and organizational goals (Wahyudin et al., 2020). From the viewpoint of the New Public
Management, these recommendations are designed to change the transparency and
accountability aspects of school performance (NPM). To encourage the success of
education governance, NPM changes are expected to occur in government public
sector organizations and school public sector organizations, one of which is
High Schools (SMA) (Ali, 2021). This project aims to develop a budget
reporting model and financial reports for educational institutions, especially
SMAs, to promote transparency and accountability of performance. Changes in
accounting methods also reflect that in the future, the management of
educational institutions will pay more attention to cost accounting and
performance management. Performance budget management supported by the school's
strategic goals is conducive to increasing budget transparency and binding
power, which is conducive to increasing the efficiency of using funds by budget
agencies and maximizing budget benefits (Sains et al., 2021). The aim and mechanism are the same as
the introduction of managerialism, namely, to 'manage' education rather than
administer education. Management
will be left to schools, and education professionals will have less influence.
Public-private partnerships will provide alternatives, and parents and
businesses will have the power. As the agency takes over powers for planning,
budgeting, and resource allocation from the Local Education Authority (LEA),
principals and teachers will be held accountable for quality, which will be
measured and checked using various instruments and organs (Van De Walle & Hammerschmid,
2011).
The impact of the new public management
and performance budget reporting models on educational institutions lies in
improving accountability and efficiency of budget management, as well as
improving the quality of education. The purpose of this study is to find out
and analyze the impact of new public management, performance budget reporting
models on educational institutions. So that the benefit of this research is
that it can provide an overview of the extent to which the effectiveness and
efficiency of budget management in educational institutions has been achieved
by implementing a new performance budget reporting model and providing
recommendations for improving public management in educational institutions,
especially in terms of budget management, to improve the effectiveness and
efficiency of budget management in educational institutions.
METHODS
This research is a
type of qualitative research with a systematic review approach. A systematic
review is a method that uses previous evidence-based evidence through review,
evaluation, structured evaluation, classification, and categorization. Because
the steps and strategies for carrying out systematic reviews are planned and
well structured, this method differs from the method used only to convey
literature studies (Priadana & Sunarsi,
2021). A systematic review is a type of evidence synthesis in
which broad or narrow research questions are formulated, and data directly
related to the systematic review questions are identified and synthesized. Data
was collected through a review of previous research literature. Then, it is
concluded through deductive reasoning (general to specific). The following will
describe the flow of this research.
RESULTS AND DISCUSSION
The public sector's New Public
Management (NPM) paradigm influences the transition of the budget system from
the traditional model to performance-based budgeting. "Performance-based
budgeting" is defined as "budgeting that takes into account the relationship
between funds and expects outputs, as well as efficiency in obtaining these
results and outputs" (according to Article 7 paragraph (1) PP No.21 of
2004). "Performance-based budgeting requires the preparation of
performance indicators, cost criteria, and performance evaluation for each
program and type of activity" (according to Article 7 paragraph (2) PP
No.21 of 2004).
The
performance budget considers several criteria. First, analyze the motivation
and purpose of the request for funds (A. Budi Santosa, 2021). Second, the cost of the recommended
program to achieve this goal. Third, measurable data can be used to analyze the
achievements and efforts of each program. This performance-based budgeting
strategy focuses on the organizational effectiveness of activities. Efficiency
itself is the ratio between output and input. An activity is considered
efficient if it produces more with the same input or the same amount with less
input. This budget is based on specific goals/plans, the implementation of
which must be planned or supported by an adequate budget, and expenditures must
be used as efficiently as possible (Van De Walle &
Hammerschmid, 2011). It is practical and efficient.
Government regulation no. 21 of 2004 concerning the Preparation of Work Plans
and Budgets for State Ministries/Agencies emphasizes that work plans and
budgets are prepared using three approaches: 1) integrated budget, 2)
medium-term spending framework (MTEF), and 3) performance-based budget. Because
resources are scarce, performance-based budgeting is very profitable.
Performance-based
budgeting can help decision-makers use limited resources better, thus
increasing government efficiency and effectiveness. Managers can choose among
highly competitive needs, and the impact of these decisions can be seen
directly in performance measurements and trends because available resources are
limited. Performance budgets can improve
internal management because the performance budget communicates the boss's
vision to the subordinates, leaders, and managers to know what to expect (Sri Hartati, 2020). Zero-based budgeting, School planning has created a budget
structure to cross programs.
The Unified and More Comprehensive
Budget
The introduction of a unified budget and a comprehensive budget is
the second shift in the budget system. A unified budget is created for better
planning and budgeting operations. Duplication and effectiveness This is
necessary to ensure that the money collected from the community through school
fees paid to schools has been appropriately managed, honestly, and responsibly.
In addition, there is hardware and software that supports the work of each
department in the school, as well as the work of the treasurer and his staff.
Researchers analyzed the model of the school budget and financial reports
according to school conditions based on feasibility evaluations and
observations of researchers in the school field and have adopted the New Public
Management in accounting and finance.
The
Preparation of Budget Reports and Financial Reports Is a Joint Obligation.
By using the new public management system, financial management in
schools is not only the task of the school treasurer, but all elements in the
school, such as the vice principal of the school, set performance and financing
targets. Budgets in schools are more adaptive. This means that budget-using
agencies can divert budgets if they are within the scope of the same strategic
objectives (between targets) so that spending activities can be generated
economically and efficiently.
Structured
Governance Pattern
The structure of power has changed, including strategy and control
mechanisms. Schools now exercise most of the power, including planning and
budgeting, resource allocation, hiring and firing, and evaluation and
monitoring. Apart from direct powers of control, LEA only offers services in a
capacity that allows for school management. In Indonesia, authority lies with
the school principal. Accountability patterns to parents and other community
stakeholders are emphasized. Teachers also must be responsible for each other.
Resource flow. The number of students a school has directly determines the size
of its budget. Therefore, schools must play in a pseudo-market to attract
students to compete with other schools. Write, however, that there is, in fact,
no active competition for pupils. The new method of devolution (Van De Walle & Hammerschmid,
2011). Devolution is seen here to strengthen control of the
administrative center. While schools and departments have budgetary autonomy,
they disburse funds within institutional plans and targets. For example, they
may be partially responsible for generating initial revenue by admitting a
minimum number of fee-paying students.
CONCLUSION
Based on the
synthesis of the literature review that has been carried out, it can be
concluded that the impact of implementing new public management, the
performance budget reporting model in educational institutions is: Performance-based
budgeting is very beneficial because available resources are minimal, integrated
and more comprehensive budget (The Unified and More Comprehensive Budget), the
second transformation in the budget system is the establishment of a unified
and comprehensive budget, preparation
of budget reports and financial reports is a joint obligation and structured
Governance Pattern.
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