Financial Performance Analysis of Regional Governments: Case Study In Pelalawan Regency Period 2019 - 2023

Abstract

This study aims to analyze the financial performance of the Pelalawan Regency Government during the 2019–2023 period using financial ratio analysis. The research employs a quantitative descriptive approach based on secondary data obtained from the Regional Government Financial Statements (LKPD). Financial performance is evaluated through the financial independence ratio, Local Own-Source Revenue (PAD) effectiveness ratio, fiscal decentralization ratio, financial management efficiency ratio, and budget harmony ratio. The results indicate that the financial performance of the Pelalawan Regency Government fluctuated during the observation period. Although the effectiveness of PAD collection was relatively good, the level of regional financial independence remained low because of high dependence on transfer funds from the central government. Furthermore, financial management efficiency and budget allocation require improvement to ensure optimal use of public resources. Therefore, the local government should strengthen PAD potential, improve financial management efficiency, optimize budget allocation, and enhance fiscal capacity to support sustainable regional development and long-term financial independence.