EXPLAINING BUDGET ABSORPTION BACK-LOADING IN SUMATRA PROVINCES: EVIDENCE FROM FISCAL AND BUDGETARY DETERMINANTS

Abstract

This study examined the effect of Government Internal Audit Apparatus (GIAA) capability, fiscal stress, rebudgeting, and budget enactment timeliness on budget absorption back-loading in provincial governments on Sumatra Island. Back-loading refers to the tendency of regional expenditure realization to be more concentrated in the second semester. This study used a quantitative approach with secondary data obtained from regional budget realization reports, Financial and Development Supervisory Board (FDSB) performance reports, and regulations concerning local budget enactment and local budget amendment. The sample covered 10 provincial governments on Sumatra Island during 2020-2024, resulting in 50 observations. Data were analyzed using panel data regression with EViews 14. The model selection tests indicated that the Common Effect Model was the appropriate estimation model. The findings showed that fiscal stress has a positive and significant effect on budget absorption back-loading. Government Internal Audit Apparatus (GIAA) capability, rebudgeting, and budget enactment timeliness do not have significant partial effects. Simultaneously, the four variables do not significantly affect budget absorption back-loading. These findings indicate that fiscal pressure is a more direct factor in explaining expenditure concentration in the second semester, while back-loading remains related to broader budget implementation processes beyond the model.