Font Size: 

Indonesia generally has weak internal control systems (ICS) implementation. This condition was revealed when BPKP conducted diagnostic assessment (DA) in 12 local governments in 2010. The result of this DA then used as dependant variable for logit regression and also as based to select case studies based on the effectiveness of their ICS implementation. The aim of this study is to investigate the critical success factors that determined the effectiveness of ICS implementation in Indonesian local government. Using factor analysis and logit regression from empirical data collected by questionnaire in four selected local governments, the results show that the three most important factors are: ‘independence of the internal audit’, ‘organizational size and structure’ and ‘the performance of audit work’. Principal component analysis revealed that appropriate factor groupings for the 20 CSFs are: top management support, internal audit, and organizational size and structure. These findings should influence local governments and BPKP in developing tools and infrastructure to improve the effectiveness of SPIP implementation in local governments.

SPIP; internal control system effectiveness; non-parametric statistical test; Mann-Whitney-Wilcoxon; factor analysis; logit; Indonesian local government; PP 60