|dc.description.abstract||This study discusses issues of control mechanisms in the capital expenditure of Indonesian local government, because capital expenditure is the second largest portion of local government spending after the personnel expenditure. Indonesian local governments were chosen as a study sample because Indonesia has been undergoing major bureaucratic reform as a consequence of receiving financial assistance from international institutions. This study involves five local governments from a province, including 64 participants from 37 local government agencies. In addition, this study also uses transcripts of interviews as secondary sources, and makes an extensive examination of regulations concerning capital expenditure.
The findings indicate that capital expenditure involves many parties with their own interests, whereby every party exercises its power over local government for realising a project. Meanwhile, the internal conditions of local governments are still dealing with technical and cultural obstacles to accommodating the interests of all parties. Moreover, local government officials also have vested interests in the use of capital expenditure. Hence, the control mechanisms intended to monitor the capital expenditure of local government are still vulnerable to misuse and irregularities.||en_US