Indonesia Conference Directory

Performance-based budgeting on the local government focuses on achieving public sector performance that is not only assessed from its financial aspects such as ratios and budget realization, but also includes non-financial aspects such as the use of performance indicators and assessment of community satisfaction levels. One of them is budget ratcheting. This study aims to determine the effect of the budget ratcheting on performance of the local government of Baubau City in terms of financial and non-financial aspects. The population was the local government of Baubau City that published financial statements from 2014 to 2016 and sampling method was through judgment sampling, namely the selection of samples with consideration of convenience. Data collection was done through direct observation and nonparticipant observation. This study uses descriptive and inferential analysis. The results indicate that Correlation Coefficient (R) was obtained at 0.871 meaning there is a correlation between budget ratcheting on the performance. It was due to increase in the planned budget and expenditure based on the realization of the costs obtained in the budget and expenditure in the previous period. Thus, the local government performance of Baubau City during 2014 to 2016 from the financial and non-financial sectors showed good conditions.