THE MEDIATION ROLE OF INTERNAL CONTROL IMPLEMENTATION IN VILLAGE FINANCIAL ACCOUNTABILITY PERFORMANCE

This study aims to examine the role of internal control implementation as a mediating variable in the relationship between financial knowledge and public participation in the village's financial accountability performance. This research used a questionnaire. Then, the hypotheses were tested utilizing Structural Equation Modeling (SEM) based on Partial Least Squares (PLS). The results showcased that the internal control implementation mediated the relationship between financial knowledge and public participation in the village's financial accountability performance. Further, this study provides practical implications for the government to increase the actualization of the internal control implementation in village financial management.


INTRODUCTION
Since the enactment of Law Number 6 of 2014 concerning Villages, the total budget and allocation of village funds each year has increased significantly (Pratolo et al., 2022).The relatively large amount of village funds received has implications for public demands for the village government to carry out transparency and accountability in village financial management (Supriadi et al., 2015;Atmadja & Saputra, 2018).On the other hand, based on the audit results conducted by the Central Java Representative Finance and Development Supervisory Agency (BPKP) (2019), there has been embezzlement of village funds, to be precise in Sidorejo Village, with a total loss of IDR 170.6 million.Furthermore, in 2020, a similar case was confirmed in Wonosido Village, Lebakbarang Sub-district, and caused a state loss of IDR 292,953,600.
Furthermore, Indonesia Corruption Watch (2020) revealed that the sector most prone to corruption lies in the village funds, including the Village Fund Budget (ADD), Village Fund (DD), and Village Own-Source Revenue (PADes).From the government institutions' study results, it seems that village financial management is still weak so that the misappropriation and corruption practices of village funds continue to occur (Ariyanto et al., 2022;Priantono and Vidiyastutik, 2022).
In this regard, the ineffective implementation of village fund financial accountability is a major problem for many village apparatus (Sugiharti & Ramdan, 2019;Pangayow & Patma, 2021).Various attempts to find solutions related to the inefficiency of individual behavior and other determinants have been carried out (Tang and Baker, 2016).Specifically, one factor in the village financial management's ineffectiveness is the village apparatus's low financial knowledge and the lack of public participation in activities designed by the village apparatus (Utama & Wulandari, 2020;Kondratyev & Fadeeva, 2021).Financial knowledge, subjectively and objectively, can influence individual behavior and ability to understand budgets, revenue, and financial management (Dwiastanti, 2017;Yuliani et al., 2019).Adequate financial knowledge will also lead someone to attempt to deepen information about financial planning so that they have skills in finance, and eventually, they will be applied in the short and long term (Palameta, 2016).In other words, the better a person's financial knowledge, the better his behavior in managing finances (Arifin, 2017).
In addition, village financial management can run better if it involves public elements in its implementation (Shaleh et al., 2020).Notably, the public is the holder of the highest sovereignty in decision-making (Zhang, 2019).Therefore, public activity is one of the primary pillars of achieving public welfare goals (Bere et al., 2020).Public participation mechanisms can also increase the flow of information between the public and the government, leading to the efficiency of village financial management (Siagian et al., 2016).Besides, public involvement in the development stage is vital, starting from the budget's planning, implementation, monitoring, and evaluation stages (Šabović et al., 2021).A higher level of public participation will further enhance the capacity of democracy and the performance of government organizations (Somili, 2022).Public involvement will also directly encourage the creation of transparency and justice to have more impact on most people's lives (Wairimu, 2022).
Several studies have demonstrated that the benchmark for the good financial management of village funds is reflected in financial knowledge and public participation.Arifin (2017) stated that financial knowledge could affect a person's ability to control and design finances, which are more mature for the future.Good knowledge and competence in village apparatus will also produce good village fund finances (Pratolo, Atmaja, & Sofyani, 2020).Furthermore, competence is a characteristic that underlies the effectiveness of individual and organizational performance (Atmadja & Saputra, 2018).In addition, public participation can accelerate the improvement of village accountability performance (Bere et al., 2020).Public involvement is also a communication tool and can create loyalty and a good image of the institution (Somili, 2022).
Nevertheless, (Dwiastanti, 2017) uncovered that financial knowledge did not affect financial management behavior.Indraswari and Rahayu (2021) also believe that public participation did not impact village financial management.This inconsistency in the study results causes a gap, so it needs to be explored more broadly.On the other side, most research related to accountability issues in the public sector is more targeted at urban communities and less involved in rural communities, such as studies in village government (Pratolo et al., 2022).Meanwhile, the number of villagers is quite large, so their aspirations must be considered (Bere et al., 2020).To mediate the research gap described above, the internal control practice is crucial to improve the village's financial management performance (Patiran et al., 2022).
Internal control implementation is a process that aims to ensure that village government activities can run according to the plans and conditions that have been set (Adhinata, Darma and Sirimiati, 2020;Shonhadji and Maulidi, 2022).Through internal control implementation, transparency, accountability, process monitoring, and evaluation of village work programs will be created (Atmadja & Saputra, 2018;Kusuma, Dewi & Tho'in, 2021).Priantono and Vidiyastutik (2022) also believe that the internal control implementation within the scope of government can encourage high morale in accountability for the success of the village government and reduce the occurrence of fraud and violations of the village apparatus' code of ethics.It denotes that the better the internal control implementation over the management of village funds, the better the village fund management performance (Humaira & Batara, 2016).
Theoretically, the institutional issue of a policy in an organization can be seen from three aspects, which refer to institutional isomorphism (DiMaggio & Powell, 1983).Isomorphism is when institutions in the environment become more homogeneous for social, political, or legitimate purposes due to social pressures and demands (Winarni, 2021).DiMaggio and Powell (1983) explicitly divide isomorphism into three categories: mimetic or imitation isomorphism, coercive or formal pressure isomorphism, and normative isomorphism, which is usually associated with professionalism (Pratolo et al., 2020).Departing from this argument, the financial knowledge implementation can be a normative isomorphism, in which a person works because of the demands of his profession (Winarni, 2021).This pressure then encourages someone to work professionally by increasing competence and adequate knowledge (Supriadi et al., 2015).In addition, in this study's context, public participation reflects coercive isomorphism, which believes that public aspirations can affect village financial accountability performance through coercive pressure from village people to the village government (Sofyani et al., 2020).
On the other hand, high public participation and financial knowledge do not seem sufficient to produce effective village and village management (Pratolo et al., 2020).It then encourages an organizational tendency to separate internal activities and focus on the control system (Ramadhan & Arza, 2021).This idea aligns with the perspective of the institutional isomorphism mechanism by Dimaggio and Powell (1983), believing that organizations respond to pressure by adopting specific practices to gain legitimacy and recognition from the public so that they do not have to be oriented to the concrete goals of a policy (Sofyani et al., 2020).Thus, internal control becomes a prerequisite variable for a policy to work well, in this case, the management of village finances.Therefore, to cover the gap elucidated above, this study aims to examine the role of financial knowledge and public participation in the village's financial accountability performance by implementing internal control as a mediator.
Theoretically, the research results contribute to expanding the literature regarding the role of village apparatus in improving the accountability performance of village financial management, particularly by exploring the mediating role of internal control practices.The study results also expand the public sector literature by using village government and its specific nature and the public with its participation.Practically, this study recommends that the Indonesian government, both central and village, pay attention to the internal control implementation in the village financial management process.
Based on the framework explained above, the researchers describe the conceptual model used in Figure 1.

METHODS
This study used a survey method with hypothesis testing based on quantitative data on the relationship between variables obtained from the questionnaire.To have a high return on the questionnaire, the questionnaire was distributed directly to each participant.The population of this research is village fund management officials.The sample was obtained using the convenience data collection method and confirmed as 27 villages in Pekalongan Regency, Central Java, specifically 16 villages in Tirto District and 11 villages in Lebakbarang district.
The research instrument was adopted from several previous studies, i.e., financial knowledge and village financial management by Sumiyati and Icih (2019), public participation by Priantono and Vidiyastutik (2022), and internal control implementation by Ferdian (2015).Each variable was measured using a Likert scale of 1 to 5, where 1 represents "strongly disagree," and 5 indicates "strongly agree."It is commonly performed in survey research in the public sector accounting in Indonesia.Furthermore, in several questionnaire indicators, negative nuanced questions were made to see the seriousness of the respondents in filling out the questionnaire (Jatmiko et al., 2022).
Moreover, this research approach was a self-reporting survey, so there was potential for normative bias, commonly called Common Method Variance (CMV).One of the most frequently used techniques to detect this problem is Harman's Single Factor Test (Tahseen et al., 2017).The principle of Harman's Single Factor Test is to include all research constructs in a factor analysis so that most variances can be explained by one common factor (Juneman, 2013).In line with this, the researchers conducted a bias test to determine the potential for bias or error, complexity, ambiguity, and the questionnaire scale format (MacKenzie & Podsakoff, 2012).Bias is categorized as significant if one latent factor contributes more than 50% (Podsakoff et al., 2003).The test results showed that the highest latent factor accounted for only 44.05% of the variance.Therefore, test bias did not pose a severe threat to this study.
Furthermore, data analysis was carried out using the SEM PLS (Structural Equation Modeling Partial Least Square) method and processed with SmartPLS 3.0.PLS was intended to reconstruct and test the research model (Ghozali., et al, 2015).The PLS approach was deemed suitable in this study as it allows a relatively small sample size and can increase the model complexity (Nitzl, 2016).The stages of using PLS include testing the outer model, evaluating the inner model, and testing the hypothesis (Ghozali, 2016).Meanwhile, the variables tested were financial knowledge, public participation, internal control implementation, and village financial management.

RESULTS
The study results cover data analysis and a comprehensive discussion.The study results were explained using two analysis types: descriptive and verification analyses.First, the descriptive analysis results were measured from each indicator owned by each variable.This analysis is presented with a descriptive statistical test, which provides theoretical and actual conclusions, thus describing the condition of each variable in the study (Nazaruddin & Basuki, 2019).
The descriptive statistical test results in Table 1 revealed that the variables of financial knowledge (FK), public participation (PP), village financial accountability (VFA), and internal control (IC) had the actual mean value more greater than the theoretical mean; thus, it can be concluded that each variable had relatively high value.These results indicate that the understanding of financial knowledge and public participation by village government officials is relatively good.The internal control and village financial accountability more transparent.The next is verification analysis measured by validity test, reliability test, and hypothesis testing of each indicator and variable owned.It is proposed that (Hair et al., 2021) if the construct indicator has a loading value of less than 0.5, it is recommended to delete it because a weak loading value will affect Cronbach's Alpha and Average Variance Extracted (Hair et al., 2021).Based on this opinion, two tests were carried out since, during the first test, it was found that several construct indicators were still below 0.5.After the second test, all the rules of thumb, including convergent validity, discriminant validity, and reliability, were met.The subsequent is the discriminant validity testing results.The test results of the Fornell and Larcker method indicate that the discriminant validity has been determined.It can be seen from the AVE root value on the diagonal order, which is higher than the other constructs (Fornell & Larcker, 1981).In addition, the reliability test was carried out to determine the consistency of the indicators in measuring the construct.Viewed from Table 3, the reliability values of Cronbach's Alpha and Composite were more significant than 0.6 and 0.7, respectively (Chin, Marcolin, & Newsted, 2003;Hair et al., 2021).Therefore, the measurement model assessment results met the requirements, and hypothesis testing could be continued as in Table 4. Based on Table 4, all constructs had Composite Reliability and Cronbach's Alpha values greater than 0.7.In other words, all constructs could be said to be reliable.From Table 5, financial knowledge, public participation, and the internal control implementation had a relationship with village financial management, with all results showing a positive direction (original sample), p-value less than 0.05, and t-statistic more than 1.66 (Hartono & Abdillah, 2009).Therefore, it can be concluded that all hypotheses were accepted.

DISCUSSION
This study revealed that financial knowledge positively affected the village's financial management performance.Hence, village apparatuses with good financial knowledge tend to be more effective in carrying out their work.The results of this study align with research conducted by Sumarsono (2019), Hanifah et al. (2019), Rachmiyantono (2019), Yuliani et al. (2019), Noviyanti (2018), Tawaqal &Suparno (2017), andHalim &Astuti (2015), which stated that financial knowledge had a positive effect on village financial management performance.This finding confirms that it is vital to improve training programs and further study at the university for village apparatus to increase their financial knowledge (Sofyani et al., 2022).This study also verifies the positive relationship between public participation and village financial management.The higher the level of public participation, the better the village's financial management performance.Therefore, public participation is crucial in every stage of village financial management so that the performance results are more targeted, and the benefits will be more felt in the community (Zhang, 2019).The results of this study are also consistent with the research of Indriani et al. (2019), Putra & Rasmini (2019), Mada (2017), Siregar (2020), and Masruhin & Kaukab (2019).Furthermore, this study corroborates that the effective implementation of internal control positively affected the village's financial management performance.This study's result is in line with the research of Artini (2017), Imran (2018), Munti and Fahlevi (2017), and Umaira and Adnan (2019), asserting that the higher the level of internal control implementation carried out by the village government, the better the resulting management performance.
Furthermore, this study proves the positive relationship between financial knowledge and public participation in village financial management through internal control implementation as a partial mediator.Within the scope of the village government, if the village apparatus has high financial knowledge and is balanced with the strict internal control implementation, directly, the village financial management results will be of higher quality.Moreover, it can also be concluded that the higher the level of public participation and the high internal control implementation from the Village Consultative Body (BPD), the better the quality of the village's financial management performance.Although the results suggest a partial mediation effect, these findings have crucial implications.Also, the study findings demonstrate that effective internal control implementation is a prerequisite for the relationship between financial knowledge and public participation in village financial management performance.These results extend studies from Atmadja and Saputra (2018), Patiran et al. (2022), and Priantono and Vidiyastutik (2022), who used the internal control implementation as an independent variable, while this study utilized the internal control implementation as a mediator.Thus, this study can answer the inconsistencies of the results of previous studies and strengthen the findings (Sumiyati and Icih, 2019;Bere, Nursalam and Toda, 2020;Setyaningsih et al., 2020;Suratman, 2022).
From a theoretical point of view, these findings can also support institutional theory, particularly related to coercive isomorphism in the internal control implementation in the scope of village government.DiMaggio and Powell (1983) believe that the internal control practice in institutions is formed in response to pressures and environmental mechanisms around them.This institutional environment pressure then encourages the apparatus to carry out internal control, in this case, supervision, so that the village's financial management performance is more optimal and able to satisfy public expectations (Ramadhan and Arza, 2021).Furthermore, public participation indicates a coercive mechanism of the institutional process.Through effective management of village funds, village independence can be realized through pressure from public participation (Pratolo, Atmaja & Sofyani, 2020).Moreover, this research aligns with the view of normative isomorphism in optimizing the village government's financial knowledge.For this reason, the qualifications and quality of human resources are essential in achieving the appropriateness of village fund financial accountability.Precisely, normative pressure related to the village apparatus's experience and capabilities can determine whether the organization will be considered legitimate (Winarni, 2021).
This research has theoretical and practical implications.Theoretically, the research results offer references and empirical literature exploring the relationship between financial knowledge, public participation, and village financial management by adopting internal control implementation as a mediating variable.Meanwhile, practically, the results of this study have implications for practitioners so that financial knowledge, public participation, and internal control implementation actions can be continuously improved, given that all three affect the success of village financial management.This research also has implications for practitioners considering providing intense training for village apparatus.In this case, implementing village financial management is essential as it allows village apparatus to optimize their performance so that village management funds can be realized for the community's welfare.

CONCLUSION
This study aims to examine and analyze the relationship between financial knowledge and public participation in the village's financial management performance, with internal control implementation as a mediating variable.The results uncovered that financial knowledge and public participation directly affected village financial management.Financial knowledge and public participation also positively affected village financial management, with the internal control implementation partially mediating.Based on the results of research on financial knowledge, public participation and internal control have contributed to village financial accountability.Village apparatus financial knowledge programs can be increased through intense training for village apparatus, competency certification or further education programs from professional organizations.In addition, the Village Government must strive to implement effective internal controls through the use of appropriate authority, clear division of tasks, preparation and use of adequate documents and records, and independent checking of performance.Efforts made to increase public participation in village development include providing socialization and information about village development to the community and inviting the community to participate in village development and development, building space to manage community participation at the village level and strengthening network structures.
This study has its limitations.First, the scope of the research only covered a small area and was limited to the village government in Pekalongan Regency.Hence, caution should be exercised in generalizing the results in a broader context.Further research can also expand the research object to cover a wider area.Second, the study only employed a single approach, in this case, a survey.It did not investigate either the maturity of implementation internal control, financial knowledge and public participation in the village's financial accountability performance.Future studies can use mixed methods by combining survey methods with qualitative methods such as interviews so that a better understanding of the relationship between variables can be obtained.

Table 2 .
Validity Test Results

Table 3 .
Discriminant Validity Test Financial Knowledge Internal Control Village Financial Accountability Public Participation

Table 4 .
Composite Reliability and Cronbach's Alpha

Table 5 .
Result of Inner Weights