Compliance and Technical Obstacles in Village Financial Management under Ministry of Home Affairs Regulation No. 20/2018: Evidence from Manyar Subdistrict, Gresik Regency

Mochamad Syafii (Universitas Gresik)
Adiba Fuad Syamlan (Universitas Gresik)
Firdaus Indrajaya Tuharea (Universitas Gresik)
Fransiska Dyah Ayu Puspitasari (Universitas Gresik)

Fundamental and Applied Management Journal
Vol. 4 No. 3 (2026): September

The transition to a digital bureaucracy through Ministry of Home Affairs Regulation No. 20/2018 requires village governments to manage their finances transparently and accountably. However, the reality on the ground reveals significant resource constraints in terms of financial literacy, competencies, the completeness of administrative procedures and documentation, and the role of the community in self-reliant village development. The objective of this research is to evaluate and analyze the implementation of financial management in accordance with applicable regulations in an effort to improve and enhance the village economy. This research employs a qualitative method using a policy evaluation research design. Data collection was conducted in a structured manner through observation, interviews, and documentation. The validity of the data in this research was tested through triangulation of data sources and methods, as well as data validation processes. Using purposive sampling and snowball sampling, the study covered data from 23 villages spread across the Manyar Subdistrict, Gresik Regency. The results show that the planning, reporting, and accountability stages in these 23 villages exhibited optimal compliance levels. However, during the implementation and financial management stages, compliance levels ranged from 87% to 100%. This is related to findings of recording errors, non-compliance with reporting procedures, a lack of literacy and competence, the need for periodic technical guidance, and incomplete oversight mechanisms. The conclusion of this research is that government officials should be encouraged to maintain administrative order not only in terms of reporting but also in terms of accountability for returning remaining activity funds by the deadline. Recommendations include adjusting the oversight process to focus on process monitoring, increasing officials’ motivation to maintain administrative order, and fostering the mindset that neatness and order are desirable qualities. The specific recommendations cover several key areas highlighted in this research.