Human Capital Disclosure Practices: Do Performance and Budget Controlling Matter? (Evidence from Indonesian Local Governments)

This study aims to explore the effect of performance and budgeting control on human capital disclosure in Indonesian Local government in accordance with institutional theory. The reason for doing this study is the big budget allocation for employee expenditure in Indonesian local government and the existence of a Law on State Civil Apparatus but the lack of human capital disclosure in local government financial statement. It is a study on 140 local governments with cluster sampling and the hypothesis was proved by multiple regressions. The results showed that there was an effect of performance on human capital disclosure, while the budget controlling was not significant. Further statistical tests show there are differences in the local governments performance which located at Java Island and outside of Java. Future studies can also try to test the disclosure of human capital using only the four items index which widely expressed by local governments in Indonesia. There are about employee pay and benefits, employee awards, pension/old age insurance, and employee protection.