RESOURCE CAPABILITIES AND AUDITOR INDEPENDENCE: A CRITICAL ANALYSIS OF FINANCIAL AUDIT EFFECTIVENESS WITHIN SOUTH SULAWESI'S GOVERNMENT OVERSIGHT SYSTEM

Abstract

This research examines resource capabilities within the Internal Government Audit Apparatus (APIP) in South Sulawesi Province, Indonesia, focusing on their impact on financial audit effectiveness. Utilizing the dynamic governance conceptual framework of resources as core capabilities, the study analyzes four key dimensions: routine combinations, specific objective achievement, non-tradability, and organizational strategy foundations. Through qualitative methodology incorporating in-depth interviews, document analysis, and field observations, the research reveals significant structural and operational challenges undermining audit effectiveness. Findings indicate critical imbalances in auditor staffing distribution across competency levels, with only 2 Primary Expert Auditors compared to 20 Intermediate Expert Auditors, limiting task force formation capacity. Budget allocation issues persist despite mandatory spending policies, with modest increases from Rp 57.16 billion (2023) to Rp 59.95 billion (2024) proving insufficient for growing operational demands. Structural constraints on auditor independence emerged as particularly significant, with auditors lacking legal protections against potential repercussions when findings conflict with leadership interests. While comprehensive regulatory frameworks exist, implementation effectiveness faces substantial challenges due to competence limitations and personnel shortages. The study contributes to understanding resource challenges in developing administrative contexts and offers insights for strengthening audit capabilities within complex political environments. The findings suggest that enhancing audit system effectiveness requires addressing structural vulnerabilities in auditor protection, resource allocation, and professional development, with implications for governance improvement in regional administration systems