Study on Possibility of Applying Risk Management in Village Fund Management in Landak Regency Indonesia

This study is focused on study on possibility of applying risk management in village fund management in Indonesia. It is intended to determine the possibility of applying risk management in village fund management, the supporting and inhibiting factors in application of risk management, and strategies in implementation of risk management. Research design used was qualitative with exploratory approach. Data in this study were collected by interviewing the respondents (purposive sample), document study and field observation. Informants in this study are Regent of Landak, Regional Secretary of Landak Regency, Spokesperson of DPRD of Landak Regency, Head of Office of Social Service, Community Empowerment, and Local Government of Landak Regency, Head of Division of Village Financial and Asset Division, Head of Section of Village Government Budget, Chief of Karangan Village, Chief of Serimbu Village, and Chief of Amboyo Inti Village. The result demonstrates that process of implementing risk management in village fund management is limited to risk assessment, consisting of risk identification, risk analysis, and risk measurement, and then to build possibility of applying risk management using scenario planning which result in that it is possible to apply risk management by making regulations and preparing human resources. The supporting factors in applying risk management lie within political development aspect, and technological development aspect encourages the application of risk management. The inhibiting factors derive from individual threat, i.e. habits and fear of the unknown and organizational threat, i.e. Inertia Group. There are two approaches in preparing strategies for implementing risk management, i.e. top-down and bottom-up. And the strategies are making regulations on application of risk management, preparing human resources, How to cite this paper: Simangunsong, F. and Mario, A.I. (2018) Study on Possibility of Applying Risk Management in Village Fund Management in Landak Regency Indonesia. Open Journal of Social Sciences, 6, 271-297. https://doi.org/10.4236/jss.2018.69019 Received: August 27, 2018 Accepted: September 23, 2018 Published: September 26, 2018 Copyright © 2018 by authors and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/


Introduction
Village, as unit of legal community close to society with all backgrounds and needs, has vital role in national life of Indonesia. Government seriously promotes village as evidence of political promises Joko Widodo and Jusuf Kalla made during their presidential-vice presidential election campaign of 2016 [1].
Government issued a policy, i.e. Law No. 6 of 2014 on Village, to encourage village finances by Village Fund (Dana Desa (DD)). Table 1  In addition, among corruption cases that also occurred in West Kalimantan and East Java until 2017, there were alleged misappropriation of fund in 452 villages, fictitious activities in 214 villages, and irregular activities by 818 cases [4].
Similarly, corruption cases in Landak Regency, West Kalimantan Province can be seen in Table 2.
According to Table 2, it is stated that there are several cases of village fund misappropriation in Landak Regency. It is mainly caused by village chief's lack of knowledge regarding the use of village fund.
In addition, other problem in management of village fund in Landak Regency  Village Administration Report (ILPPDes) [5]. Furthermore, there is limited capability of the village in managing village fund because village apparatus are required to apply the use of village und according to rule [6]. Other regions also encounter same issues regarding management of village fund, as seen in Sanggau Regency where recently a case of village fund misappropriation occurs in 2 (two) of 163 villages [7].
There are considerable number of cases of village fund corruption that they potentially cause problems if not minimized. In management of village fund, there are many risks that can occur due to poor management. Risk is undesirable [8]. However, risk is also unavoidable part of individual and organizational work life, both in public and private sectors. Various risks in village financial management may occur, such as error in the implementation of activity that is not according to plan prepared by village.
It is a disadvantage when risk fails to be anticipated beforehand by individual or organization that can also threaten the achievement of purpose and objectives of the organization. Risk that is associated with uncertainty occurs due to lack of or unavailability of sufficient information regarding what may happen. Uncertain thing can be advantageous or disadvantageous.
Due to its uncertainty nature, risk needs to be managed. Risk in implementation of village fund that deviates from the planning can cause potential large loss and, if this continues to occur, it may cause more problems in public services, especially in rural regions.
Risk can be minimized or, even, eliminated by risk management. Risk management is expected to provide solution to handle risk that occurs unpredictably.
Government has made regulation regarding risk management under Govern-  chiefs whose educational background are middle school (SMP). As stated in Law No. 6 of 2014 on Village, village apparatus shall has at least high school (SMA) or equivalent educational background. Therefore, with considerable amount of village fund, the lack of knowledge on its management will potentially create errors in using it. Village government is not only to manage Village Fund sourced from State Budget (APBN), but also to manage Village Fund Allocation (ADD), share of local tax and retribution, provincial financial aid and village own-source revenue (PADes). Regulatively, these whole financial affairs of village shall be documented in Village Budget (APBDes) which management follows several instructions from rules and regulations. Village Government can no longer manage village fund carelessly, despite the fact that authority as budget spender is in the hand of village chief.
Village financial management is whole activities consisting of planning, implementation, administration, reporting, and accountability of village finance.
The first thing to consider is planning, because it is the basic requirement in vil- and 5) obligation for preparing accountability report by village is inefficient due to overlapping regulations [11].
In the aspect of administration, there are five issues, i.e. 1) timeframe for cycle of village financial management is difficult to follow; 2) Standard price unit for goods/services used as reference by village in preparing Village Budget is still unavailable; 3) transparency of plan for using and accountability of Village Budget is still low; 4) accountability report made by village still deviate from standard and is prone to manipulation, one of reasons is due to ill-defined accounting system being used, and 5) Village Budget prepared is unable to fully include village's needs because it was not made in participatory manner.
As for the aspect of control, there are three issues, i.e. 1) regional inspectorate's effectiveness in the control of village financial management is still low; 2) public complaint channel is not managed well by all regions and there is no clear mechanism for submission of complaint; and 3) scope of evaluation and control by district head is still unclear. Under the aspect of human resources, there is potential issue where assistant has potential for misappropriation by exploiting the lack of knowledge of village apparatus. This reflects on previous similar program, i.e., National Program for Community Empowerment (Program Nasional Pemberdayaan Masyarakat (PNPM)) for Village, where, instead of helping the community, the assistant did corruption and fraud.
Other problems are, such as, limited competent human resources in the making of medium-term regional development plan (RPJMD), Strategic Plan (Renstra), Work Plan (Renja), Village Budget (APBDes) that serve as reference in village administration. This weak planning results in poor performance of village Village Fund Allocation (ADD) in these 10 villages has been processed [12].
Furthermore, many supporting facilities and infrastructures are unavailable or limited, such as no electricity, damaged roads, broken bridge, unavailable cellphone signal and no land access for certain villages thus accessible only by river.
With no electricity and difficult access of transportation, computerization of financial management is very difficult to be implemented [13].
Similarly, the facilities and infrastructures aforementioned are needed to support the success of office activities. Below, facilities and infrastructures owned by Office of Social Service, Community Empowerment and Village Administration of Landak Regency: Data on Table 4 shows number of facilities owned by Office of Social Service,    IV  III  II  I   1  2  3  4  5  6  7  8  9  10  11  12 1.  [15].
The great amount of personnel expenditure in indirect expenditures resulted in minimum capital expenditure and goods and service expenditure in direct expenditures, and thereby program and purchase of facilities and infrastructures by Local Bureaucracy (OrganisasiPerangkat Daerah (OPD)) were still unaccommodated. Table 9 shows amount of budget for purchase of facilities and infrastructures: Data in Table 9 suggests that the amount of budget to improve facilities and    Without sufficient managerial skills, bureaucrats will only become puppet in political play without clear and strong sense of self. Therefore, every bureaucrat should master management aspect in order to achieve organizational purpose, so that any risk that hinder organizational purpose can be minimized [16].
Government organizations are established with vision and missions to achieve purpose according to the plan, and so are local government organizations. In  (1) and (2)  and should implement internal audit effectively marked by level 3 in 2019 [18].
Risks occur in management actions that make use of existing human resources and operational process of the control activities. Risk that is not handled shall affect the success of local organization to achieve its purpose. Therefore, heads and staff of organizational units must be responsible on issues or risks they will face and on activities they are either able or unable to implement in order to achieve the purpose. Organizational activities of local agencies are also in-

Problem Statement
Based on issues identified, author has formulated problems to study as follows: 1) How is the possibility of applying risk management in village fund management in Indonesia?
2) What are the supporting and inhibiting factors for application of risk management in village fund management in Indonesia?
3) What are strategies to handle the inhibiting factors for application of risk management in village fund management in Indonesia?

Theoretical Framework
In rural development, village receives fund from central government by using  Furthermore, application of risk management in public sector requires support in its implementation. The supporting factors in the application of risk management are nature of workplace, technology, economic shock, competition, social trend and world politics. And with support in applying the risk management to government organizations, it is expected to find solution to determine the risks and to provide input on decision in village fund management.

Work Hypothesis
Implementation of risk management can be performed in village fund management through stages of risk assessment, i.e. Risk Identification, Risk Analysis, and Risk Measurement.

Research Method
Author intends to conduct exploratory research by considering administrative phenomena currently happening. Administrative research conducted with object of village fund management is expected to answer all issues discussed in this thinking with theoretic, legalistic, empiric, and innovative advantages [28].
Considering that this exploratory research is related to a condition or situation or thing that has never occurred or been done before, there is a right method to be used to analyze the issues, i.e. scenario planning. "Scenario Planning is an asset in that it has brought about a variety of interpretations about what scenario planning is" [29]. In addition, other definition of scenario planning is an effective futuring tool that enables planners to examine what is likely and what is unlikely to happen, knowing well that unlikely elements in an organization are those that can determine its relative success [30].
Theoretical process is closely related to activity to explain on the problems using relevant theory and to build conceptual framework to be used in research.
With conceptual framework, research will be more focused to find the root of problems. Therefore it is important to make conceptual framework so that the research will more focused. And definition of operational concept is that "Operationalization in qualitative research is detailed description of how a researcher collected and thought about the specific data that become the basis for concepts.
Elaboration above suggests that operational definition of researcher's concept can be made by providing detailed explanation on a concept by using collected data and thinking related to data specifically used as basis for the concept. Research is conducted to determine the possibility of applying risk management in village fund management in order to make policy regarding village fund management so that the risks can be managed properly, knowing that poor management of village fund will cause problems, both individual and organizational, thus it is necessary to handle inhibiting factors in application of risk management.
In the conceptual framework of this study, author elaborates the concept broken down into more detailed themes and sub-themes to be used as guide in interview. This step is intended to facilitate author to analyze existing problems and to find solution for the problems. As shown in Table 11.
Data required in this study was primary data obtained from informants through interview, focused discussion, and questionnaire and poll. And the secondary data was obtained from Regional Data in Numbers, issued by Statistics Indonesia (Biro PusatStatistik (BPS)), books, reports, journals, proceedings, etc.
According to Simangunsong, "In qualitative research of public administration, informant is vital, not merely to provide response, but also to serve as source of accurate information and is admittedly considered capable of giving information comprehensively and worth to ask for information" [32].
In this study, the key informant is Regent of Landak, who serves as policy    Table 12 shows classification of informants.
In order to complement data in this study, related documents are required.
Documentation technique is intended to obtain data directly from location of study, consisting of relevant books, regulations, activity reports, photos, documentary films, and other relevant data. Documents needed for information in this study refer to documents of Central Government and Local Government. Table 13 shows documents of Central Government and Local Government used as sources of information that are considered relevant under academic view.

Result
Result of study on possibility of applying risk management in village fund management can be concluded as follows: 1 -Limited budget of Local Bureaucracy is a risk that occur in financial asset and is a disadvantage for organization. The impact is that several important activities can not be implemented to support village fund management. If this is not to be responded, the consequence is that programs and activities that have been planned will not be able to be held.
-Low quantity and quality of human resources, poor understanding of the leader regarding village fund management, lack of information received by community regarding the use of village fund, thus the control is weak, are risks that occur in asset of human resources and are disadvantages for organization. The impact resulted from these risks is that the making of RPJMDes, RKPDes, and Village Budget (APBDes) will not be in line with the needs of village community. Further impact is that low innovation on the issue of village fund, rampant misappropriation and no control from community will be most likely to happen. The consequences are, if these risks are not to be responded, that the making of planning documents and data will deviate from the standard and quality of the documents will decrease. Also, policies that are not in line with prioritized use of village fund according to rural areas, and no transparency on the needs of village community. these are not to be responded, that there will be confusion among village officials regarding programs and activities that have been planned, and no guidelines in the implementation, thus resulting in administrative error. -Misappropriation of village fund by several village officials is the risk that occur from individual morality and is a disadvantage for organization. The impact is that village development will be hindered. The consequence is, if this is not to be responded, that it will create new corrupt persons who misappropriate village fund.  Habit is action conducted regularly towards same thing and is recognized by people. Due to habit, when confronted to risk management which is a new thing considered as an extra duty, individual will tend to resist.
-Organizational resistance: inhibiting factor in organizational resistance that hinder the application of risk management is group inertia. Group inertia may occurs when individual wants to change management by applying new system that bring advantage to organization. However, group in the organization tends to disagree with the change due to various reasons, and thus individual will tend to agree with resistance of the group and fails to apply the new issue, i.e. risk management. shops. -Sources of information: Sources of risk can not only be seen from sources of information, namely analysis of documents (financial report, condition of human resources, rules and regulations), monitoring and observation, and interview with informants, but also form statistical data of village development, consultation place for risk management, and the community who observes the risks. b) Risk Analysis. In analyzing the risks that may occur in village fund management through risk chain, it is necessary to perform more detailed risk analysis using probability matrix along with risk level to facilitate the analysis of risk with impact of major loss and with consequences that are easier to analyze. c) Risk Measurement -Hidden costs/benefits of losses and gains: author recommends having good management of human resources, improvement of facilities and infrastructures, especially village hall, and acceleration of process of regulation-making. -Dimensions of exposure to risk: author recommends promptly accommodating risks that regularly occur with major losses through improvement of capacity of human resources, application of good management of human resources, establishment of revenue sources by establishing Village-Owned Enterprises (BUMDes) and mapping of revenue sources, planning of road repairs and improvement of facilities and infrastructures, and control towards village officials. -A brief comment on frequency and magnitude measurement terminology: More advanced risk measurement is needed by using probability distribution (qualitative description on frequency of the risks), risk sensitiveness is meas- This study on risk management needs more advanced and more detailed research because, here, author limits the scope only on risk assessment since it has not been conducted in Landak Regency. In addition, local government should make regulation as basis for application of risk management in every local bureaucracy, so that every decision will consider risks that may occur. Specific on village fund management, it should be integrated directly in Village Financial System Application to facilitate village officials in determining risks according to problems that every village faces, and eventually to make policy to handle the risks. To handle individual resistance against application of new thing, it is necessary to change the behavior and perspective by giving reward and punishment so that there always be consequences in each duty.

-Organizational Resistance
To handle group resistance, it needs to share the perspective to apparatus that innovation is needed in order to enable government organization to always provide best public services by administrating government appropriately.
3) Strategy to handle the inhibiting factors on possibility of applying risk management in village fund management in Landak Regency, West Kalimantan Province (Study on Office of Social Service, Community Empowerment and Village Administration). a) Top-Down Approach Giving recommendation to leader that application of risk management is good for taking all necessaries based on risks that occur and losses resulted from the risks. b) Bottom-Up Approach Giving support to the bottom level to consider interaction between related organizations, aspect of interaction and relationship between government and community, and to be able to implement public interest based on the risks.