Implementation of Internal Control Systems and Their Implications for Performance Audit Findings: A Case Study of Regional Government Organizations in Parepare City

Abstract

This study aims to analyze the implementation of the Internal Control System (ICS) in performance audits of Regional Government Organizations (OPD) in Parepare City, examine its implications for performance audit findings, and identify supporting and inhibiting factors affecting audit quality. This research employed a descriptive qualitative approach. Data were collected through observation, interviews, and documentation involving 15 informants from the Parepare City Regional Inspectorate, the Investment and One-Stop Integrated Services Office (DPM-PTSP), and the Population and Civil Registration Office (Disdukcapil). Data analysis consisted of data reduction, data presentation, and conclusion drawing. The results indicate that the implementation of ICS has been carried out through five elements: control environment, risk assessment, control activities, information and communication, and monitoring. However, its implementation has not been fully optimal due to weaknesses in the consistency of standard operating procedures, data availability, human resources, monitoring, and follow-up. Performance audits have adopted a risk-based approach through the Annual Supervision Work Program (PKPT). Weak internal controls may increase the likelihood of audit findings and recurring findings, whereas effective controls can help organizations identify and correct problems at an early stage. Supporting factors include auditor competence, integrity, data availability, leadership support, risk-based auditing, and information technology. Inhibiting factors include limited auditors, time and budget constraints, inadequate data and documentation, regulatory changes, limited auditee responsiveness, and delays in audit follow-up.