The Effect Of Fiscal Potential, Fiscal Needs And Internal Control On The Provincial Intergovernmental Transfer Allocation In The Districts/Cities In North Sumatera – Indonesia.

This study aims to look at the effect of fiscal potential, fiscal needs, internal control on the provincial intergovernmental transfer allocations in the North Sumatra province with the financial and economic performance as the intervening and contingency variables. The sample in this study covers 25 districts/cities in the North Sumatra province throughout the year of 2005-2012, that is selected using the purposive sampling method. The variables are analyzed using a pooling of data with eviews 7.0 tools and non-linear structural equation models with WarpPLS 3.0 software. The results conclude that for the first hypothesis, the variable of fiscal potential in the form of the realization of the BPHTB and PBB, the fiscal needs of a regional size, total number of villages, CCI, total population in the form of internal control, weakness on the accounting and reporting control systems, weakness on the control and budget implementation system, and weaknesses on the internal control structure, the financial Performance in the form of the increase in the PAD, the increase in DAU, DAK, DBH and the opinion of the audit board and economic performance are proxied by the increase in the GDP, decrease in poverty, decrease in unemployment and the human development index and inflation affect simultaneously the provincial intergovernmental transfer allocation. While the second hypothesis concludes that the variable of the GDP is the only variable that serves as a moderating variable and the third hypothesis concludes that the variables of the increase in PAD, increase in DAU, increase in DBH and the opinion of the audit board serves as the intervening variables to the provincial intergovernmental transfer allocation, the variable of DAK does not function as an intervening variable