Journal of Contemporary Accounting, Volume 3, Issue 2, 2021, 64-76 Journal of Contemporary Accounting Volume 3|Issue 2 An analysis of performance measurement system used in Indonesia local government Ridho Bayu Murti PT. Intraco Penta Prima Servis Balikpapan Timur, East Kalimantan, Indonesia bayupfc_29@yahoo.com Mahmudi Department of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia mahmudi@uii.ac.id Ahada Nurfauziya Department of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia ahadanur@uii.ac.id Follow this and additional works at: https://journal.uii.ac.id/jca Copyright ©2021 Journal of Contemporary Accounting and Authors. Ridho Bayu Murti, Mahmudi, & Ahada Nurfauziya. (2021). An analysis of performance measurement system used in Indonesia local government. Journal of Contemporary Accounting, 3(2), 6476 doi:10.20885/jca.vol3.iss2.art2 Journal of Contemporary Accounting, Volume 3, Issue 2, 2021, 64-76 An analysis of performance measurement system used in Indonesia local government Ridho Bayu Murti1, Mahmudi2, Ahada Nurfauziya2 1PT. Intraco Penta Prima Servis Balikpapan Timur, East Kalimantan, Indonesia of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia 2,3Department Abstract This study examines the antecedents and consequences of the use of the performance measurement system of local government. It aimed to investigate the effect of organizational culture, external pressures, and leadership commitment using a performance measurement system. It also further investigates whether the use of a performance measurement system affects public accountability. The data were collected by distributing a questionnaire to the local government staff. The sample of this study was civil servants of the Special Region of Yogyakarta. There were 95 respondents in this study. In analyzing the data, multiple linear regression was used. The results indicate that organizational culture, external pressures, and leadership commitments significantly affected the performance measurement system. It also found that using a performance measurement system had a significant positive effect on public accountability. Introduction Government institutions tend to emphasize budget realization and input to assess the program's effectiveness and efficacy and understate the program and activity's output and outcome (Mahmudi, 2015). In addition, government institutions tend to focus more on financial reports than performance reports, even though both reports are equally important. Instead of strong motivation to achieve the best performance in program implementation, the ministry/institution and local government emphasize gaining unqualified opinions for the financial report. It further shows that the performance measurement system and government institution performance reports do not work optimally. The performance measurement system is a key to inform public sector performance in terms of economy, efficiency, effectiveness and accountability. Performance measurement system needs systematic and continuous approach to create optimal, clean, and responsible organization management (Ahyaruddin & Akbar, 2017). A suitable and well-implemented performance measurement system in government can create efficient and effective public services, resources allocation, and decision making. In the end, they can improve organization accountability and performance (Ahyaruddin & Akbar, 2017). The implementation of a performance measurement system in Indonesia is based on Precedential Instruction Number 7 the Year 1999 about Government Institution Performance Accountability and Government Regulation Number 8 the Year 2006 about Financial Report and Government Institution Performance. As the follow-up action, the Ministry of Home Affairs established Regulation of Ministry of Home Affairs (Permendagri) Number 73 the Year 2009 about Procedure of Local Government Implementation Performance Evaluation Process. 64 JCA | Volume 3, Issue 2, 2021 The results of the Local Government Performance Evaluation in 2014 showed that only one province achieved a very high standard performance from the total of 33 provinces (3%). Meanwhile, the other 30 provinces achieved high standard performance, and two provinces achieved average standard performance. At the regency level, 108 out of 395 regencies (27%) achieved very high standard performance, while at the city level, 19 out 93 cities (20%) achieved very high standard performance. There are two provinces and 61 regencies that achieved average standard performance. Meanwhile, eight regencies still achieved low standard performance (Ministry of Home Affairs, 2016). The data shows that local governments in Indonesia have not met the optimal standard of performance. The failure of performance accountability implementation in the local government is caused by several factors, including heterogeneity of the Indonesian government institutions, bias reports, and tendencies of reporting only successful programs and neglecting reporting failed programs (Manafe & Akbar, 2014). It is crucial to implement public organization performance measurement since it serves as a reference to improve the performance of organizations in the future (Kurniawan, 2013). Performance measurement of public sectors has three functions: 1) improve government performance, 2) allocate resources and decision making, 3) create public organization responsibility and improve communication within institutions. Primastiwi (2016) states that rather than viewing the performance measurement as a way to improve the effectiveness and efficiency of the institution, government performance measurement in Indonesia is implemented solely to fulfil the requirement from the central government. Most government institutions consistently follow the performance measurement system formulated by Financial Supervisory and Development Board (BPKP) and Indonesia Public Administration (LAN). However, in that performance measurement system, efficiency does not become the aspect of improvement. This condition indicates that the usage of performance measurement in Indonesia is dominated by external factors (coercive isomorphism), formal regulatory compliance without having a normative performance measurement system improvement (Sofyani & Akbar, 2013). This phenomenon is in line with Gudono (2014) that coercive regulation of the implementation of working mechanisms can lead to apparent obedience problems of the institutions. The institutional theory used in this study tries to discover phenomena and factors that cause less than optimal local government performance. The institutional theory explains a tendency of change phenomenon in an organization to achieve homogeneity (Kisworo & Shauki, 2019). This theory is divided into old institutional theory (OIT) and new institutional theory (NIT). These theories have differences in seeing the origin of institutionalization. OIT sees that the basis is value, norms, and attitudes, which are taken for granted. Meanwhile, NIT includes the organization's logical views, including classification, routines, scripts, and schema (Kisworo & Shauki, 2019). Therefore, this study adopted the NIT view since it focuses on the sociological approach that emphasizes the symbolic matrix to legitimize the organization. Numerous factors affect the performance measurement system, including organization commitment, organization culture, and external pressure. These factors can encourage using a performance measurement system to improve employees' performance in achieving organizational goals. Therefore, it is needed for an organization to commit to achieving its goals. Then, it requires every individual in an organization to establish their right and responsibility according to their jobs and functions to encourage collective participation and cooperation of all organization members (Kurniawan, 2013). Organizational commitment comprises organizational loyalty, employee engagement, adaptability of the organizational values and objectives (Kurniawan, 2013). Organizational culture is also considered important in achieving organizational performance since it comprises organizational customs. Customs regulate behavioural norms of the organizational members that further create productive culture. Productive culture helps to create strong organizations which can achieve their objectives (Kurniawan, 2013). 65 An analysis of performance measurement system used in Indonesia … This study aims to investigate the antecedent variable that affects the use of the Indonesian local government performance measurement system and its impacts. This study is also explicitly designed to test the effect of organizational culture, external pressure, and leadership commitment to using a performance measurement system in local government. In addition, it further tests the effect of the performance measurement system on local government public accountability. Literature Review Institutional Theory It is related to the study of the organization, institutional theory often used for the research foundation. It explains the phenomenon and rich and complex perspective in public sector organizations (Gudono, 2014). This theory is considered famous for individual and organizational attitudes. Institutional theory suggests that organizations are affected by normative pressures from external sources such as the environment and internal sources or the organization itself. In implementing a performance measurement system in local government, it is possible to find supporting and opposing aspects concerning organization objectives, such as performance achievement measured by the performance measurement system (Sofyani & Akbar, 2013). According to this theory, an organization tends to move to homogeneity, even though they show some heterogeneity initially. Isomorphism is the term to portrait the process of homogenization (Ahyaruddin & Akbar, 2017). Isomorphism consists of competitive isomorphism, which relates to efficiency (technical and economical explanation), and institutional isomorphism, which develops according to three mechanisms: coercive, mimetic, and normative. Competitive isomorphism believes that competitive forces encourage the organization to adapt to a better, cheaper, and more efficient approach. Institutional isomorphism, on the other hand, institutional effects spread through an organization area called an organization field. It means that organization, in general, is considered area acknowledged as institutional life which are vital suppliers, resource and product customers, rule dependency, and other organizations that provide similar good and service (Garayar & Calvo, 2012). Organizational Culture Everyone in an organization performs organizational culture. According to Pandeni et al. (2017), organizational culture is a system of values believed, learned, implemented, and developed continuously by all organization members. In turn, it unites them and is used as a guideline to achieve company objectives. Therefore, it might affect organization performance directly or indirectly. The organization culture becomes a reference to build interaction within the organization itself. When people join an organization, they bring their values and beliefs into the organization. Organizational culture has a significant effect on performance and further helps improving employees' performance (Tartika et al., 2017). External Pressure External pressure results from formal and informal pressure given to the organization by another organization that depends on the culture where the organization functions. External pressures are closely related to outside of the regional working units (SKPD) such as regulation, executives, society and others (Yesnita et al., 2016). In addition, external pressures are also related to approval and disapproval from managers, stakeholders, society and government upon policies such as permission and restriction (law and norms) implemented in the companies-based organization. The most complex problem that should be addressed is the transparency issue. This issue creates internal and external pressure on the organization's financial structure (Indrayani et al., 2017). 66 JCA | Volume 3, Issue 2, 2021 Management Commitment Management commitment includes management integrity in implementing public accountability. Strategic integrity is broader, deeper, and more demanding compared to legal compliance initiatives. Integrity and legal compliance can be built along with a strong management commitment. Organizational commitment displays affection and emotion toward the organization. It can be seen when an individual conducts strong identification, have intense involvement and self-belonging of the organization. No leader can implement all organization strategies by working alone. Management needs people to work together to achieve goals (Anggraini, 2017). Public Performance Accountability Asrini et al. (2015) state that accountability is a form of public institutions' responsibility to allocate public funds economically, efficiently, and effectively and ensure no fund leakage, wastefulness, and corruption. Therefore, accountability is essential in an organization. Principles based on accountability can improve organizational culture and good governance (Hamdani & Albar, 2016). Accountable organizations can explain their current condition, including decisions and activities they made. Local government accountability is measured based on financial and performance indicators. Performance indicators play a significant role in management control to guarantee that the organization is well-managed to give adequate service to all stakeholders. Thus, performance measurement is vital to establish internal and external accountability (Akbar, 2018). Development Hypothesis Institutional theory suggests some internal factors affecting the implementation of performance measurement systems di local government scope. This study discusses organizational culture as the internal factor. Organizational culture in government organizations can promote effective and efficient organizations in giving services to people. Organizational culture is a system of values believed, learned, implemented by all organization members, and developed continuously to unite the members and guide company behaviours to achieve goals, which affects the performance measurement system indirectly or directly (Pandeni et al., 2017). Concerning performance measurement, Putri (2012) has proved that organizational culture affects implementing a balanced scorecard performance measurement system. Since it has a significant effect on performance, organizational culture improves employees' performance. It will be impossible to encourage employees' performance if there is no organizational culture. Conducting performance measurement is essential to measure and improve employees and organization performance. The use of performance measurement information will be effective if the program executor and employees think that values and culture implemented in the organization related to the performance information improve organizational performance. Top performance culture encourages public sector organizations to use reliable performance measurement systems (Mahmudi, 2015). Based on the explanation above, the first hypothesis of this study is as the following: H1: organizational culture has a positive effect on the use of performance measurement system External Pressure Effects on the Use of Performance Measurement System The implementation of a performance measurement system can be affected by external pressure. The institutional theory claims that organizations find legitimation by fulfilling isomorphism pressure (Ahyaruddin & Akbar, 2017). Isomorphism pressure is related to the surrounding environment of the organization. Isomorphism pressure can be defined as a process in which an organization resembles another within the same population and environment (Lubis, 2017). The most significant external pressures (coercive forces) include government, rules, and institution pressure to adapt their performance measurement system or structure (Yesnita et al., 2016). Institutions need external group support to utilize performance measurement results to formulate 67 An analysis of performance measurement system used in Indonesia … performance strategies and plans and evaluate and maintain budgets. Pramesti et al. (2017) mention that external pressures have a positive effect on performance measurement. Therefore, based on the explanation above, the second hypothesis in this study is formulated as follow: H2: external pressure has a positive effect on the use of performance measurement system Management Commitment Effect on the Use of Performance Measurement System According to the institutional isomorphism perspective, the definition of management commitment is a collective work of organization members to identify conditions and determine working methods to create professionalism (Sofyani & Akbar, 2013). Management with a substantial responsibility toward the organization tends to implement a sound performance measurement system and improve the system. This condition later stimulates normative isomorphism (Sofyani & Akbar, 2013). Nilalowati et al. (2018) define commitment as a state in which individuals take sides of the organization and its goals and desires to maintain their membership. Therefore, it can be interpreted that organization loyalty and involvement lie in management commitment. An organization with a strong leadership and management commitment performs more effectively than an organization that lacks management commitment. Thus, an organization needs to have management commitment to improve performance accountability by using the result of measurement. In implementing a performance measurement system, management commitment can be done by allocating resources, objectives, and strategies in various valuable plans, rejecting resources that impede innovation, and demonstrating political support to motivate and suppress individuals or another party rejecting innovation. Thus, highly committed management improves performance accountability and performance information (Rangkuti, 2018). Ahyaruddin and Akbar (2017) mention that management commitment has a positive effect on the development of performance indicators, performance accountability, and usage of performance information due to the measurement system. The research result of Primarisanti and Akbar (2015) shows that leader commitment is one factor affecting successful performance measurement in the Indonesian government, especially at the regency level. Therefore, the third hypothesis in this study is formulated as follows: H3: leader commitment has a positive effect on the use of performance measurement system The effect of the use of performance measurement system on public performance accountability The availability of performance reports plays essential roles, including increasing performance accountability and performance information usage to support organization decision-making (Sofyani & Akbar, 2013). In institutional isomorphism, there is a term called rule dependency in which an organization is considered to have one area or organizational field that spreads institutional influence comprehensively. The people cannot reach accountability related to resource gathering or fundraising of state government without the government's consent. The Indonesian government launched Akuntabilitas Kinerja Instansi Pemerintah (AKIP) as a government organization performance measurement to check the track record of each organization performance and graphs. Indonesian government uses performance measurement practice as an attempt to improve government institution accountability. AKIP is used at the ministry and national institution level and by the local government as a measurement tool to measure each unit's APBD receiver's performance (Wargadinata, 2019). Conceptually, performance measurement is aimed to improve public organization with accountability as the primary objective. Several concepts and empirical studies show that public organizations' philosophical, technical, and nontechnical factors affect the relationship between performance measurement and accountability (Wargadinata, 2019). Fachruzzaman and Norman 68 JCA | Volume 3, Issue 2, 2021 (2010) state that the performance measurement system has a positive effect on performance accountability. The better the performance measurement system, the greater the accountability of local government performance. A performance measurement system is a process of collecting performance indicator report regularly through the information system of the organization. Performance indicators are tools to improve performance organization. Based on the explanation above, therefore, the fourth hypothesis can be formulated below: H4: the use of a performance measurement system has a positive effect on public accountability Research Method The population in this research was local government employees. This research chose the Special Region of Yogyakarta (DIY) because of the DIY performance measurement report, which shows that the region achieved 99% of the working target, exceeding the target given (Sengguh DIY, 2019). Thus, it caught the researcher's interest in identifying factors behind local government employees' targeted performance in the Special Region of Yogyakarta as the sample. The sample was collected through purposive sampling under the requirement of having a minimum of two years experience and holding at least a low level of managerial position. Research Variable In this research, there are three research variables including 1) independent variable, which consists of organization culture, external pressure, leader commitment; 2) intervening variable, which consists of the use performance measurement system; and 3) dependent variable, which is public accountability. The Use of Performance Measurement System The performance measurement system aims to determine company success in achieving determined objectives, including short and long-term objectives. Therefore, it is crucial to provide a tool for the management to evaluate performance and strategy. A five Likert-scale questionnaire of 10 items adopted from Wijaya and Akbar (2013) was employed to test this variable. The value of Cronbach alpha for this instrument was 0.757. Variable indicators of the performance measurement usage include; operational strategy of regional working unit (SKPD), budget allocation, program supervision, individual career, staff bonus, objective communication, policy realization of regional working unit (SKPD), policy revision of regional working unit (SKPD), newly adopted program, and performance indicator improvement. Organization Culture Organizational culture presents leaders and staff attitudes toward changes (innovation) and organizational policy dealing with innovation as risk-taking. This variable was measured based on respondents' answers to the leader and staff attitudes toward innovation and overall organizational changes and its details related to performance measurement. The questionnaire was used to test this variable with 5 items adopted from Wijaya and Akbar (2013). The Cronbach alpha of this research was 0.84. External Pressure External pressure comes from outside the organization, such as government rules or pressure from a particular community. A five points Likert scale questionnaire with 7 items adapted from Indrayani et al. (2017) was incorporated to test this variable. The Cronbach alpha of this instrument was 0.80. 69 An analysis of performance measurement system used in Indonesia … Leader Commitment Leader commitment is defined as leader supports in the organization performance measurement system used in the organization. This variable was tested using a five-point Likert scale questionnaire with 4 items adopted from Wijaya and Akbar (2013). The Cronbach alpha of this instrument was 0.908. Performance Accountability This variable illustrates the performance accountability level of the managerial level of the organization. This variable was also tested using a Likert scale questionnaire with 4 items adopted from Wijaya and Akbar (2013). The Cronbach alpha of this instrument was 0.796. Data Analysis Method Hypothesis testing in this study used regression analysis formulated as follows: Y1 = β1 X1 + β2 X2 + β3 X3 + ε Y2 = β1 Y1 + ε Results and Discussions The researcher distributed a questionnaire to government employees in the local government of the Special Region of Yogyakarta to collect data. By distributing the first questionnaire to participants, only 95 returned to be analyzed. Therefore, the response rate of this study was considered high (95%). All the returned questionnaires were considered complete and can be used for data analysis. Characteristics of respondents The 95 respondents of this research consisted of 69 male respondents (73%) and 26 female respondents (23%). The majority of the respondents were 31-40 years old (51%), and 92% had bachelor's degrees. The majority of the respondents also had more than ten years of employment. The characteristics of respondents as shown in Table 1. Table 1. Characteristics of respondents Characteristics of respondents Sex Male Female Age < 20 years 21-30 years 31-40 years > 40 years Education S1 S2 S3 Employment < 5 years 5 to 10 years >10 years 70 Total Percentage 69 26 73% 23% 0 25 48 22 0% 21% 51% 23% 87 5 3 92% 5% 3% 2 13 80 2% 14% 84% JCA | Volume 3, Issue 2, 2021 Regression Analysis The regression analysis has two models. The first model is used to identify the effect of independent variables: organizational culture, external pressure, and leader commitment toward the dependent variable, which is performance measurement. On the other hand, the second model of regression analysis is used to test the effect of using a performance measurement system on public accountability. Before conducting regression analysis, a classical assumption test had been implemented, and the result was complete. Below is the result of regression analysis: Table 2. Regression Analysis Result Dependent Variable The Use of Performance Public Accountability Measurement System (Y1) (Y2) Independent Variable Organizational Culture (X1) External Pressure (X2) Leader Commitment (X3) Constanta F R2 Adjusted R2 The use of a performance measurement system (Y1) Constanta F R2 Adjusted R2 0,241 (4,749)*** 0,258 (5,439)*** 0,283 (6,991)*** 0,741 (4,687) 116,9200*** 0,794 0,787 0,892 (9,794)*** 0,382 (1,159) 95,9290*** 0,508 0,502 *** t-value < 1%; ** t-value < 5%; * t-value < 10% Table 3. Hypothesis Testing Result Hypothesis H1: Organizational Culture → The Use of Performance Measurement System H2: External Pressure → The Use of Performance Measurement System H3: Leader Commitment → The Use of Performance Measurement System H4: The Use of Performance Measurement System → Public Accountability β 0,241 0,258 0,283 0,892 Sig 0,000 0,000 0,000 0,000 Note accepted accepted accepted accepted Discussions Whether it is accepted or rejected, the basis of the hypothesis result is on its significance value. If the significance value is less than or equal to 0.05 (≤ 0.05), the hypothesis is accepted. From Table 1, it can be proven that organizational culture has a significant positive effect on the use of performance measurement systems (β = 0,241; p < 0,000). It shows that good organizational culture improves performance measurement system usage. Syachbrani and Akbar (2013) also state that organizational culture is discovered basic assumption pattern, invented and developed by a particular group of community to handle problems caused by external adaptation and integrated internal. Therefore, new members need to learn to understand, think and feel all of the problems mentioned previously. 71 An analysis of performance measurement system used in Indonesia … Organizational culture plays several critical roles in a company as following, 1) unites employees, 2) integrator, 3) organization identity, 4) improve performance, 5) define quality, 6) motivator, 7) leadership style guidance, 8) stakeholder value improvement (Putri, 2012). Employees use organizational culture values as organization identity when they have a complete understanding of the general culture. Values and beliefs are embodied in employees' daily working activities and become individual performance measured. Human resources, systems support individual performance, and technology creates a good performance that later becomes good organizational performance. In conclusion, the main objective of performance measurement is to motivate employees to achieve organizational goals and follow the predetermined and standard organizational culture to meet the target (Ridwan & Yogi, 2018). It can be implied from the result of this study that organizational culture should be socialized and learned by all the organization members and implemented in organizational activities. Organizational culture then may affect the mindset, attitude, and behaviour of the organization members in doing their work and in the end, it can help achieve good performance. Implemented organization culture tends to make the employees act confident toward objects or tasks to achieve goals. In addition, Table 3 shows the significant positive effect of external pressure toward the use of performance measurement system (β = 0,258; p < 0,000). The result indicates that external pressure improves the use of a performance measurement system. Pusparanti (2018) prove that external pressure positively affects the performance measurement system. The most significant external pressure comes from government, regulations, and institutions in adopting structures or systems. Regulations are aimed to control practices and improve them (Yesnita et al., 2016). The result of this study was in line with Wijaya and Akbar (2013), which proved the positive effect of external pressure on the performance measurement system. External provisions are regulations that require institutions to adopt specific performance standards. Many parties are involved in the public organization, which influences decision-making by organizational politics (Primastiwi, 2016). External pressure makes organization members implement operational activities in order and tends to be more open. This result of the study can be elaborated through institutional theory with an isomorphism approach. Coercive isomorphism is always related to the environment. Coercive isomorphism results from informal and formal pressures from one organization to another organization depend on the social and cultural expectations where the organization functions (Yesnita et al., 2016). The implication of this study is the concept that regulations can cause an organization to gain and improve its legitimation to get positive social recognition by emphasizing positive aspects. The involvement of outside stakeholders and supervisors are essential in adopting a performance measurement system. External pressure includes how far the information about organizational goals is given by outside supervisors such as the board of supervisors and board members, lobby groups, or requests from other stakeholders. External pressure shows more intensity of the general public and political supervision of unit performance. Table 3 depicts significant positive effect of management commitment variable to the use of performance measurement system (β = 0,283; p < 0,000). It means that the higher management commitment, the more performance measurement system implemented. This result supports the previous study conducted by Fachruzzaman and Norman (2010), which show the effect of management commitment to the use of a performance measurement system. It is also in line with the research from Dadie and Nugraheni (2016), which proved that organisational commitment positively affects performance. It then can be interpreted that high management commitment showed by employees improves employees’ performance. Management commitment is paramount important in the design and implementation process and usage of the performance measurement system. Concerning institutional isomorphism, management commitment can be defined as a result of collective works of the organization 72 JCA | Volume 3, Issue 2, 2021 members to determine the method and working condition that helps them achieving professionalism. Management with a strong sense of responsibility for the organization is predicted to implement a performance measurement system well and improve (Sofyani & Akbar, 2013). Organizations with a strong management commitment starting from the low level until the high level of management tend to achieve organization goals easier and perform better than organisations without management commitment. Therefore, having strong management commitment is essential for an organization to improve its performance accountability and the better usage of performance information (Davici, 2018). This study implies that management commitment affects public organization performance and many other factors by improving employees' performance in achieving organizational goals. Since achieving organizational goals is the collective work of all organizational members, it needs all individuals to cooperate by fulfilling each right and responsibility in the organization. Good management has a positive impact on professionalism in an organization. In addition, the result of the hypothesis testing of the performance measurement system effect on public accountability shows a significant positive effect (β = 0,892; p < 0,000). Therefore, the more massive the performance measurement system used, the higher the performance accountability. This result confirmed the studies of Fachruzzaman and Norman (2010) and Nadianti (2018) mentioned that performance measurement system also shows a direct positive effect on performance accountability. A sound performance measurement system improves the performance accountability of government institutions. Performance measurement improves public accountability. It is implemented to meet public demand of productivity, openness, and accountability of the public organization. Effective performance measurement needs a suitable system that complies with the organization and institution's characteristics. Incorporating a suitable measurement system for organizational performance creates the possibility to improve organization and individual performance (Nadianti, 2018). Then, to achieve a successful performance measurement system, an evaluation report should be published. When the public involvement in the government's decision to develop policies is higher, chances are high to achieve a qualified program. Performance indicators have a significant role in management control to assure good management and provide practical assistance for the stakeholders. Therefore, performance measurement is vital for internal and external accountability manifestation (Akbar, 2018). From this research result, it can be implied that a performance measurement system is essential to improve government performance accountability. Good accountability can depict any improvement of organization performance and positive changes in employees' behaviours. The performance measurement system is required to help to improve the organization. It plays a role in integrating the performance measurement system process from planning to evaluating stage. The effective performance measurement system has several benefits, including providing a reward and punishment system, evaluating efficiency, effectivity and economic of program and activity, and improving performance (Primastiwi, 2016). For some reason, people tend to worry about reporting the evaluation of government performance to the public. However, this evaluation is essential for the effectiveness of this performance measurement system. By doing so, chances are high to create more awareness of the success and qualification of a program if there is more public involvement in developing government policy. Conclusion This research concludes that a performance measurement system is affected by organizational culture, external pressure, and management commitment. Those variables were proved to have a significant positive effect on the use of performance measurement systems. Further in this research, it is also found that using a performance measurement system had a significant positive effect on accountability. Thus, using a performance measurement system is proved to improve accountability. 73 An analysis of performance measurement system used in Indonesia … The limitation of this research was on the number of respondents, which is government employees of the Special Region of Yogyakarta. The data collected and analyzed based on respondents' perceptions taken by a questionnaire might provide any bias. Therefore, further detailed observation is needed. It is recommended that further research also consider including other independent variables such as government regulation, supported information technology, and local government financial support. References Ahyaruddin, M., & Akbar, R. (2017). Akuntabilitas dan kinerja instansi pemerintah: Semu atau nyata? Jurnal Akuntansi & Auditing Indonesia, 21(2), 105–117. Akbar, R. (2018). 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