The Effect of Organizational Justice on the Budgetary Slack of Local Financial Management

  • Otniel Safkaur, Bill Pangayow


Budget gap is the percentage increase or decrease in revenue expenditures during budget preparation to achieve balanced revenues. This gap is significant in public accounting sector to easily obtain predetermined budgets. This study aims to examine the effect of procedural, interactional and distributive justice on budgetary slack by regional financial managers. Data were obtained from 4 villages in Skouw Mabo, Skouw Yambe, Skouw Sae, and Mosso in Muara Tami District, Jayapura City, which are the border regions of Indonesia and Papua New Guinea. The purposive sampling method was used to obtain data from the regional financial management. The results showed that procedural justice affected budgetary slack, as opposed to interactional and distributive justice. Furthermore, procedural justice is important and needs to be considered in budgeting for regional financial management. The higher the perception of justice towards the procedures carried out in the regional financial budgeting process, the lower the budgetary slack of the management apparatus.