Riskmanagement Design on Village's Financial Activities: A Case Study of Barabali Village, Central Lombok

Abstract

This study aims to develop risk management in a village’s financial activities. Such management is aimed at assisting villages, local governments and even the central government in looking at the village’s financial condition and providing solutions to control problems found in its financial activities. This research uses a qualitative method. The data used in this study are primary and secondary data. The primary data was collected through interviews and observation. The secondary data was obtained through documentation and a literature study. The risk management concept from the Project Management Institute is used in this paper. The impact and possibilities’ scale are adopted from the Ministry of Finance's risk guidelines, as are the level and risk appetite. Two theoretical parameters are adopted in the research by considering the conformity of a village in using them. The second one, agency theory, is used to see the role of principal and agent in village’s financial activities. This research shows how risk management may help villagers manage their financial activities. This instrument can be used by the relevant regional work unit (OPD) in evaluating villages. Additionally, the result of the study can be used as a groundwork plan in conducting an audit by government internal supervisory apparatus (APIP). Keywords—Risk management, risk, control, village