Strengthening Financial Accountability in Village-Owned Enterprises: Policy Recommendations from a Participatory Case Study in BUMDes Wukirsari, Bantul, DI Yogyakarta

Abstract

This study aims to enhance financial accountability in Village-Owned Enterprises (BUMDes), with a specific focus on BUMDes Wukirsari in Bantul, Yogyakarta. BUMDes, as community-based economic institutions in Indonesia, often face challenges related to poor financial management, limited transparency, and low adoption of digital tools. Through a Participatory Action Research (PAR) framework, this international community service initiative followed a four-stage spiral: planning, action, observation, and reflection. The planning phase involved a preliminary needs assessment to identify gaps in financial reporting and governance. The action phase focused on stakeholder discussions to understand current financial practices. During the observation phase, data were collected through participatory workshops and stakeholder feedback. In the reflection phase, findings were collaboratively analyzed to inform practical improvements and formulate policy recommendations. The intervention yielded significant results, including improved budgeting practices, the implementation of quarterly financial reporting, and increased awareness of legal frameworks such as PP No. 11/2021. The introduction of basic digital tools like Microsoft Excel enhanced the accuracy and clarity of financial documentation. The program also promoted greater transparency, encouraged participatory governance, and emphasized performance-based budgeting. Based on these findings, the study proposes several policy recommendations: strengthening regulatory literacy, standardizing financial reporting formats aligned with SAK ETAP, integrating user-friendly accounting software, formalizing internal audits, and promoting structured financial disclosure to the community. These recommendations aim to support more transparent, accountable, and sustainable financial management in rural enterprises. Overall, the study highlights the importance of participatory, reflective approaches in driving institutional transformation at the village level.