Katryn Natania Mega, Jantje J. Tinangon, Stanley Kho Walandouw

Preventing fraud in village financial management: the role of competence, systems, and anti-fraud awareness

Introduction

Preventing fraud in village financial management: the role of competence, systems, and anti-fraud awareness. Prevent fraud in village financial management. This study explores the critical roles of village apparatus competence, financial systems, and anti-fraud awareness in prevention efforts.

Abstract

Fraud is an illegal act in the form of deception, concealment, or violation of trust committed by a person or organization with the aim of obtaining money, property, services, or to protect personal or business interests. Prevention of fraud needs to be done so that the organization, in this case the village government, does not suffer losses. The purpose of this study is to examine and analyze the influence of the competence of village apparatus and the village financial system on fraud prevention, as well as to examine and analyze whether anti-fraud awareness can moderate the influence of the competence of village apparatus and the village financial system on fraud prevention. This research was conducted in villages in East Bolaang Mongondow Regency, with all village heads and finance heads as respondents. The data analysis process to determine the results for outer model testing, inner model testing, and hypothesis testing. The results of this study are that the village apparatus competence and the village financial system have a significant positive effect on fraud prevention. This means that the higher the competence of village apparatus and the better the implementation of the village financial system application, the greater the prevention of fraud. The next result is that anti-fraud awareness strengthens the influence of village apparatus competence on fraud prevention. However, anti-fraud awareness weakens the influence of the village financial system on fraud prevention.

Review

This study tackles the critical issue of fraud prevention within village financial management, a topic of significant practical importance for local governance and public trust. The paper effectively identifies three key pillars—competence of village apparatus, robustness of financial systems, and anti-fraud awareness—as crucial in mitigating fraudulent activities. The initial findings that higher competence and better implementation of financial systems directly and positively impact fraud prevention are intuitive and reinforce established best practices, providing valuable validation for ongoing efforts to professionalize village administration and modernize financial tools. While the study's focus on a specific regional context (East Bolaang Mongondow Regency) offers a tangible setting, the abstract could benefit from more detailed methodological transparency. Although it states that "all village heads and finance heads" were respondents, clarifying the total sample size and the specific data collection instruments would enhance the rigor presented. Furthermore, while the abstract mentions "outer model testing, inner model testing, and hypothesis testing," explicitly naming the statistical approach (e.g., Partial Least Squares Structural Equation Modeling - PLS-SEM, given the model testing terminology) would provide greater clarity on the analytical framework employed. The most intriguing, and perhaps perplexing, finding is the moderating role of anti-fraud awareness: strengthening the effect of competence but *weakening* that of the financial system. This counter-intuitive result warrants a deeper theoretical explanation and discussion in the full paper, as it suggests a complex interaction that challenges conventional assumptions about systemic controls. Despite some areas for enhanced methodological detail, this research makes a valuable contribution by empirically examining a multifaceted approach to fraud prevention in a critical public sector domain. The findings underscore the importance of investing in human capital through competence building and implementing robust financial systems. The nuanced moderating effects of anti-fraud awareness, particularly its unexpected impact on systems, open new avenues for discussion and future research into how different fraud prevention strategies interact. The study provides a solid foundation for policymakers and village administrators seeking to strengthen financial integrity and accountability at the grassroots level.

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