Fraud Risk Analysis in Public Fund Management Using the Fraud Hexagon: A Case Study of a Provincial Election Supervisory Body in Indonesia
Keywords:
public financial accountability, fraud risk, Fraud Hexagon, public-sector accounting, internal control, election oversight, government internal control system (SPIP)Abstract
Public institutions that safeguard democratic integrity must also demonstrate integrity in their own use of public funds. This study examines how fraud risk emerges across the end-to-end fund management process of a provincial election supervisory body in Indonesia and how existing controls respond to that exposure. An interpretive qualitative single-case design was employed. Evidence was obtained from ten purposively selected informants, limited non-participant observation, and financial, procedural, reconciliation, cashexamination, tax, asset, and reporting documents. Agency theory provides an accountability lens, while the Fraud Hexagon is used as a sensitising framework rather than as proof of misconduct. The findings identify a nine-stage public-fund value chain and show that risk is concentrated at process handoffs. Pressure is mainly organisational and temporal, arising from schedule changes, dense activity cycles, budget revisions, delayed supporting documents, and accountability deadlines. Opportunity is documentary and procedural, arising where payment eligibility, tax treatment, system input, archiving, and audit trails depend on complete and timely evidence. Capability has a dual character: technical expertise enables compliance but becomes a vulnerability when knowledge or system access is concentrated. Evidence for rationalisation, arrogance, and collusion is limited and does not support claims of actual fraud. Existing segregation, layered verification, treasury reconciliation, cash checks, digital records, and oversight reduce risk, however, unit-specific fraud-risk documentation, residual-risk ownership, and structured mitigation remain areas for strengthening. The study contributes a processual, evidence-sensitive framework that shifts analysis from suspected actors to the public-fund value chain and connects compliance controls to risk-based accountability.
