ANALYSIS ON BUDGETARY SLACK.

Budgetary Slack is the differential between estimation and realization of the budget (Ueno & Sekaran, (1)). In making revenue budget, there is a predisposition to underestimate the revenue, while, in contrast, in making expenditure budget, the existing predisposition is to overestimate the expenditure. Budget tolerance is ranging between 5% and 10 %. Both executive and legislative have different interest on APBD but it is still called as the joint product of both institutions. Executive achievement is evaluated based on APBD realization and its accountability to legislative. This research was aimed to prove that ethics, bureaucratic culture (in this case, the paternalistic culture), social pressure and individual capacity have an effect on budgetary slack among the budgeting executives at the Coordinator Agency for Region II of East Java Province. Research was conducted at the office of the Coordinator Agency for Region II of East Java Province. The scope of Region II includes the regencies of Bojonegoro, Tuban, Lamongan, Mojokerto, Jombang, Kediri, and the cities of Kediri and Mojokerto. Samples were taken with purposive sampling, and it results in total respondents of 236 individuals from Echelon II and III. Variables considered were ethics, bureaucratic culture (in this case, the paternalistic culture), social pressure, individual capacity and budgetary slack. Data were analyzed using Structural Equation Modeling (SEM). Result gave some indications. Ethics has positive and significant effect on budgetary slack among budgeting executives. Bureaucratic culture has negative and significant effect on budgetary slack among budgeting executives. Social pressure has positive and significant effect on budgetary slack among budgeting executives. Finally, individual capacity has no effect on budgetary slack among budgeting executives.