The effect of religiosity and moderation of morality on fraud prevention in the management of village funds

* Corresponding author, email address: yatikmei77@gmail.com ABSTRACT This study aims to determine the effect of village apparatus competence, internal control systems and religiosity on fraud prevention in the village fund management with morality as a moderating variable. This study uses a survey method with a questionnaire. The population consists of all village officials in Sidoarjo Regency. The sample was taken using a proportionate stratified random sampling, and finally 76 villages were obtained with the category of developed villages, developing villages, underdeveloped villages, and very underdeveloped villages. The data analysis technique used in this study is PLS-SEM using Smart-PLS 3.0 software. The results of this study prove that village apparatus competence has an effect on fraud prevention in village fund management, internal control system has no effect on fraud prevention in village fund management, and religiosity has an effect on fraud prevention in village fund management.Morality is not able to moderate the influence of village apparatus competence, internal control system and religiosity on fraud prevention.


INTRODUCTION
National development can be achieved if the government is able to create programs that can encourage the villages' success in the country. One of the government programs in striving for village success is the available village funds provided by the government every year (Bahtiar, 2015). So far, village funds provided by the government have increased every year (kemenkeu.go.id). The government program in the form of village funds aims to encourage the realization of national development immediately. However, the results of monitoring carried out by Indonesian Corruption Watch (ICW) from 2015 to 2018 showed that cases of corruption in the village budget sector were increasing every year. For example, in 2015, there were 22 cases of corruption and increased to 48 cases in 2016. In 2017, it increased quite drastically by 98 cases.
In 2018, there were still 96 corruption cases found. Even though corruption cases found in 2018 had decreased, according to ICW, the village budget sector was still in the sector that was most prone to corruption.
ICW also conducted monitoring based on actors in corruption cases in the village budget sector in 2015-2018. The village head was the dominant actor in corruption cases. The corruption cases involving the village heads continued to increase from year to year: 15 village heads in 2015, 32 village heads in 2016, 65 village heads in 2017, and 102 village heads in 2018. Furthermore, according to ICW, the village head is not the only actor or perpetrator in the corruption case in the village budget sector. In 2015-2017, there were 32 other perpetrators in corruption cases from the village apparatus and 3 perpetrators from the family of the village head, and this number increased to 56 perpetrators in 2018. Based on such evidence, it can be concluded that village heads and village officials should have been the most influential in preventing fraud in the management of village funds. Yet, they were not.
In 2018, ICW conducted a corruption mapping by region/ province and they found that the most cases of corruption were in East Java Province with 52 cases. From 2016 to 2018 ICW found that 41 village heads in East Java were involved in corruption cases of village funds, consisting of 13 people in 2016, 15 people in 2017, and 13 people in 2018. Even though there was a decrease in 2018 compared to previous years, according to ICW, corruption cases of village funds still dominated in East Java throughout 2018.
The number of fraud cases in Sidoarjo Regency handled by Sidoarjo State Prosecutor's Office in 2015 was 19 cases of corruption and 7 cases related to village funds. Meanwhile, in 2016 there were 22 cases of corruption and 17 cases related to village funds. Again, in 2017, there were 19 cases of corruption and 6 cases related to village funds (m.timesindonesia. co.id, 3/08/2017). Then, in 2018 a similar case was found related to village fund corruption committed by village officials with a state loss of IDR 52 million (news.detik.com, 15/10/18). This indicates that there are village officials who still have the potential to commit fraud. Although cases related to village funds experienced a decline in 2017, the cases increased again in the following year.
Fraud prevention is an effort or action taken to suppress or prevent the causes of fraud (Laksmi&Sujana, 2019). Fraud prevention can be done in various ways, one of which is by increasing the professionalism and competence of village officials in managing finances so that the economic and social objectives of the village government can be achieved (Atmadja & Saputra, 2017). If the village government has quality human resources, the quality of financial management will also be good. This is supported by good educational background, training and experience in finance (Wardani and Ika, 2017). The results of research conducted by Atmadja & Saputra (2017), Wonar at al. (2018), Rahayu at al. (2019), Laksmi and Sujana (2019), and Arthana (2019) show that the competence of village officials has an effect on fraud prevention.
In addition to the competence of village officials, an internal control system is also a factor in efforts to prevent fraud. The internal control system in village financial management is the Village Consultative Body (BPD), so that the internal control system has a direct influence on good governance and has implication in fraud prevention (Fadilah, 2011). This is in line with the results of research conducted by Atmadja & Saputra (2017) and Laksmi & Sujana (2019) that the internal control system has an effect on fraud prevention in village financial management. However, this research contradicts the research conducted by Wonar et al. (2018) and Rahayu et al. (2019) that the internal control system has no effect on fraud prevention in village financial management.
The factor from within the individual that can influence a person to commit fraud is religiosity. If someone has a high level of religiosity, he/she will have no intention to commit fraud. On the other hand, if someone has a low level of religiosity, he/she tends to have the intention to commit fraud. Someone will not do deviant actions, if he/she has strong religious knowledge. This is in line with research conducted by Ananda et al (2016); Purnamasari & Amaliah (2015) and Safitri (2017) that religiosity has a positive effect on fraud prevention.
Another factor that can prevent fraud is the good morality possessed by each individual. Morality can be seen from a person's personality and mindset in upholding honesty and fairness. This mindset can reduce the desire of individuals to commit fraud (Wonar at al., 2018). This is supported by research conducted by Atmadja and Saputra (2017) that morality becomes moderation for fraud prevention. This is in line with the research conducted by Wijayanti and Hanafi (2018); Rahimah and Lysandra (2018) and Aranta (2013) that individual morality has an effect on fraud prevention.
This study develops previous the studies conducted by Atmadja & Saputra, (2017) on fraud prevention in village fund management. The present study added a variable of religiosity as a moderating variable, as conducted by Purnamasari & Amaliah (2015) entitled "Fraud Prevention: Relevance to Religiosity and Spirituality in the Workplace". Based on the phenomenon of cases of fraud and the research gap described above, the stewardship theory which explains the relationship between stewards (village apparatus) and the principal (community), and the theory of planned behavior which explains the factors that influence behavior individuals, this study aims to determine the effect of village apparatus competence, internal control systems, and religiosity on the prevention of fraud in the management of village funds in Sidoarjo Regency with morality as a moderating variable.

THEORETICAL FRAMEWORK AND HYPOTHESES Fraud Triangle
The fraud triangle concept proposed by Donald Cressey (1953), consists of 3 factors that encourage a person to commit fraud: pressure, opportunity, and rationalization.

Stewardship Theory
Stewardship theory is a theory that describes a situation in which managers are not motivated by individual goals but rather aimed at their main outcome goals for the benefit of the organization (Lestari, 2013). According to Donaldson & Davis (1991), based on this theory, executives, as stewards, are motivated to act in accordance with the wishes of the principal. In addition, the steward will not leave the organization because he is trying to achieve the goals of the organization. This theory is designed for researchers to examine situations where executives in a company or organization as stewards can be motivated to act in the best way in principle.
Stewardship theory expects individuals in a company or organization to be more concerned with the goals of the company or organization than with individual goals. This theory can be applied to accounting research in public sector, such as government organizations, because since its early development, public sector organizations have been prepared to meet the information needs for the relationship between stewards and principals (Rosalin, 2011). Public sector organizations do not seek profit but prioritize good service to their communities as principals, as it is the case in village government. Therefore, it is appropriate for an agency to provide the best service to the community because the resources obtained to carry out operational activities come from the community.

Theory of Planned Behavior
This research is based on Theory of Planned Behavior (TPB). This theory was first proposed by Ajzen (1991) and a development of Theory of Reasoned Action (TRA) which had been previously proposed by Fishbein and Ajzen (1975). Theory of Planned Behavior states that humans behave in a conscious manner and consider all available information. A person can act on intentions only if the he/ she has control over his/ her behavior (Ajzen, 1991). There are three processes when a person engages in intentions and behaviors: attitude toward the behavior, subjective norm, and perceived behavior control.

Fraud Prevention
According to Fitriawansyah (2014), Fraud prevention can be analogous to disease: prevention is better than cure. If fraud has occurred, it means that there has been a loss and has been enjoyed by certain parties. This is different when people have succeeded in preventing fraud. Of course, the costs or losses caused by fraud have not all shifted to the perpetrators of this fraud. The cost incurred for recovery will be far greater than that incurred for prevention.

Morality
Morality is the mental and emotional attitude that an individual has as a member of a social group in performing tasks and loyalty to the group (Falah, 2006). Morality occurs when an individual takes something good because he is aware of his obligations and responsibilities, not because he seeks profit. Budiningsih (2004: 24).

Village Apparatus Competence
Competence is each individual's work ability which includes aspects of knowledge, skills, and work attitudes in accordance with established standards. In this case, competent resources can be obtained in various ways, including through formal education. In managing village finances, a competent village apparatus is needed because the process of implementing village financial management can hinder fraud. In other words, the weak human resources owned by the village government can cause the fraud. Stewardship theory states that each individual in a company or organization must be more concerned with the goals of the company or organization than with individual goals. This means that the competence of a village apparatus must be managed for achieving the organizational goals, not for personal gain. The competence will later be misused, that is, for committing fraud. This is in line with the results of research conducted by Atmadja & Saputra, 2017; Wonar et al (2018); Laksmi and Sujana (2019) and Arthana (2019) state that apparatus competence affects fraud prevention. Based on this description, the first hypothesis can be formulated as follows: H1: Village apparatus competence has an effect on fraud prevention

Internal Control System
Republic of Indonesia Government Regulation number 60 of 2008 is concerned with the Government Internal Control System. For example, in article 1 paragraph 1, it explains that the internal control system is an integral process in activities carried out continuously by the leaders of all employees to provide adequate confidence in the achievement of organizational goals through effective and efficient activities, reliable financial reporting, security of state assets, and compliance with laws and regulations.This is related to the Subjective Norm which states that a person's behavior is influenced by the behavior of the individuals around him and when policies in the organization must be carried out by all individuals, he feels that there is social pressure where he can perform the same behavior as his co-workers. The better the internal control system in an organization, the better the behavior of human resources in the organization in preventing fraud. Therefore, if the internal control system in the village government is implemented optimally, all village officials can prevent fraud in their environment. Fraud can occur if the internal control system in an organization has not been implemented effectively and there are still opportunities for individuals to commit fraud. This is in line with the results of research conducted by Atmadja & Saputra (2017) and Laksmi & Sujana (2019) that the internal control system has an effect on fraud prevention in village financial management. Based on this explanation, the second hypothesis can be formulated as follows:

H2: Internal control system has an effect on fraud prevention
Religiosity Religiosity is how a person understands, internalizes, and integrates religious norms into himself and becomes his personality, because it includes a condition that encourages him to think, behave, and act according to his beliefs. The more persistent a person is in his religious teachings, the less the intention to commit deviant actions. A person will not do actions that are forbidden by his God if his life is based on strong religious knowledge (Urumsah et al, 2016).
A person who has a high level of religiosity will not commit unethical actions. Fraud is an unethical action that can cause harm to the organization and other parties. So it can be concluded that religiosity can prevent fraud. This is in line with the results of research conducted by Ananda et al (2016); Purnamasari & Amaliah (2015) and Safitri (2017) that religiosity has a positive effect on fraud prevention. Based on this explanation, the third hypothesis can be formulated as follows: H3: Religiosity has an effect on fraud prevention The sample was determined using proportionate stratified random sampling technique, a technique of determining the sample by separating the population into subpopulations or strata. The data were taken from the primary data and secondary data. Primary data were obtained by distributing questionnaires, while secondary data were obtained from documentation, literature study, articles and relevant previous research.

RESEARCH METHOD
The independent variables in this study are Village Official Competence (X1), Internal Control System (X2), and Religiosity (X3). The dependent variable in this study is Fraud Prevention (Y). The moderating variable is Morality (Z). Competence can be defined as the human's ability, institutions', and society's to carry out, identify, and achieve their goals and to change when necessary for the goals of sustainability, development, and progress (Mouallem & Analoui, 2014). The variable of competency uses three measurement indicators: education, training and experience.
Morality is a mental and emotional attitude possessed by individuals as members of social groups in carrying out tasks and loyalty to groups (Falah, 2006). The variable of morality uses four measurement indicators: cultural values, code of ethics or social customs, pro-people, transparent, accountable, and not corrupt.
Republic of Indonesia Government Regulation number 60 of 2008 concerning Government Internal Control System article 1 paragraph 1 explains that the internal control system is an integral process in activities carried out continuously by the leaders of all employees to provide adequate confidence in the achievement of organizational goals through effective and efficient activities, reliable financial reporting, security of state assets, and compliance with laws and regulations. According to Wonar, et al. (2018), the variable of control system uses two measurement indicators: belief system and control.
According to Glock and Stark (1965), religiosity is an integrated system of beliefs, lifestyle, ritual activities and institutions that give meaning to human life and direct humans to values. The variable of religiosity uses four measurement indicators: ritualistic, ideological, intellectual, experiential, and consequential.
Fraud, according to the Association of Certified Fraud Examiners (2012), is an action that is deliberately carried out by one or more people to use the resources of an organization inappropriately (acts against the law) and misrepresents facts (hiding facts) to obtain personal gain. The variable of fraud uses three measurement indicators: corruption, misuse of assets and fraudulent financial statements.
Data analysis tool used in this study is Structural Equation Model (SEM) with the Partial Least Square (PLS) method using SmartPLS 3.0 software. SEM-PLS is selected as the data analysis for the following reasons: a. This research is exploratory or an extension of existing theories b. Able to test complex research models (exogenous variables and endogenous variables with moderating variable) simultaneously so as to be able to estimate models simultaneously and precisely in theory testing. SEM is able to analyze the overall model so that it helps researchers conclude whether the model, according to theory, is supported by the data. c. Able to analyze variables that cannot be measured directly (unobserved variables) and take measurement error into account because conceptually the variables have been perfectly measured using indicators or question items.
Methodologically, there are several reasons for using SEM (Sholihin & Ratmono, 2013: 2-30): a. This study uses SEM with a variable based or component based approach with PLS because the purpose of this study is to explain the construct (latent variable), or also known as the predictive model. b. SEM with PLS estimates the loadings of manifest/ indicator variables for exogenous latent variables based on predictions of endogenous latent variables, not based on the variance divided between manifest/ indicator variables on the same latent variables as happened in covariancebased SEM. c. SEM-PLS can work efficiently with a small sample size and a complex model because it can achieve a high enough statistical power with a small sample size (Sholihin & Ratmono, 2013: 11). d. The assumption of data distribution in PLS SEM is looser, which means that it does not require the variables to meet parametric analysis criteria, such as multivariate normality and large sample size. e. Able to analyze reflective and formative measurement models and latent variables with one indicator without causing identification problems (Sholihin & Ratmono, 2013: 7) f. Able to produce parameter estimates for models with formative latent variables and moderating effects (Sholihin & Ratmono, 2013: 30)

Hypothesis Testing
Based on Table 1, it can be seen that the variables of village apparatus competence and religiosity have an effect on fraud prevention, while the variable of internal control system has no effect on fraud prevention.

The Effect of Village Apparatus Competence on Fraud Prevention
The results of this study are in accordance with the stewardship theory which explains that individuals in the organization must prioritize organizational goals rather than individual goals. It also means that village officials as community servants must utilize their competencies according to their duties and responsibilities properly. By doing so, the goals of the organization can be maximally achieved and the abuse of competence to commit fraud can be prevented. This explanation is supported by the results of research in the field which show that most of the village officials in Sidoarjo Regency have the last education in Bachelor's Degree. It means that the competence of the village human resources in Sidoarjo Regency is quite good. Finally, in the management of village funds, acts of fraud can be minimized and the purpose of allocating village funds intended for community needs can be implemented on target.
The results of this study are in line with the results of previous research conducted by Atmadja & Saputra (2017), Wonar et al (2018), Laksmi and Sujana (2019) and Arthana (2019)  (2020) which state that the competence of village officials has a significant effect on fraud prevention.

The Effect of Internal Control Systems on Fraud Prevention
The results of this study indicate that the internal control system has no effect on fraud prevention. According to Wonar et al (2018), in essence, the village government is an autonomous region that has not yet understood the importance of implementing and maintaining an effective and accountable internal control to all parties. Fraud prevention can be started from internal control which is a process designed and implemented by local governments which later it will be adopted by the village government to provide adequate certainty in achieving effective and efficient government activities, and in compliance with applicable laws or regulations. The results of this study are in line with the results of research conducted by Wonar et al (2018) and Rahayu (2019) that the Internal Control System has no effect on Fraud Prevention.

The Effect of Religiosity on Fraud Prevention
The results of this study indicate that high religious understanding in individuals will make village officials try to remain in the organization. This is because high religious understanding will form a commitment to a large organization. Village officials with high religious understanding will try to maintain the good name of the organization.
Village officials prefer to act to prevent fraud that may occur in the organization rather than avoid this fraud by changing jobs to another scope of the organization. The more obedient to the teachings of his religion, the less the intention to commit deviant actions. A person will not do actions that are prohibited by God if his life is based on strong religious knowledge (Urumsah et al, 2016). According to Weaver & Agle (2002), having high religiosity will increase self-resistance and lead to good self-control so that the intention to cheat is also less. This is related to the Theory of Planned Behavior which states that a person's behavior can be influenced by the main factor within the individual, namely behavioral intention.

CONCLUSION, IMPLICATION, SUG-GESTION AND LIMITATION
The study proves that village apparatus competence and religiosity have an effect on fraud prevention. This indicates that a village official who has good competence, carries out his duties properly according to his responsibilities and has a high understanding of religiosity will also have a good commitment to the organization. By doing so, the goals of the village government can be maximally achieved. Yet, the internal control system has no effect on fraud prevention. In essence, the village government is an autonomous region that does not yet understand the importance of implementing and maintaining effective and accountable internal control to all parties. Fraud prevention can be started from internal control, which is a process designed and implemented by local governments, which will later be adopted by the village government to provide adequate certainty in achieving effective and efficient government activities, and in compliance with laws or regulations. Morality is not able to moderate the influence of village apparatus competence, internal control system and religiosity on fraud prevention. The non-effect of the morality variable indicates that morality is not able to contribute to the influence of village apparatus competence, internal control system and religiosity on fraud prevention. So it is necessary to cultivate individual morality of village government officials to prevent fraud.
The limitation of this research is that the process of collecting data and information provided by respondents through questionnaires sometimes does not show the real opinion of respondents. For example, the honesty factor in filling out the questionnaire. The questionnaires in several villages were not taken directly by the researchers due to the Covid-19 pandemic.
It is suggested that further researchers not only rely on the survey method (questionnaire distribution) but also conduct interviews to avoid misperceptions and to obtain more in-depth information from respondents. By doing so, the data obtained can better describe the original situation. In addition, further researchers are expected to add the Village Consultative Body (BPD) as respondents in research related to fraud prevention in the management of village funds. The questionnaire items used by researcher are still limited and inadequate. Therefore, for further research, the researchers can add and improve the items in their studies.