i ABSTRAC
The composing of the Local Government Budget is meant that the operational expenses will not exceed the budget. In the basic concept of economy, the basic problem that may appear is the shortage of the financial resources to fulfill the unlimited needs to spend. When the absorption of the budget fails to reach the budget, the inefficiency and the ineffectivity of the budget allocation may have happened. This may cause the losing of the use of the expenditure. The aim of this study is to test whether the understanding of system, the procedure of the finance management, the external pressure and the commitment of the organization have significantly affected the performance of the budget of the Salatiga Local Government. This study involves 8 Units Local apparatus which closely relate to the budget which can cause the high rest of budget to The Local Government also the data analysis techniques. This study is using regression analysis. The result of the study shows that the understanding of system and the procedure financial management and the commitment of the organization give positive effect to the financial performance 0,005 smaller than 0,05. The external pressure does not statistically affect the financial performance with 0,375 bigger than 0,05. After being clarified using content analysis, however, the external pressure has affected the financial performance of the Salatiga Local government.
Keywords: Understanding financial management systems and procedures, external
