Factors That Influence Financial Performance with Capital Expenditure as a Moderating Variable in the Regency / City Government of Sumatera Utara Province

This study aims to analyze and evaluate (1) comprehensive regional development to produce regional growth that is in line with the regional budget; (2) making good and appropriate financial management so that the improvement of the economic development process has an impact after the implementation of the regional autonomy policy; (3) Each region can be responsible for regional authority in regional development so that good financial management is expected to be a reality for local governments to support their growth and development; (4) Increasing the potential of financial performance and this ability is indicated by compliance with specific rules and regulations as stipulated by SAP when managing financial. This research was conducted in the district /city government in the area of ​​North Sumatra Province. The population used was 33 districts/cities (25 districts and eight cities) with the year of observation for five years starting from 2018 to 2022 the number of observations was obtained as many as 165, the data used was secondary data, the data collection method which was the data documentation method was obtained From the Directorate General of Finance Balance of the Ministry of Finance of the Republic of Indonesia, the website of the Central Statistics Agency, the website of each regional government that is the research sample, and other related sources. The results of this study indicate that (1) Local own-source revenue has a significant positive effect on financial performance; (2) operating expenditure has a significant positive effect on financial performance; (3) Revenue sharing fund has a significant positive effect on financial performance; (4) General Allocation Fund has no significant effect on financial performance; (5) Special Allocation Fund has a significant positive effect on financial performance; (6) the working period of regional heads has no significant effect on financial performance; (7) capital expenditure can moderate the effect of local own-source revenue on financial performance; (8) Capital expenditure cannot moderate the effect of operating expenditure on financial performance; (9) Capital expenditure can moderate the effect of revenue sharing fund on financial performance; (10) Capital expenditure cannot moderate the effect of general allocation funds on financial performance; (11) Capital expenditure can moderate the effect of special allocation funds on financial performance; (12) Capital expenditure cannot moderate the effect of the working period of regional heads on financial performance. Keywords: good governance, financial management system, regional autonomy policy, financial performance.