Institutional Adaptation in the Digital Transformation of Local Government Financial Governance: A Case Study of Balangan Regency

Digital transformation in local government financial governance involves more than changes in technology and administrative mechanisms; it also requires institutional adjustments to ensure that such changes can be implemented and sustained over time. This study aims to analyze institutional adaptation in the digital transformation of local government financial governance in Balangan Regency, Indonesia. The study used a descriptive qualitative approach and collected data through interviews, observations, and document analysis. The study analyzed data interactively through data condensation, data display, and conclusion drawing and verification. The analysis draws on institutional change and Problem-Driven Iterative Adaptation (PDIA), developed by Andrews, Pritchett, and Woolcock (2017), to examine institutional change and the development of adaptive capacity. The findings show that implementing SIPD/SIPD-RI, SIPANDA, the Cash Management System (CMS), SP2D Online, and non-cash transactions has prompted adjustments to regulations and work procedures, staff capacity, interorganizational coordination, infrastructure, and oversight mechanisms. Adaptation has occurred through a gradual, iterative process in which implementation challenges serve as learning opportunities that inform subsequent institutional adjustments. The findings indicate that institutional adaptation links digital transformation with the sustainability of changes in local government financial governance. The study implies that digital transformation policies should strengthen institutional learning, adaptive capacity, and organizational support alongside technological adoption.