Aceh Province is one of the provinces that gets a fairly large village fund budget every year. From 2015 to 2019, Aceh province received up to 19.85 trillion rupiah. In 2015, the Village Fund Budget in Aceh Province was Rp. 1,707,817,994,998, while in 2016 it increased significantly by Rp. 3,829,751,986,000. After that, village funds in Aceh kept increasing to Rp4,955,500,482,000 in 2019. This shows a substantial allocation of village funds, and each village received up to ± 700-900 million (Source: Aceh Community and Village Empowerment Service, 2019)

However, such a large village fund budget has not impacted welfare. This shows by the high poverty rate in Aceh province. The poverty rate in Aceh still tends to be high and above the national average, though it shows some declined. This can be seen from the BPS data in 2019 show in Figure 1: 

In 2016 the poverty rate in Aceh was 16.43% and decreased to 15.92% in 2017. In 2018 the poverty rate fell to 15.68% and 15.01% in 2019. The percentage of poor people is also higher, more in rural areas than urban areas, 19.11% in urban areas compared to 10.82% in rural areas in 2016. In 2019, the poor in the rural was 18.03% and 9.68% in urban areas. 

The phenomenon that developed mainly in Pidie Regency related to the distribution and management of village funds still has not impacted community empowerment, especially regarding increasing community knowledge through improving skills and community abilities through enhancing the family economy.

The distribution of funds to the community is usually done through the Village-Owned Enterprise (BUMG) in rotating loan assistance to people who have businesses in the  village. However, the facts stated that community.

Figure 1: Number and Percentage of Poor Population in Aceh Province 2016-2019

Previous research conducted by several researchers stated that the distribution of Village Funds was not matched with the applicable laws and regulations. The study results indicate that there is a negative influence between the level of poverty and the distribution of village funds. Furthermore, research related to the management of village funds shows that aspects of financial management are generally in sync with those stated in Permendagri 113 of 2014 and have complied with financial management principles. Reporting and accountability remain issues for some villages, and not all villages studied have aspects of reporting and accountability of human resources. but overall, it can be concluded that the management of village funds has gone well and is following Permendagri number 113 of 2014 [1]. 

Research by Fauzi et al. [2] also shows that the dynamics of village fund programs in Merbau Bay fund allocation and Rawang Air Putih village in terms of planning, management, administration, and reporting are following the standards and mechanisms that have been set. However, there are still some shortcomings in the implementation of the program. Management of Village Fund Allocation as an Instrument for institutional and social community participation plays an important role in efforts for villages to become independent.

Previous studies have focused more on the level of village fund management and its impact on poverty, while researchers have not widely studied the aspect of increasing community empowerment.

Thus, based on the above background, the authors are interested in conducting a study titled "Effectiveness of Village Fund Distribution and Management in Increasing Village Community Empowerment and Its Impact on Increasing Village Community Welfare in Pidie Regency."

Welfare

Welfare is a certain amount of satisfaction a person obtains from consumption income. However, the level of welfare itself is relative because it depends on the level of satisfaction obtained from consumption income. Thus, welfare is a social, material and spiritual life and livelihood, which is full of security, decency, and internal and external peace so that every community can work hard to meet their physical, spiritual and social needs. for himself, his family, and society.

Community Empowerment

Permendesa Number 5 of 2015 stated about priorities for the use of village funds that "Empowerment of rural communities to develop community independence and welfare by formulating policies, plans, activities, and assistance based on the nature of the problem, as well as by increasing knowledge, attitudes, skills, behavior, abilities, awareness, and utilization of resources and priority needs of the village community."

Wrihatnolo et al. [3] recommends (four) indicators to measure empowerment, namely:

• Access, empowered targets can ultimately access the resources needed for self-development

• Participation, that is, empowered targets can participate in using the resources available to them

• Control, namely the empowered target, ultimately can control the process of utilizing the resources

• Equality, i.e., when a conflict occurs, to some extent, the empowered target is in the same position as the others in solving the problem

In addition, Sofianto [4] also mentions that community empowerment indicators include 1. Training plans, 2. Assistance plans, 3. Human resource capacity building 4. Ability to buy small commodities, 5. Ability to purchase large commodities, and 6. Economic resilience and contribution for family.

Effectiveness of Village Fund Distribution

Kurniawan [5] says that effectiveness is an organization's ability to carry out its duties and functions when there is no pressure or tension in the organization's implementation. In addition, Dies [6] notes several important things to measure the effectiveness of using village funds. 1) Achievement of goals. This means that village funds must follow the priority needs to achieve the plans. 2) Punctuality. This means that channeling and using village funds must follow the time of implementation of the planned activities until the activities are completed. In accordance with the benefits, the village community can feel the benefits of village funds. The results of the distribution and management of village funds are in accordance with community expectations.

Indicators of the effectiveness of distribution, according to Vani, consist of (1) the budget set by the priorities, (2) low SILPA, (3) procurement of goods and services, (4) procurement goods and services are carried out self-managed by the community, (5) a review of the distribution of village funds (6) documentation of evidence of expenditure.

Effectiveness of Village Fund Management

Permendagri Number 20 of 2018, stated that "Village financial management is all activities that include planning, implementation, management, reporting, and village financial accountability. Village financial management must be based on several principles, namely:

• Transparent is enabling the community to understand and obtain the broadest possible information about village finances.

• Accountability is a manifestation of the obligation to be responsible for the management and control of resources and the implementation of entrusted policies to achieve the goals that have been set.

• Participatory, namely the implementation of village governance that includes village institutions and village communities.

Orderly and budgetary discipline, namely the management of village finances must refer to the law or the underlying guidelines.”

The distribution of funds to the community is usually done through the Village-Owned Enterprise (BUMG) in rotating loan assistance to people who have businesses in the village. However, the facts stated that community empowerment through various programs that have been made by the village apparatus such as training, producing some products, and assistance has not been able to provide a significant impact in empowering the community in the village.

This is because several aspects, such as laws and regulations, are not synchronized, making it difficult for villages to apply village regulations. Besides that, the Regent and Mayor are late to set the rule regarding the priority use of village funds. Furthermore, there are still delays in the distribution of village funds from districts or cities to villages and reports on the realization of the distribution and use of late village funds. Moreover, it is expected to impact various village fund distribution activities for village infrastructure development and inhibit empowerment or community capacity development through BUMG.

Previous research conducted by several researchers stated that the distribution of Village Funds was not matched with the applicable laws and regulations. The study results indicate that there is a negative influence between the level of poverty and the distribution of village funds. Furthermore, research related to the management of village funds shows that aspects of financial management are generally in sync with those stated in Permendagri 113 of 2014 and have complied with financial management principles. Reporting and accountability remain issues for some villages, and not all villages studied have aspects of reporting and accountability of human resources. but overall, it can be concluded that the management of village funds has gone well and is following Permendagri number 113 of 2014 [1]. 

Research by Fauzi et al. [2] also shows that the dynamics of village fund programs in Merbau Bay fund allocation and Rawang Air Putih village in terms of planning, management, administration, and reporting are following the standards and mechanisms that have been set. However, there are still some shortcomings in the implementation of the program. Management of Village Fund Allocation as an Instrument for institutional and social community participation plays an important role in efforts for villages to become independent.

Previous studies have focused more on the level of village fund management and its impact on poverty, while researchers have not widely studied the aspect of increasing community empowerment.

Thus, based on the above background, the authors are interested in conducting a study titled "Effectiveness of Village Fund Distribution and Management in Increasing Village Community Empowerment and Its Impact on Increasing Village Community Welfare in Pidie Regency."

Welfare

Welfare is a certain amount of satisfaction a person obtains from consumption income. However, the level of welfare itself is relative because it depends on the level of satisfaction obtained from consumption income. Thus, welfare is a social, material and spiritual life and livelihood, which is full of security, decency, and internal and external peace so that every community can work hard to meet their physical, spiritual and social needs. for himself, his family, and society.

Community Empowerment

Permendesa Number 5 of 2015 stated about priorities for the use of village funds that "Empowerment of rural communities to develop community independence and welfare by formulating policies, plans, activities, and assistance based on the nature of the problem, as well as by increasing knowledge, attitudes, skills, behavior, abilities, awareness, and utilization of resources and priority needs of the village community."

Wrihatnolo et al. [3] recommends (four) indicators to measure empowerment, namely:

• Access, empowered targets can ultimately access the resources needed for self-development

• Participation, that is, empowered targets can participate in using the resources available to them

• Control, namely the empowered target, ultimately can control the process of utilizing the resources

• Equality, i.e., when a conflict occurs, to some extent, the empowered target is in the same position as the others in solving the problem

In addition, Sofianto [4] also mentions that community empowerment indicators include 1. Training plans, 2. Assistance plans, 3. Human resource capacity building 4. Ability to buy small commodities, 5. Ability to purchase large commodities, and 6. Economic resilience and contribution for family.

Effectiveness of Village Fund Distribution

Kurniawan [5] says that effectiveness is an organization's ability to carry out its duties and functions when there is no pressure or tension in the organization's implementation. In addition, Dies [6] notes several important things to measure the effectiveness of using village funds. 1) Achievement of goals. This means that village funds must follow the priority needs to achieve the plans. 2) Punctuality. This means that channeling and using village funds must follow the time of implementation of the planned activities until the activities are completed. In accordance with the benefits, the village community can feel the benefits of village funds. The results of the distribution and management of village funds are in accordance with community expectations.

Indicators of the effectiveness of distribution, according to (Vani: 2018), consist of (1) the budget set by the priorities, (2) low SILPA, (3) procurement of goods and services, (4) procurement goods and services are carried out self-managed by the community, (5) a review of the distribution of village funds (6) documentation of evidence of expenditure.

Effectiveness of Village Fund Management

Permendagri Number 20 of 2018, stated that "Village financial management is all activities that include planning, implementation, management, reporting, and village financial accountability. Village financial management must be based on several principles, namely:

• Transparent is enabling the community to understand and obtain the broadest possible information about village finances.

• Accountability  is  a  manifestation of the obligation to be responsible for the management and control of resources and the implementation of entrusted policies to achieve the goals that have been set.

• Participatory, namely the implementation of village governance that includes village institutions and village communities.

• Orderly and budgetary discipline, namely the management of village finances must refer to the law or the underlying guidelines.”

Research Instruments

Research data that has been obtained through the questionnaire will be combined into a quantitative value, and it will be measured using a scale with intervals. The Likert scale is a numerical scale used to measure people's attitudes and opinions about social phenomena [7].

All measurement items were taken from previous studies to ensure validity by Renandi [8], Sofianto [4], Todaro et al. [9], and Permendagri. A questionnaire with a 5-point Likert scale was used to collect data. In addition, this study also used in-depth interviews with several informants, and researchers conducted a documentation study related to the data that support the research. 

Sample Design and Data Collection

In this study, 258 samples were taken, with the respondents being the head of the village, community, and other positions in the village. The sampling technique used in this study is Stratified Random Sampling, which selects specific clusters or areas for each sampling unit randomly." 

In this study, the population in question was all villages in Pidie Regency, which amounted to 730 villages. Sampling was carried out using a proportional random sampling technique based on the village category in Pidie Regency.

Data Analysis

The data analysis technique used in this paper is Structural Equation Modeling. SEM is one of the factor analysis techniques related to path analysis. Data analysis tools are used to test respondents' perceptions. These tools are based on the average value of each variable, assuming the mean value is 3.41.

The data analysis equipment used in this research is structural equation modeling (SEM) with the help of the Amos program. Statistical techniques allow the researcher to test a series of relationships simultaneously [10].

Characteristics of Respondents

Characteristics of respondents in this study can be seen in Table 1.

The results on the characteristics of the respondents can be explained that the respondents in this study were dominated by male respondents compared to female respondents, then based on age level, respondents aged 31-40 years were the dominant age level with married status. Meanwhile, the level of education is dominated by respondents with undergraduate education, with the occupation being entrepreneurs is dominated.

Table 1: Characteristic of Respondents 

Table 2: Validity Test

Validity Test

Testing the validity of the data in this study was carried out statistically by using the Pearson product-moment coefficient of correlation test with the help of the SPSS program. Based on the analysis results, all statements are declared valid because they have a significance level below 5%, so these statements are significant and have construct validity. This explains internal consistency, which means that the statements measure the same aspect. Therefore, data obtained is valid and can be used for further analysis, as described in Table 2.

Table 3: Goodness of Fit Ratio

Table 2 explained the validity of the test. It shows that all the variables used in this study are valid, because they have a correlation coefficient above the critical value of product moment correlation, which is 0.138 so that all questions contained in this research questionnaire are declared valid for further in-depth research.

Reliability Test

To assess the reliability of the questionnaire used, this study used Cronbach Alpha test which is often used for questionnaire testing. This analysis is used to interpret the relationship between the scale created and the existing variable scaled. 

Based on the reliability analysis, it can be seen that the alpha for each respondent's perception variable can be seen from several variables, namely the distribution variable (X1) obtained an alpha value of 76.6 percent, the management variable (X2) obtained an alpha value of 63.8 percent, variable empowerment (Z) obtained an alpha value of 68.1 percent. The welfare variable (Y) got an alpha value of 72.9 percent. Thus, the reliability measurement of the research variables shows that the reliability measurement meets the credibility of Cronbach Alpha where the alpha value is greater than 0.60 percent Alpha.

Based on the table above, it can be explained that all goodness of fit test results (model fit) have met the specified cut of value, so all variables and indicators in this research model have met the requirements for further testing.

Results

Based on Figure 2, it can be explained that the influence of each variable, namely the distribution and management variables on the welfare of the community, is mediated by community empowerment.

The estimation parameter for testing the effect of village fund distribution on community empowerment shows a CR value of 4.368 and a probability of 0.0001. The two values ​​obtained meet the requirements for H1 acceptance, namely the CR value of 4.368 which is greater than 1.96 and the probability is less than 0.05. Thus, it can be concluded that the distribution of village funds in Pidie Regency has an effect on  community  empowerment.

Figure 2: Structural Equation Model (SEM) Test Results

Table 3: Standardized Regression Weights Structural Equational Model

The parameter estimation for testing the effect of village fund management on community empowerment shows a CR value of 6.053 and a probability of 0.0001. The two values ​​obtained meet the requirements for H2 acceptance, namely the CR value of 6.053 which is greater than 1.96 and the probability is smaller than 0.05. Thus, it can be concluded that the management of village funds in Pidie Regency has an effect on community empowerment in Pidie Regency. The magnitude of the influence of village fund management on community empowerment is 0.280. This indicates that the better the management of village funds by the villageapparatus in Pidie Regency is towards community empowerment. The results of this study are consistent and in line with the research conducted by Nur et al. that the distribution of village funds consists of 30% for the use of village administration operations and 70% for community development, development and empowerment. Village funds distributed by the government to villages have been managed by almost all village communities. The results of the study are also supported by the results of research conducted by Siagian et al. [12], that village financial management in Asahan Regency has not been carried out efficiently and effectively. This is indicated by the weak implementation of good governance principles which can be seen from the lack of transparency and quality of information in the Musrenbang, budget transparency, weak levels of participation and supervision by the community and lack of village financial accountability.

The estimated parameter for testing the effect of distribution on effectiveness of village fund shows a CR value of 3.068 and a probability of 0.0001. The two values ​​obtained meet the requirements for H4 acceptance, namely the CR value of 3.068 which is greater than 1.96 and the probability is less than 0.05. Thus, it can be concluded that the distribution of village funds affects the welfare of the people in Pidie Regency. The magnitude of the influence of the distribution of village funds on the welfare of the community is 0.250. This indicates that the better the distribution of village funds in Pidie Regency will have a positive and significant impact on improving community welfare in Pidie Regency. The results of the study are also consistent with the findings of research conducted by Bustamam et al. that the performance of the village government in managing the allocation of funds in Lut Tawar District at the planning, implementation and administrative stages has been carried out well, all programs and activities are carried out according to plan. However, at the reporting stage, there was a delay in sending the accountability report from the village government.

The parameter estimation for testing the influence of empowerment on community welfare shows a CR value of 6.125 and with a probability of 0.0001. The two values ​​obtained meet the requirements for H6 acceptance, namely the CR value of 6.125 which is greater than 1.96 and the probability is less than 0.05. Thus, it can be concluded that community empowerment in Pidie Regency has an effect on community welfare in Pidie Regency. The magnitude of the influence of community empowerment on community welfare is 0.305. This indicates that the better the empowerment carried out by the villageapparatus will have an impact on improving the welfare of the people of Pidie Regency. The results of this study are consistent with research conducted by Sofianto [4] which states that the implementation of village funds contributes in the form of increasing the accessibility of rural communities and community participation in development. However, the results of this study are not supported by research conducted by Hehamahua [13] where the use of Village Fund Allocation has not fully provided space for the community to develop their economy. There are still many villages that have not been able to prepare for the management of village fund allocations, both in terms of annual plan products, utilization, and accountability. This is because the direct movement of the Village Allocation Fund is more focused on physical development, so it has not been able to change the economic face of existing rural communities. Meanwhile, the results of research conducted by Meutia et al. [1], where the results of the study show that aspects of financial management are generally in accordance with those stated in Permendagri 113 of 2014 and have met the basic principles of financial management. Reporting and accountability remain a problem for some villages. Not all villages studied have aspects of reporting and accountability of human resources. Therefore, it can be concluded that the management of village funds has been going well and is in accordance with Permendagri Number 113 of 2014.

Managerial Implications

The result of the research implies that the distribution of village funds has a positive impact in increasing the empowerment of the village community. The empowerment carried out by the village apparatus from the allocation of village funds also affects the welfare of the village community. Empowerment of village communities includes training programs, i.e., making handicrafts (bag products), making chips with various other processed products. Improving knowledge is also very important to create products that can improve the economy.

Moreover, the village apparatus's distribution of village funds on time, and applicable procedures will increase community empowerment. Meanwhile, the management of village funds will also impact improving the welfare of the village community, where correct fund management will play an important role in improving the welfare of the community because, with proper management, village funds will reach the stated goals. Management of village funds is a form of an overall activity that includes planning, implementation, administration, reporting, and accountability of village finances, so with proper village fund planning, it is then supported by the performance of activities in accordance with the “musrenbangdes,” administration of reports on the use of village funds and also accountability for the benefit of village funds. Financial reports that all parties can accept will impact improving the welfare of the village community in Pidie Regency.

The results of interviews that the author conducted with the Head of Village and DPMG proved that the distribution of village funds and the management of village funds currently use the Village Financial System (Siskesdes), where this system is an integration of the planning system, budgeting system and performance reporting system, which is in line with the implementation of the system. financial accountability. In this case, each village must record and report every use of state finances and their compliance with applicable regulations. With the Siskesdes, the management of funds is expected to be distributed according to the designation based on the Village Development Planning Deliberation which has been agreed upon by all elements of the Village community.

The distribution of village funds, management of village funds, community empowerment, the welfare of the village community in Pidie Regency has been going well. This indicates that there is an influence of distribution and management of village funds on the empowerment of village communities in Pidie Regency. 

In relation to the management of village funds in villages in Pidie Regency, it should be improved, especially the village government should be able to make an accountability report for the use of village funds in a transparent and accountable manner. Moreover, it is necessary to increase economic security and its contribution to the family. It is expected that family health will be qualitatively better because health will be the main key for families in increasing family income.

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