Volume 31, Number 1, 2026

Beyond Controls: How Workplace Spirituality and Internal Control Systems Jointly Prevent Fraud in Village Fund Management: A Mixed-Methods Study from Eastern Indonesia

Rolland E. Fanggidae ^{a, *} , Aldarine Molidya ^b , Abdhy Aulia Adnans ^c , Alexandre De Sousa Guterres ^d
a,b Faculty of Economics and Business, Universitas Nusa Cendana, Kupang, Indonesia
^c Vocational School, Universitas Padjadjaran, Sumedang 45363, Indonesia
^d Faculdade Economia, Universidade da Paz (UNPAZ), Dili, Timor-Leste 
*Corresponding author: rolland_fanggidae@staf.undana.ac.id

ABSTRACT

Purpose: The research will seek to determine the place of spirituality in the workplace and the internal control mechanisms and equipment competence in fraud prevention in the management of village funds in the East Nusa Tenggara (NTT) Province.
Design/Methodology/Approach: A sequential exploratory mixed-design was employed. The qualitative step was semi-structured interviews, non-participant observation, and document review of four purposely sampled villages based on maximum variability of history of fraud and cultural-spiritual profile (n = 76 informants) with thematic coding with member-checking. Survey item constructs and contextualization were then refined (based on the qualitative analysis used to inform the quantitative phase), which entailed a structured survey of 74 village officials as analyzed with multiple linear regression (SPSS 26).
Findings: According to the qualitative findings, village officials internalize spiritual values ​​as being godly accountable (amanah), trust with the group (gotong royong), and native cultural ethics as an inner moral compass that serves as a first line of defense against fraud. The three predictors were all significantly and positively related to the prevention of fraud on a quantitative level; the combined model accounted 80.0% of the variance (R² = 0.800, F = 93.066, p < 0.001). Internal control systems were the strongest predictor (β = 0.451), followed by workplace spirituality (β = 0.334) and apparatus competence (β = 0.300). Integration of the two strands indicate that the constructs function as complementary rather than substitutable resources.
Originality/Value: The empirical evidence (mixed methods) provided by the study is the first one on the topic of fraud prevention in decentralized village governance in Eastern Indonesia. The results can be seen in the light of an informed view of fraud-diamond, that the internal control reduces the opportunity, workplace spirituality enables the internalized moral judgment rationalization limiting and pressure, and that the use of both can be effectively enabled by apparatus competence. This study is not a test per se of the single components of the fraud diamond; rather, it is a culturally informed, complementary system in which indigenous values ​​are enacted as useful instruments of governance.
Practical Implications: Building of the structural controls should be complemented with spirituality-based integrity programs driven by the value of the local cultures, and technical capacity-building of the village officials.

JEL Classifications: D73, M42, M12

Keywords: apparatus competence, fraud diamond, fraud prevention, internal control systems, village fund management, workplace spirituality

Cite this article: 

Fanggidae, RE, Molidya, A., Adnans, AA, and Guterres, ADS, 2026,  Beyond Controls: How Workplace Spirituality and Internal Control Systems Jointly Prevent Fraud in Village Fund Management: A Mixed-Methods Study from Eastern Indonesia,  International Journal of Business , 31(1), 004. https://doi.org/10.55802/IJB.031(1).004