Introduction

In recent years, the management of village funds in Indonesia has garnered national attention due to increasing concerns about embezzlement and fraud (Hidajat, 2025, Ginting et al., 2023). Effective management of these funds is essential for improving rural development and community welfare as a financial tool (Permatasari et al., 2024). However, challenges related to transparency, accountability, and the integrity of municipal officials sometimes hinder optimal outcomes. Enhancing leadership commitment, augmenting external oversight, and fostering active community engagement are crucial for resolving these issues (Savitri and Diyanto, 2019, Junaidi et al., 2025). These components jointly establish a governance structure that deters fraudulent behavior and promotes wise use of resources. The notion of intellectual capital, encompassing human, structural, and relational capital, has emerged as a vital element in improving the capabilities of village machinery for the efficient management of public resources (Abdallah et al., 2025). Strong relationships between local governments and community stakeholders improve oversight and ensure that village funds are used appropriately (Diansari et al., 2023). This study aims to examine the impact of intellectual capital and the governance competencies of village apparatus on fraud mitigation. The objective is to identify key contributing factors and propose effective methods to improve transparency, accountability, and overall integrity in the management of village funds in Indonesia.

 

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