Village fund corruption remains a serious issue due to the widesperead misappropriation
of public finances and the shift in the legal paradigm following the Constitutional Court
Decision, which emphasizes actual state financial losses. The dualism in law enforcement
practices and the high cost of handling corruption cases-often exceeding the value of the
state losses-have resulted in legal uncertainty and are therefore relevant to be examined
through Jeremy Bentham’s theory of legal utility. This research aims to analyze the mech-
anism for the recovery of state dinancial losses, the criteria for terminating legal proceed-
ings, and the application of the principle of legal utility by law enforcement authorities in
handling village fund corruption cases. This study employs a normative juridical research
method using statutory, case, and conceptual approaches, based on the examination of pri-
mary and secondary legal materials. The analysis is conducted qualitatively through a lit-
erature review with a descriptive-analiytical presentation grounded in legal provisions and
Jeremy Bentham’s theory of legal utility. The fimdings incdicate that following Constitu-
tional Court Decision Number 25/PUU-XIV/2016, state financial loss has become an es-
sential element in the enfocement of village fund corruption cases, thereby making the re-
covery of such losses the primary objective. Law enforcement practices demonstrate incon-
sistencies, particularly regarding the recovery of state losses, which contribute to legal
uncertainty. From the perspective of Jeremy Bentham’s theory of legal utility, the criminal
punishment of perpetrators who have returned state losses does not always yield optimal
benefits, especially when the cost of handling the case exceeds the losses incurred. There-
fore, the recovery of state financial losses at a certain stage should be considered a basis
for terminating legal proceedings in order to ensure efficiency, rationality, and legal utility
for the state and society.