This study focuses on evaluating and improving the effectiveness of village fund management in Merauke Regency, South Papua. Village fund management faces unique challenges due to the region's geographical and socio-economic conditions. Organizational behavior transformation is critical, particularly in addressing weaknesses in organizational structure, communication, work culture, and monitoring systems, to achieve sustainable development outcomes. A qualitative case study approach was employed, with data collected through in-depth interviews, participant observation, and document analysis between May and August 2024. Merauke Regency was selected for its diversity in management practices. Thematic analysis and triangulation techniques were used to ensure the reliability and validity of findings. The findings reveal that transforming the organizational structure from hierarchical to flexible team-based models, improving communication, and fostering a positive work culture significantly enhanced village fund management. These changes led to better coordination, responsiveness, efficiency, and transparency. Increased community participation and strengthened monitoring and evaluation also contributed to more effective development outcomes.This study provides practical recommendations for policymakers to design more sustainable and inclusive village fund management strategies. Data-driven and participatory approaches are crucial for maximizing development impacts and ensuring socio-economic benefits at the village level.