PUBLIC FINANCIAL MANAGEMENT PRACTICES AND PERFORMANCE OF SELECTED COUNTY GOVERNMENTS IN KENYA
Keywords:
Financial Management, Public Sector, Performance, Revenue Management.
Abstract
Although county governments were introduced for devolution, misappropriation and corruption hinder this objective. This study aimed to examine how financial management practices affect the performance of Central Rift County governments. The research was informed by agency, institutional, and stewardship theories. A descriptive research design was used. The target population was employees within Nakuru County’s public finance sector. A census of all 80 employees was done, and a Cronbach alpha of 0.7 was used to determine the reliability of the research instruments. Secondary data was collected from published materials from county and government agencies. Data was analyzed through the statistical package for social sciences to provide inferential and descriptive statistics. The study revealed that county governments use budget implementation, regular reviews, and monitoring to improve compliance and performance. There was a moderate positive and statistically significant correlation between public budgeting on the performance of Central Rift County governments (r = 0.443; p < 0.05); an average positive and statistically significant correlation between public financial reporting on the performance of Central Rift County governments (r = 0.441; p < 0.05); a moderate positive correlation between public revenue mobilizations on the performance of Central Rift County governments (r = 0.441; p < 0.05), and a moderate positive correlation between public finance procurement on the performance of central rift county governments (r = 0.441; p < 0.05). There is a need to realign the budget processing and reporting format in conformity with IPSAS reporting standards.
JEL Classification Codes: H1, H2, H3, H6, H6.
References
Adler, R., Stringer, C., Shantapriyan, P., Akbar, R., Pilcher, R., & Perrin, B. (2012). Performance measurement in Indonesia: the case of local government. Pacific Accounting Review, 24(3), 262-291.
Agba, M. S., Akwara, A. F., & Idu, A. (2013). Local government and social service delivery in Nigeria: a content analysis. Academic Journal of Interdisciplinary Studies, 2(2), 455-461.
Ahmed, S., & Nganga, P. (2019). Internal control practices and financial performance of county governments in Kenya's coastal region. International Journal of Current Aspects, 3(5), 28-41.
Asatiani, A. (2022). What Can Public Sector Organizations Learn from Private Sector Experiences of Robotic Process Automation?. In Service Automation in the Public Sector: Concepts, Empirical Examples and Challenges (pp. 219-227). Cham: Springer International Publishing.
Biwott, D. K. (2017). Revenue mobilization approaches and their influence on County socio-economic development in North rift region, Doctoral Dissertation, Moi University.
Bryman, A., & Bell, E. (2015). Business Research Methods (Vol. fourth). Glasgow: Bell & Bain Ltd.
Cangiano, M. M., Curristine, M. T. R., & Lazare, M. M. (2013). Public financial management and its emerging architecture. International Monetary Fund.
Cedergren, A., Hassel, H., & Tehler, H. (2022). Tracking the implementation of a risk management process in a public sector organisation–A longitudinal study. International Journal of Disaster Risk Reduction, 81, 103257. https://doi.org/10.1016/j.ijdrr.2022.103257
Cherotich, C. (2018). The effectiveness of procurement practices on performance of county governments in Kenya: a study of Kericho county government, master’s Dissertation, Kisii University.
Cheruiyot, M. P. (2018). Effect of Public Financial Management Practices on Performance of County Governments in Kenya. Doctoral Dissertation, JKUAT.
Cheruiyot, M. P., Namusonge, G. S., & Sakwa, M. (2018). Influence of internal control practices on performance of county governments in Kenya. International Journal of Social Sciences and Information Technology, 4(9), 224-234.
Commission for Revenue Allocation (2018). Revenue allocation formula. Retrieved from https://www.crakenya.org/information/revenue-allocation-formula
Covaleski, M. A., Evans III, J. H., Luft, J. L., & Shields, M. D. (2003). Budgeting research: three theoretical perspectives and criteria for selective integration. Journal of Management accounting research, 15(1), 3-49.
Development Initiatives (2018). Strengthening subnational government town-source revenue mobilization in Kenya: Progress, challenges, and opportunities. Retrieved from http://devinit.org/wp-content/uploads/2018/12/Strengthening-subnational-government-OSR-mobilisation-in-Kenya.pdf
Garcia-Lacalle, J., & Torres, L. (2021). Financial reporting quality and online disclosure practices in Spanish governmental agencies. Sustainability, 13(5), 2437.
Greasley, S., John, P., & Wolman, H. (2011). Does government performance matter? The effects of local government on urban outcomes in England. Urban Studies, 48(9), 1835-1851.
Hair Jr, J. F. (2015). Essentials of business research methods. Routledge.
John, K., Makhija, A. K., & Ferris, S. P. (Eds.). (2014). Corporate governance in the US and global settings. Emerald Group Publishing.
Kathungu, R. (2016). The Effect of Budget Utilization on the Performance of County Governments: A Case Study of Eastern Kenya Region. MBA Research Project, University of Nairobi
Kibunja, E. W. (2017). Budgetary process and financial performance of Murang’a county government, Kenya. MBA Project, Kenyatta University.
Kong, Y., Lartey, P. Y., Bah, F. B. M., & Biswas, N. B. (2018). The value of public sector risk management: An empirical assessment of Ghana. Administrative Sciences, 8(3), 40. https://doi.org/10.3390/admsci8030040
Kothari, C. R. (2009). Research Methodology (2nd ed.). London, UK: New Age International.
Lerno, D. L. (2016). Relationship between Internal Controls and Performance of County Government in Kenya. MBA Project. School of Business. University of Nairobi.
Madegwa, B. L., Makokha, N. E., & Namusonge, G. (2018). Effects of automation of revenue collection on the performance of county government: a case study of Trans Nzoia, county government. Kenya. European Journal of Business and Management, 10(11), 118-124.
Mathenge, P. W., & Muturi, W. (2017). Effects of financial management practices on financial performance of public Universities in Kenya. International Journal of Social Sciences and Information Technology, 3(8), 2354-2363.
Mauro, S. G., Cinquini, L., & Grossi, G. (2020). Insights into performance-based budgeting in the public sector: A literature review and a research agenda. Public Budgeting in Search for an Identity, 7-27.
Mbae, L. N. (2014). Public procurement law and procurement performance of county governments in Kenya: Case of Machakos county government. MBA Research Project, University of Nairobi.
Musiega, A., Tsofa, B., Nyawira, L., Njuguna, R. G., Munywoki, J., Hanson, K., ... & Barasa, E. (2023). Examining the influence of budget execution processes on the efficiency of county health systems in Kenya. Health policy and planning, 38(3), 351-362.
Muthee, N. M., & Mang’ana, R. (2021). Influence of system automation on service delivery at the Ministry Of Public Service And Gender in Nairobi-Kenya. International Academic Journal of Human Resource and Business Administration, 3(10), 153-166.
Mutungi, Z. W. (2017). Effects of budgeting and budgetary control on the financial performance of devolved government in Kenya, MBA Research Project, University of Nairobi.
Ndiiri, F. (2016). E-procurement implementation and performance of County governments in Kenya. MBA Research Project, University of Nairobi.
Njahi, J. T. (2017). Effect of financial management practices on the financial performance of county governments in Kenya. Master of Business Administration Thesis: University of Nairobi.
Office of the Auditor General (2018). County Assembly of Nakuru financial reports for the year ended 2017/2018. Retrieved from http://oagkenya.go.ke/index.php/reports/cat_view/2-reports/11-county-governments/308-county-government-reports-2017-2018/322-nakuru-county
Office of the Auditor General (2018). Summary of the Report of the Auditor-General for the County Governments for the Year 2017/2018. Retrieved from http://oagkenya.go.ke/index.php/reports/cat_view/2-reports/11-county-governments
Onyango, R. O. (2014). Influence of Internal Controls on Performance of County Governments in Kenya. MBA, the University of Nairobi.
Scott, W. R. (2005). Information processing: Creating organizations. Englewood Cliffs, NJ: Prentice Hall
Tumushabe, G. W., Muyomba-Tamale, L., & Mushemeza, E. D. (2010). Monitoring and assessing the performance of local government councils in Uganda: Background, methodology and score card.
Turley, G., Robbins, G., & McNena, S. (2015). A framework to measure the financial performance of local governments. Local Government Studies, 41(3), 401–420.
Wolk, H. I., Dodd, J. L., & Rozycki, J. J. (2008). Accounting theory: conceptual issues in a political and economic environment (Vol. 2). Sage.
Agba, M. S., Akwara, A. F., & Idu, A. (2013). Local government and social service delivery in Nigeria: a content analysis. Academic Journal of Interdisciplinary Studies, 2(2), 455-461.
Ahmed, S., & Nganga, P. (2019). Internal control practices and financial performance of county governments in Kenya's coastal region. International Journal of Current Aspects, 3(5), 28-41.
Asatiani, A. (2022). What Can Public Sector Organizations Learn from Private Sector Experiences of Robotic Process Automation?. In Service Automation in the Public Sector: Concepts, Empirical Examples and Challenges (pp. 219-227). Cham: Springer International Publishing.
Biwott, D. K. (2017). Revenue mobilization approaches and their influence on County socio-economic development in North rift region, Doctoral Dissertation, Moi University.
Bryman, A., & Bell, E. (2015). Business Research Methods (Vol. fourth). Glasgow: Bell & Bain Ltd.
Cangiano, M. M., Curristine, M. T. R., & Lazare, M. M. (2013). Public financial management and its emerging architecture. International Monetary Fund.
Cedergren, A., Hassel, H., & Tehler, H. (2022). Tracking the implementation of a risk management process in a public sector organisation–A longitudinal study. International Journal of Disaster Risk Reduction, 81, 103257. https://doi.org/10.1016/j.ijdrr.2022.103257
Cherotich, C. (2018). The effectiveness of procurement practices on performance of county governments in Kenya: a study of Kericho county government, master’s Dissertation, Kisii University.
Cheruiyot, M. P. (2018). Effect of Public Financial Management Practices on Performance of County Governments in Kenya. Doctoral Dissertation, JKUAT.
Cheruiyot, M. P., Namusonge, G. S., & Sakwa, M. (2018). Influence of internal control practices on performance of county governments in Kenya. International Journal of Social Sciences and Information Technology, 4(9), 224-234.
Commission for Revenue Allocation (2018). Revenue allocation formula. Retrieved from https://www.crakenya.org/information/revenue-allocation-formula
Covaleski, M. A., Evans III, J. H., Luft, J. L., & Shields, M. D. (2003). Budgeting research: three theoretical perspectives and criteria for selective integration. Journal of Management accounting research, 15(1), 3-49.
Development Initiatives (2018). Strengthening subnational government town-source revenue mobilization in Kenya: Progress, challenges, and opportunities. Retrieved from http://devinit.org/wp-content/uploads/2018/12/Strengthening-subnational-government-OSR-mobilisation-in-Kenya.pdf
Garcia-Lacalle, J., & Torres, L. (2021). Financial reporting quality and online disclosure practices in Spanish governmental agencies. Sustainability, 13(5), 2437.
Greasley, S., John, P., & Wolman, H. (2011). Does government performance matter? The effects of local government on urban outcomes in England. Urban Studies, 48(9), 1835-1851.
Hair Jr, J. F. (2015). Essentials of business research methods. Routledge.
John, K., Makhija, A. K., & Ferris, S. P. (Eds.). (2014). Corporate governance in the US and global settings. Emerald Group Publishing.
Kathungu, R. (2016). The Effect of Budget Utilization on the Performance of County Governments: A Case Study of Eastern Kenya Region. MBA Research Project, University of Nairobi
Kibunja, E. W. (2017). Budgetary process and financial performance of Murang’a county government, Kenya. MBA Project, Kenyatta University.
Kong, Y., Lartey, P. Y., Bah, F. B. M., & Biswas, N. B. (2018). The value of public sector risk management: An empirical assessment of Ghana. Administrative Sciences, 8(3), 40. https://doi.org/10.3390/admsci8030040
Kothari, C. R. (2009). Research Methodology (2nd ed.). London, UK: New Age International.
Lerno, D. L. (2016). Relationship between Internal Controls and Performance of County Government in Kenya. MBA Project. School of Business. University of Nairobi.
Madegwa, B. L., Makokha, N. E., & Namusonge, G. (2018). Effects of automation of revenue collection on the performance of county government: a case study of Trans Nzoia, county government. Kenya. European Journal of Business and Management, 10(11), 118-124.
Mathenge, P. W., & Muturi, W. (2017). Effects of financial management practices on financial performance of public Universities in Kenya. International Journal of Social Sciences and Information Technology, 3(8), 2354-2363.
Mauro, S. G., Cinquini, L., & Grossi, G. (2020). Insights into performance-based budgeting in the public sector: A literature review and a research agenda. Public Budgeting in Search for an Identity, 7-27.
Mbae, L. N. (2014). Public procurement law and procurement performance of county governments in Kenya: Case of Machakos county government. MBA Research Project, University of Nairobi.
Musiega, A., Tsofa, B., Nyawira, L., Njuguna, R. G., Munywoki, J., Hanson, K., ... & Barasa, E. (2023). Examining the influence of budget execution processes on the efficiency of county health systems in Kenya. Health policy and planning, 38(3), 351-362.
Muthee, N. M., & Mang’ana, R. (2021). Influence of system automation on service delivery at the Ministry Of Public Service And Gender in Nairobi-Kenya. International Academic Journal of Human Resource and Business Administration, 3(10), 153-166.
Mutungi, Z. W. (2017). Effects of budgeting and budgetary control on the financial performance of devolved government in Kenya, MBA Research Project, University of Nairobi.
Ndiiri, F. (2016). E-procurement implementation and performance of County governments in Kenya. MBA Research Project, University of Nairobi.
Njahi, J. T. (2017). Effect of financial management practices on the financial performance of county governments in Kenya. Master of Business Administration Thesis: University of Nairobi.
Office of the Auditor General (2018). County Assembly of Nakuru financial reports for the year ended 2017/2018. Retrieved from http://oagkenya.go.ke/index.php/reports/cat_view/2-reports/11-county-governments/308-county-government-reports-2017-2018/322-nakuru-county
Office of the Auditor General (2018). Summary of the Report of the Auditor-General for the County Governments for the Year 2017/2018. Retrieved from http://oagkenya.go.ke/index.php/reports/cat_view/2-reports/11-county-governments
Onyango, R. O. (2014). Influence of Internal Controls on Performance of County Governments in Kenya. MBA, the University of Nairobi.
Scott, W. R. (2005). Information processing: Creating organizations. Englewood Cliffs, NJ: Prentice Hall
Tumushabe, G. W., Muyomba-Tamale, L., & Mushemeza, E. D. (2010). Monitoring and assessing the performance of local government councils in Uganda: Background, methodology and score card.
Turley, G., Robbins, G., & McNena, S. (2015). A framework to measure the financial performance of local governments. Local Government Studies, 41(3), 401–420.
Wolk, H. I., Dodd, J. L., & Rozycki, J. J. (2008). Accounting theory: conceptual issues in a political and economic environment (Vol. 2). Sage.
Published
2023-11-25
How to Cite
Mong’are, W., & Atheru, G. (2023). PUBLIC FINANCIAL MANAGEMENT PRACTICES AND PERFORMANCE OF SELECTED COUNTY GOVERNMENTS IN KENYA. American International Journal of Social Science Research, 14(1), 43-53. https://doi.org/10.46281/aijssr.v14i1.2128
Issue
Section
Original Articles/Review Articles/Case Reports/Short Communications
Copyright (c) 2023 Winnie Mong’are, Gerald Atheru
This work is licensed under a Creative Commons Attribution 4.0 International License.
