Relationship Between Public Financial Management Practices And County Government Funds Absorption Rate In Kenya

ABSTRACT

The study sought to find out the relationship between public financial management practices and county government funds absorption rate in Kenya. Many studies have been done on this field of public finance but none has focused particularly on public financial management practices and county government funds absorption rate in Kenya. Improved public financial management practices provide a unique opportunity for Kenyans to experience enhanced development due to high funds absorption rate. The study was guided by the following objectives; to establish the relationship between public debt management and County government funds absorption rate in Kenya, to investigate the relationship between expenditure control and County government funds absorption rate in Kenya and to find out the relationship between revenue collection administration and County government funds absorption rate in Kenya. The main instrument of data collection was a structured questionnaire which was administered to the county government chief officers of finance and principal accountants. The data collection procedure used to collect the questionnaire was drop and pick approach. The research questions were systematically generated from the objectives. A Descriptive survey research design was used in this study. The 47 counties were taken as a unit of analysis and 94 County Chief Officers of Finance and Principal Accountants became the study unit of observation. Secondary sources were also used to obtain information; data from the published annual reports and county government sources spanning three years. The content validity of the data collection instruments was assured by ensuring that each of the items in the questionnaire and interview schedule addressed specific contents and objectives of the study. Descriptive statistics and regression analysis with the help of Statistical Package for Social Sciences (SPSS) and Microsoft version of Excel were used to analyze data. The responses in the questionnaires were coded into common themes to facilitate analysis. Analyzed data was presented using tables, charts and graphs. The findings of the study indicated that there is a positive relationship between public debt management and the county government funds absorption rate in Kenya. Concerning the expenditure controls, the study revealed a positive relationship between expenditure controls and county government funds absorption rate in Kenya. Regarding revenue collection administration, the study also revealed a positive relationship between revenue collection administration and county government funds absorption rate in Kenya. It was concluded that improvement of public financial management practices is widely recognized as one of the essential elements in enhancing the county government funds absorption rate in Kenya.