Management of working capital in Government Technical Training Institutions
Kimani, Lucy Wanjiru
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The purpose of this study was to find out the working capital approaches used by government technical training institutions in managing their current assets and current liabilities. The study's specific objective was to find out the approaches used by technical training institutions in managing working capital components, factors that influence working capital management and the extent of use of finance models and techniques. Technical training plays a strategic role in providing highly skilled artisans, craftsmen, technicians and technologists with the expectation of bringing about economic growth. Many heads of institutions lack the capacity to oversee and account for utilization of resources Sessional Paper No. 1 (2005). A census was undertaken of 42 government technical training institutions under MOHEST, in which the Principals were the respondents. This was because the number was small enough to conduct a census. Data was collected by use of questionnaires containing structured and unstructured questions. Questionnaires were received from 34 respondents which represented 81 % response rate. The data was analysed using descriptive statistics including graphs charts percentages, means and standard deviations. The findings of this study suggest that the management of working capital components in government technical training institutions is moderate. The study has identified the factors that influence working capital management, and has also established the extent of application of finance techniques and models in these institutions. The management of working capital in these institutions must not be left to intuition or the rule of the thumb. It should be improved, by having written policies on each of the working capital components, by application of techniques and models which include planning, controlling and monitoring of current assets and current liabilities in order to achieve liquidity. Computerization of key departments will enhance operating and financial efficiencies considering that working capital management depends on quantitative data which must be accurate and timely for proper decision making. The government should continue assisting these public institutions, whose products will be instrumental in achieving the Kenya Vision 2030.