Accountability and Financial Sustainability of Public Governance Non‐Government Organization in Nairobi County, Kenya
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Nongovernmental organizations play key role in delivering education, healthcare, social aid and other welfare activities in most developing countries like Kenya and hence their financial sustainability cannot be ignored. Financial sustainability requires that NGOs be able to meet all their resource and financing obligations and remain in existence for unforeseeable future. However, just a small number (10 percent) of NGOs that had managed to achieve a desirable level of institutional and financial sustainability. The studies conducted have mainly focused on the outcome of the projects, capacity building, and stakeholder involvement rather than the factors influencing the financial sustainability aspect. Additionally, little mention is made on the financial sustainability of NGOs which may be due to them being associated with having unlimited donor funding. This implies that the issue of NGO sustainability is yet to be fully explored and hence NGOs managements are not fully informed on the effect accountability has on financial sustainability and may continue to suffer from lack financial sustainability. The study sought to determine the effect of accountability on public governance NGO financial sustainability. Specifically, the study determined the effect of financial planning, financial monitoring and evaluation and financial controls on financial sustainability of public governance NGOs in Nairobi County. The study also examined the moderating effect of NGO financial regulation on the relationship between accountability and NGO financial sustainability. The study was guided by resource mobilization theory, agency theory and fraud theory. The study adopted descriptive research design and data was collected using primary means which was through the use of questionnaires. The study target population was the 550 public governance NGOs in Nairobi County dealing with public governance. Systematic sampling technique was used to identify 15 percent of the population as the respondents where every 6th organization was studied. The collected data was analyzed using both quantitative and qualitative data analysis methods. SPSS was used for data entry, descriptive analysis, reliability analysis, correlation analysis and multiple regression analysis. Diagnostic tests done included multicollinearity, test for normality and Heteroscedasticity. Data was collected by use of questionnaires and analyzed using descriptive statistics and inferential statistics. The study found out that the independent variables Financial Control (r=0.685, p<0.05), Financial Planning (r=0.438, p<0.05) and Financial Monitoring and Evaluation (r=0.597, p<0.05) had positive and significant effect on NGO financial sustainability. Regulatory Framework was established not to have moderating impact on the relationship between accountability and financial sustainability (F-change=1.037, p-change=0.312). Accountability was found to have a positive and significant effect on NGO financial sustainability (r=.709, p<0.05). The study concluded that high number of NGOs were not sustainable a problem which could be addressed through NGOs improving their accountability practices. The study recommended that the management at the NGOs to work towards improving accountability practices with aim of enhancing financial sustainability of the NGOs.