Financial Management Practices and Financial Sustainability of Donor-Funded Projects, A Case Study of Windle International Kenya

Abstract

Donor funded projects run by the Non Profit making Organizations play a very indispensable role in underdeveloped nations in ensuring that the community’s needs that are or may be impossible to be met by the government are met by Non Profit making Organizations. They also play a very important role in ensuring development in areas that are very less developed by providing to the needs of the society. Despite the Non-Governmental Organizations being very crucial in the developing countries like Kenya, their financial sustainability is a challenge since many rely on donor funding and at times some have failed to continue with their normal operations when donations ceases. The study’s main intent was to investigate the effect of financial management practices on financial sustainability of the donor-funded projects in the case of Windle International Kenya. The objectives of this study were: to establish the effect of budgeting control on financial sustainability of donor funded projects; to establish the effect of financial reporting on financial sustainability of donor funded projects; to find out the extent to which internal control affects financial sustainability of donor funded projects and to determine the effect of financial control on financial sustainability of donor funded projects in the case of Windle International Kenya. The study was carried out in Dadaab, Garissa county during the final half of the year 2020.The accounting process theory, theory of budgeting and agency theory were used to underpin this study. This study used descriptive survey design and explanatory research design. The target population was sixty-eight senior management program supervisors, field officers and finance officers who were also the respondents for this study. Questionnaire was the main research instrument that the study relied on to collect primary data which was later analyzed by use of descriptive statistics inform of frequencies, means and standard deviations and inferential analysis such as Pearson correlations and regression analysis. Prior to inferential analysis, multicollinearity test was conducted to establish the correlation between the independent and dependent variables. The information was further displayed in frequency tables and figures. The study key findings were that budgeting control, financial reporting, internal control and financial control were both used as financial management practices in the organization and they positively influenced the financial sustainability of projects in the organization. The study concluded that budgeting control, financial reporting, internal control as well as financial control both positively affect the financial sustainability of projects in the organization. The study recommends that organizations should consider putting various financial management practices such as budgeting control, financial reporting and internal controls due to their huge significance influence on the financial sustainability and that projects are constantly monitored and risks assessed prior to project implementation.