Public Financial Management Practices and Financial Performance of Mandera County Government, Kenya

Abstract

According to the auditor general report, despite the huge sums of money counties receive, Mandera county government has not been able to meet their recurrent expenditures and revenue collection targets from 2015 to 2020. Past studies indicate that where there is prudent public financial management practices, county governments have been able to meet their mandates. Therefore, it was crucial to empirically examine the Mandera county's public finance management practices to see whether they had a substantial impact on financial performance. Examining the effect of public financial management practices on the financial performance of Kenya's Mandera County Government was the study's main goal. In particular, the research evaluated how Mandera County's financial performance was impacted by the budgeting process, resource management, financial policies, and internal audit. The study was founded on new public management theory, modern portfolio theory and pecking order theory. In this study, descriptive, explanatory and correlation research design were used. The 124 county government employees who worked in the revenue department were the target population. The sample size of 95 was determined using the stratified sampling approach. Both primary and secondary data were used in the study. While secondary data from audited financial reports was gathered using a data collection sheet, primary data were gathered using a questionnaire. In order to administer the questionnaire, the drop and pick later approach was used. To examine the data gathered, the study used regression, correlation, and descriptive statistics. The analysis was done with SPSS. Calculating descriptive statistics like frequency and percentage, measures of central tendency like the mean and mode, and inferential statistics like coefficient of determination, analysis of variance, and regression analysis were all part of the quantitative data analysis process. The results show that resource management and financial policies had a significant effect on financial performance. While internal audits and budgetary processes had insignificant effect on financial performance. The study recommended that the county governments should ensure full employment of public financial management practices through strict adherence to the laid down frameworks in budgetary processes, resources management, financial policies, and internal audit. This would lead to optimal use of the available funds.