Financial Management Practices and Performance of Government Projects in Kitui County, Kenya
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Financial management entails theprocess of planning, organizing, controlling,and monitoring financial resources to achieveinstitutional goals and objectives. Financial management practice entails physical control, authorization and approval control, personnel control, segregation of duties, supervision control, accounting control, management control, and organizational control. Theresearchfocusedon the link betweenthe performance of government projects and some of the financial management practices; namely,financial planning, financial monitoring, financial control, and financial evaluation. Financial Management is one of the key challenges for governments and other public institutions. Government projects are crucial for the economic development of any country. Indeed, the government is the largest entity that spendsa huge amount of money in implementing its projects. Financial Management is one of the key challenges facing the public sector in Kenya. Only institutions with sound financial structures can fulfil their missions while responding to the global complex environmental. A report by the auditor general on county government financial management shows massive mismanagement of funds in some counties, which suggests that the financial process of the county governments is weak, yet the successful performance of a project is dependent on appropriate financial planning. The objective of the study was to examine the relationship between financial management practices and the performance of Kitui county government’s projects. Therefore, the study sought to investigate the effects of financial planning, financial monitoring, financial control, and financial evaluation on the performance of the county government’s projects. A descriptive research design was applied in this study. Thestudy targetedthe population of all thetwo hundred and seven employees of Kitui county government working under the ministry of finance and economic planning. The study was conducted among 67 participants.Data collection was done usingstructured questionnaires, which was coded and analyzed using the statistical package for social sciences. The findings revealed that there is an insignificant positive correlation between financial planning and government project performance (r =0.129, P=0.340); a significant positive correlation between financial monitoring and project performance (r = 0.367, p=0.005); a positive and significant correlation between financial control and project performance (r =0.533, P=0.000); and a positive and insignificant correlation between financial evaluation and project performance (r =0.245, P=0.063).Therefore, the study concludes that financial planning positively affects government project perforce in Kitui County, but the effect is not significant, but financial monitoring has a positive and strong effect on project performance in Kitui County. The study further concludes that financial control has a positive and strong effect on the performance of government projects in Kitui County. It was also concluded that financial evaluation has a positive effect on the performance of government projects in Kitui County, but the effect is insignificant.The findings contribute to the body of knowledge as it offer new information about the way financial monitoring, planning, evaluation, and control influence the performance of government projects. The implication is that while financial planning is crucial for the performance of government projects other factors must be established to ensure that there is project performance. It is suggested that the county should continue enhancing financial planning mechanisms, financial monitoring mechanisms, financial controls, and financial evaluation mechanisms for better project performance. In addition, it was suggested that further similar research bedone in other counties as well as a study to determine other factors that affect government project performance.