Integrated Financial Management Information System and Quality of Financial Reporting in Nairobi City County Government, Kenya
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Date
2023
Authors
Ngala, Boniface Makau
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Quality of financial reporting address all the issues that relates to accountability and transparency on public funds. In 2003, Kenya implemented Integrated Financial Management Information System (IFMIS) to improve service provision especially on financial matters raising accountability and transparency. Although Nairobi City County Government (NCCG) incorporated IFMIS on its operations in 2013 after county government operations commenced, adverse opinion on the reports are always given. These opinions create mistrust on the financial reports produced by NCCG. The key aim of the study was to investigate the effects of IFMIS to the quality of financial reporting in Nairobi City County Government, Kenya. There were four key variables used in the study including IFMIS Budgeting, IFMIS Procurement, IFMIS Recording, and IFMIS Information and Communication Technology (ICT). Diffusion of Innovation theory, Systems theory and Agency theory were the theories supporting the study. It used a causal research design in gathering, measuring and analyzing data. The study targeted 425 individuals working in the finance and economic planning department of Nairobi City County Government. This study used primary data as well as data from secondary sources. The research used data from 85 individuals forming a sample of 20%. The study used method of stratified random sampling to provide good coverage of the population hence greater precision. Primary data collection was through questionnaires where piloting was undertaken to improve its reliability and validity. Secondary data from different financial reports of NCCG were used in reinforcement of the primary data. Data collection began after the researcher obtained authorization letter from Kenyatta University together with a research permit acquired from NACOSTI. Multiple regression analysis assisted in determination of cause and effect relationship between IFMIS and quality of financial reporting. SPSS aided in analysis of study data and Analysis of Variance (ANOVA) results aided in revealing statistical significance of the model. The researcher presented the findings in charts, graphs, tables and prose writings. Based on the analyzed results the study concludes that IFMIS budgeting had positive significant effect to the quality of financial reporting in NCCG. Similarly, the study concludes that IFMIS procurement had enhanced the quality of financial reporting in NCCG. The study also concludes that there was statistical significant evidence to support the positive effect that IFMIS ICT had on quality of financial reporting in NCCG. Further, the study concludes that IFMIS recording significantly influenced the quality of financial reporting in NCCG. Finally, the study concludes that generally IFMIS had positive significant effect to the quality of financial reporting in NCCG. The study recommends that NCCG should often budget and procure using IFMIS. Secondly, the study recommends employees in NCCG to give attention to financial recording process when using IFMIS. Finally, the study recommends NCCG to maintain the state of its ICT system as it has positive impact to quality of financial reporting, IFMIS budgeting and IFMIS procurement. The study suggested that further studies on effects of other IFMIS components to quality of financial reporting in a different county or national government to be undertaken.
Description
A Research Project Submitted to the School Of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree Of Master of Business Administration (Accounting Option) of Kenyatta University
Keywords
Integrated Financial Management Information System, Financial Reporting, Nairobi City County Government, Kenya