Effects of Government Capitation and Tuition Fees on Liquidity of Public Universities in Kenya
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Date
2024-10
Journal Title
Journal ISSN
Volume Title
Publisher
IAJEF
Abstract
The financial challenges faced by public
universities are a worldwide problem. Recent
studies have shown how public universities
cannot meet their liabilities when due. This
has led to many universities almost facing
insolvency due to many liabilities and fewer
assets to cover them. The study on the
liquidity of public universities has to be key to
knowing how well our universities are
equipped to perform better. How universities
finance their operations is a key concern to
stakeholders’ eager to solve the financial
difficulties public universities face. The study
had a general objective: to assess the effects
of government capitation and tuition fees on
the liquidity of public universities in Kenya.
The study was advised by Agency theory and
Keynesian economics theory. The study used
a Causal research design. The study's
population was comprised of 31 Chartered
public universities in Kenya, and it covered a
period of five years, from 2016 to 2020. A
census of all public universities was
undertaken due to the small population size.
The data was analysed using descriptive
analysis, including calculating means and
standard deviation and inferential analysis
using a panel data regression model. The
study used secondary data, which was
quantitative and collected from the Office of
the Auditor-General. The study obtained
permits for research from NACOSTI and
ensured that all data collected was only used
for the study. The study unveils intricate
insights into university liquidity in that
government capitation and tuition fees have
minimal liquidity effects. These findings
underscore the financial complexities within
universities, highlighting the necessity for
strategic financial planning and resource
allocation to ensure stability and resilience
amidst shifting regulatory and economic
landscapes. The study recommends that
universities Implement cost-effective
financial controls and measures to mitigate
potential liquidity. Strengthening monitoring
and evaluation systems is advised to ensure
effective financial management practices are
adopted. Policymakers are urged to review
funding allocation policies and establish financial resilience policies for public
universities while promoting collaborative
funding initiatives amongst universities.
Description
Article
Keywords
Citation
Mbugua, H. N., Gatauwa, J. M., Warui, F. W. (2024). Effects of government capitation and tuition fees on liquidity of public universities in Kenya. International Academic Journal of Economics and Finance, 4(3), 194-213.