Internal Audit Function and Financial Accountability of Laikipia County Government, Kenya
Loading...
Date
2025-03
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Governments worldwide face increasing pressure to strengthen financial accountability, optimize resource allocation, and enhance public service delivery.The prevalence of corruption particularly in the African region, has reignited the urgency for financial accountability and responsible stewardship. As a result, there is a growing global emphasis on ensuring financial accountability and the efficient use of public funds. The Auditor General reports consistently highlight significant challenges facing county governments in Kenya on financial resource management and accountability. Amongst the issues pointed out include inadequacy of financial support documentation, posting errors, over-expenditures and under-expenditures, consequently affecting the ability of county governments to deliver effective services to its citizens. Like many other organizations, Laikipia County Government has encountered challenges in overseeing its financial affairs and ensuring transparent utilization of public funds. This research sought to assess the effect of internal audit function on financial accountability in the county government of Laikipia, Kenya. The variables under examination included management support, professional competency, independence, and internal audit standards. The research was anchored on agency, stewardship, and stakeholder theory. The target population was 105 employees working in the finance and economic planning department of Laikipia County. From this population, a sample size of 51 employees was selected through stratified sampling. Data was collected through a uniform questionnaire. A representative sample of 10 respondents, mirroring the roles of those in the actual study, was randomly selected for a pilot study in Nyandarua County Government. Data was gathered, sorted, coded, and entered on SPSS version 20 for analysis. Descriptive statistical analysis was applied to provide a summary of the data using mean as well as standard deviation metrics. Correlation and multiple regression analysis were employed to explore relationships and provide insights into the variables. The outcomes were presented using tables and charts. Out of 51 distributed questionnaires only 48 were duly filled and qualified to be analyzed. The questionnaire was found to be reliable, and the data was normally distributed and homogeneous, with no intercorrelation between the variables under study. The model adopted in the study was confirmed significant using ANOVA. The research findings indicated a positive and statistically significant relationship between professional competence and financial accountability in the Laikipia County Government. Additionally, the study found that the independence of the audit function was a positive and significant predictor of financial accountability. Management support was also identified as positively and significantly influencing financial accountability within the Laikipia County Government. Furthermore, adherence to internal audit standards had a positive and significant impact on financial accountability in the Laikipia County Government. The research recommends that policymakers should: enhance the independence of the audit function in Laikipia County Government by structurally separating the internal audit section from the Finance and Economic Planning department to strengthen its oversight capacity; address understaffing in the internal audit section by recruiting qualified personnel to improve audit coverage and effectiveness; increase the funding allocated to support audit operations and acquire necessary equipment; implement measures to manage conflicts of interest, minimize management interference, and ensure adherence to auditing standards. To enhance effective financial accountability in the public sector, future research should examine factors influencing internal audit effectiveness.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Masters of Business Administration (Accounting Option) of Kenyatta University, March 2025.
Supervisor
Salome Musau