Public Financial Management Practices, Oversight and Financial Accountability of Nandi County Government, Kenya
Loading...
Date
2025-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Even though the Kenya’s Constitution 2010 introduced County governments in ensuring devolution of functions and bring services closer to the citizens, research studies argue that elements of public finance management practices and oversight are not treated with seriousness. Moreover, the PFM Act, 2012 that is deemed essential regulation for effective development projects is not utilized in most cases. Most studies argue that misappropriations, corruption and other vices are the main predicament of developments in these governments. In the recent past, Office of the Auditor General (OAG) and Controller of Budget (CoB) reported that despite the huge sums of money counties receive, most county governments do not meet their recurrent expenditures and revenue collection targets from 2019 to date. Even with the red flags in these reports, financial accountability challenges are still witnessed by most Kenyan county governments. Therefore, it was crucial to empirically examine how public finance management practices and oversight influences financial accountability in Nandi County Government. The study probed into the effects of financial management practices and oversight on financial accountability with specific examination on the effects of financial planning, resource mobilization, internal controls and financial reporting. Theories anchoring the review are accountability role, institutional and agency theories. Utilizing descriptive research, 327 FEP department employees were targeted and 98 sampled stratified. Piloting was employed to ensure reliability and validity of the structured questionnaire since it was used in the collection of data. Descriptive and inferential statistics including multiple regression were utilized in determining research findings which were presented using tables and figures. Diagnostic tests including multi-collinearity, normality and heteroscedasticity were done. Ethical considerations included adherence to Kenyatta University and NACOSTI guidelines, ensuring integrity and transparency of the research process was upheld. The research found that financial planning (β=0.0548, p=0.004), public procurement practices (β=0.1097, p=0.003), financial reporting practices (β=0.0274, p=0.001), and internal control (β=0.0731, p=0.001) positively and significantly influenced the financial accountability of Nandi County government in Kenya with oversight significantly moderating financial management practices relationship with financial accountability. Research concludes that financial planning helps the Nandi County government allocate resources according to priorities, ensuring funding for essential services like healthcare, education, and infrastructure. The competitive public procurement process enhances transparency, while standardized procedures reduce officials' discretion and the risk of corruption. Regular financial reporting provides citizens with insights into government fund usage, fostering trust in tax allocation. Additionally, strong internal controls ensure compliance with laws and policies, reducing legal risks and boosting public confidence. Consistent oversight strengthens the government-citizen relationship by demonstrating a commitment to transparency and accountability. The study recommends that the County involve citizens in the budgeting process to align financial priorities with community needs, enhancing transparency and accountability. Regular training for procurement officers and finance personnel on best practices, legal frameworks, and International Financial Reporting Standards (IFRS) is essential for compliance and understanding. A gradual implementation of IFRS is advised to improve the reliability of financial statements. Additionally, an independent audit committee should be set up by the county, reporting to the county assembly to oversee internal audits, which should be scheduled regularly to ensure compliance and identify improvement areas. Finally, fostering a collaborative relationship with the Office of the Auditor General is vital for timely external audits.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Master of Business Administration (Finance Option) of Kenyatta University, June 2025.
Supervisor
Salome Musau