Factors Affecting Revenue Collection in Local Authorities in Kenya (A Case of Municlpal Council of Nyeri)

Abstract

Many local authorities have adequate revenue bases to finance the current level of services, but collection levels are often low. Improvement of revenue collection in Local Authorities is the key to meeting their financial obligations leading to realization of their mandate to offer quality and timely services to the residents, the demand for which may exceed the available resources .. The purpose of the study was to establish the factors affecting revenue collection in local authorities. The study narrowed on effects of government policies and regulations, local authority information financial and operations management systems, revenue enhancement plans and employee skills on revenue collection. Relevant literature was reviewed. Employing a descriptive research design the study targeted civic leaders, public officers and chief officers in Municipal Council of Nyeri who totaled to 354. Using disproportionate stratified sampling, the researcher selected 130 civic leaders, public officers and chief officers to participate in the study. Data was collected using a structured pre-tested questionnaire. Data analysis was done with the help of SPSS version 20 and presentation done in terms of frequencies and percentages in the form of figures and tables. The study found that Local Authority Information Financial and Operations Management Systems (LAIFOMS) was picked by most (27%) respondents as the factor with the highest influence on revenue collection while according to 24% of the study -participants, government policies had the least influence on revenue collection. Regression analysis revealed that LAIFOMS (sig. = 0.017) and employee skills (sig. =0.038) explained up to 27% of local authority revenue collection. The study concluded that the revenue collectors appreciated the role of information technology in ensuring effective revenue collection however the availability and accessibility was a hindrance to effective LAIFOMS implementation. Among others, the study recommended that the effectiveness of the local Authority Information Financial and Operations Management Systems (LAIFOMS) can be bolstered by increasing tea availability of computers and adding more staff to ensure efficiency in revenue collection.