Internal Control Systems and Public Financial Management in the County Government of Siaya, Kenya
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Date
2023
Authors
Keya, Moses Okoth
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Most governmental organizations and agencies in many regions of the world have
inadequate financial management in comparison to commercial companies. Poor
financial management in the civil service can be ascribed to poor or insufficient
internal control mechanisms. Organizations must establish and execute robust internal
control systems in order to follow reliable financial management practices.
Nevertheless, empirical research results pertaining to relationship amongst internal
control systems and financial management in the civil service are scarce. There's been
a huge uproar on poor financial management of resources in the county government
Siaya and for the last four years the County has been receiving qualified and adverse
audit opinion on financial statement from Auditor General which is warrying. This
study therefore attempted to determine the effect of internal control system on public
financial management in Siaya County Government, Kenya. The study's specific
objectives were to ascertain the effect of control environment on public financial
management, to evaluate the effect of control activities on public financial
management, to evaluate the effect of risk assessment on public financial management
and to ascertain the effect on information and communication on public financial
management of Siaya County Government, Kenya. The study applied attribution
theory, budget theory, stewardship theory, and agency theory. The study embraced a
descriptive design and targeted 120 accounting, finance, and administrative personnel
in County Government departments, in all the six Sub-Counties in Siaya County.
Primary data was gathered via a structured questionnaire. Collected data was gleaned,
coded and analyzed using a multiple linear regression model with the help of SPSS
version 26 from which descriptive statistics was employed in the data analysis to
determine the means and standard deviations and inferential statistics was utilized to
ascertain the correlation between the internal control system and public financial
management. The findings were displayed in the form of tables and figures. The study
adhered to ethical considerations accordingly. The study showed that control
environment had a p-value of 0.035, control activities, p=0.040, information and
communication p=0.00 all above had the significance threshold of p< 0.05 hence all
had significant effect on public financial management. Only risk assessment had
p˃0.05 thus insignificant effect. The findings indicated that majority of the responders
agreed with the fact that control environment, control activities, risk assessment and
information and communication indeed affected public financial management in
Siaya County. The study recommended strict adherence to the implementation of
internal control systems since it enhances integrity and ethical values, competency,
reporting structure and separation of powers, increase in detection of errors,
prevention errors and correction of errors, improved effective communication,
enhance financial reporting software and increased timely communication in the
County
Description
Research Project Submitted to the School of Business,
Economics and Tourism in Partial Fulfillment for Award
of Degree of the Master in Business Administration
(Finance Option) in Kenyatta University
Keywords
Internal Control Systems, Public Financial Management, County, Government, Siaya, Kenya