Impact of Financial Pressures on Procurement Fraud of Public National Referral Hospitals in Nairobi County, Kenya
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Date
2024-10
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IJRISS
Abstract
Although public procurement is expected to play a central role in ensuring that hospitals deliver effective and
efficient services, this objective has not always been met due to marauding fraudulent practices in the acquisition
of medical supplies. The government of Kenya has since adopted a myriad of regulatory and legislative measures
to counter public procurement fraud in the health sector, but the problem still persists. Only limited studies have
attempted to examine the role of financial pressures in catalyzing procurement fraud among National Referral
Hospitals (NRHs) in Kenya. Based on the Fraud Diamond Theory (FDT), this study assessed the effect of
perceived financial pressure on procurement fraud in public NRHs. The specific objective of the study was to
examine the impact of perceived financial pressures (personal financial strain, job security concerns, financial
incentives for fraud, external financial pressures, and perceived unfair compensation) on procurement fraud of
public NRHs. A quantitative approach and a cross-sectional descriptive survey design were employed. The
sample size was made up of 101 procurement and supply chain management personnel drawn randomly across
three public NRHs in Nairobi County, Kenya. Data were collected through a structured questionnaire and
analyzed using SPSS version 29.0.2. The findings of the correlation and linear regression analysis reveal that
perceived financial pressure significantly influences procurement fraud in public NRHs. Specifically, perceived
financial pressure explains 26.6% (R² = .266) of the variance in procurement fraud. The study concludes that
procurement and supply chain management officers under financial strain, whether due to personal or
professional reasons, are more likely to engage in fraudulent activities as a means of alleviating their financial
burdens. The study argues that there is a need for public NRHs to address the financial well-being of their
procurement staff to mitigate the risk of fraud. Future research could explore other potential drivers of
procurement fraud in different public sector contexts to further generalize these findings.
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Citation
Omata, V. O., Gathoni, B., & Musumba, G. (2024). Impact of Financial Pressures on Procurement Fraud of Public National Referral Hospitals in Nairobi County, Kenya.