Budgetary Process and Financial Performance of Non-Governmental Organizations in Kakuma Refugee Camp, Turkana County, Kenya

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Date
2023-11
Authors
Misigo, Evans
Journal Title
Journal ISSN
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Publisher
kenyatta university
Abstract
Budgeting is considered one of the most useful and successful accounting tools aiding management in ensuring that financial resources are utilized efficiently. When budgeting is properly understood and implemented sufficiently will facilitate effective utilization of resources, improve decision making, and create benchmarks to measure financial performance. Budgeting is an essential tool in goal identification in organizations, responsibilities reassignment, and execution of these goals. Several NGOs in Kenya have been facing problems ranging from financial misappropriation to engaging in activities outside their mandate. The government closed down 14 NGOs over misappropriation of funds in Kenya in 2014. This was followed with strict regulations to curb the activities of NGOs. This caused the deregistration of over 500 non-governmental organizations and subsequently 900 more NGOs. The study investigated the influence of budgetary process and financial performance of NGOs in Kakuma refugee camp, Turkana County, Kenya. The study specifically targeted the role of budgetary formulation, budgetary implementation, and budgetary monitoring and evaluation on the financial performance of the NGOs in Kakuma Refugee Camp. In addition, the study determines the moderating role of governance on the relationship between the budgeting process and the financial performance of NGOs in Kakuma Refugee Camp. The study was anchored by four theories that include; incremental budgeting, the theory of change, priority-based budgeting and liquidity preference theory. The study employed a descriptive research design. The study targeted all 24 NGOs in Kakuma Refugee Camp which had 220 budget experts and was done within a period of six months from January to June 2023. Census approach was adopted by the study since the population was small. The questionnaire was the main research tool that the study employed in capturing information. After completing data collection, analysis was undertaken using SPSS version 22. The data was analyzed using this software to generate both inferential and descriptive statistics. Descriptive statistics involved mean and standard deviation while inferential statistic involved correlation and multiple regression models where the relationship of study variables were determined. It was found by the study that budget formulation affected financial performance significantly. In addition, budget implementation is a significant predictor of financial performance. Further, budget monitoring and evaluation had a positive and significant influence on financial performance. Likewise, governance moderated the relationship between budget making process and financial performance. Budget formulation, budget implementation, and budget monitoring and evaluation are essential in enhancing the financial performance of NGOs in Kakuma refugee camps. Further, governance is a critical enabler in the budgeting process and financial performance of NGOs in Kakuma refugee camps. There is a need to prepare a consolidated budget during formulation to capture all possible donors that are willing to assist and avoid errors of omissions and commission. The study recommends robust mitigation measures that address deficits during budget implementation. The study recommends collaboration of all stakeholders involved in the process so that possible gaps can be identified and mitigated appropriately. The study recommends the formulation of a policy that regulates the financing and usage of resources by NGOs. Audit plays an important role in strengthening the budgeting process in an organization. NGOs are generally characterized by weak audit and regulatory frameworks. Research should be done to examine the impact of audits on the budgeting and financial performance of NGOs.
Description
A Research Project Submitted to the School Of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree of Master of Business Administration (Finance Option) Kenyatta University
Keywords
Non-Governmental Organizations, Kakuma Refugee Camp, Turkana County, Kenya
Citation