Accountability and Financial Sustainability of Public Governance Non‐Government Organization in Nairobi County, Kenya
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Date
2018-10
Authors
Chelangat, Veronica
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Nongovernmental organizations play key role in delivering education, healthcare, social aid
and other welfare activities in most developing countries like Kenya and hence their financial
sustainability cannot be ignored. Financial sustainability requires that NGOs be able to meet
all their resource and financing obligations and remain in existence for unforeseeable future.
However, just a small number (10 percent) of NGOs that had managed to achieve a desirable
level of institutional and financial sustainability. The studies conducted have mainly focused
on the outcome of the projects, capacity building, and stakeholder involvement rather than the
factors influencing the financial sustainability aspect. Additionally, little mention is made on
the financial sustainability of NGOs which may be due to them being associated with having
unlimited donor funding. This implies that the issue of NGO sustainability is yet to be fully
explored and hence NGOs managements are not fully informed on the effect accountability has
on financial sustainability and may continue to suffer from lack financial sustainability. The
study sought to determine the effect of accountability on public governance NGO financial
sustainability. Specifically, the study determined the effect of financial planning, financial
monitoring and evaluation and financial controls on financial sustainability of public
governance NGOs in Nairobi County. The study also examined the moderating effect of NGO
financial regulation on the relationship between accountability and NGO financial
sustainability. The study was guided by resource mobilization theory, agency theory and fraud
theory. The study adopted descriptive research design and data was collected using primary
means which was through the use of questionnaires. The study target population was the 550
public governance NGOs in Nairobi County dealing with public governance. Systematic
sampling technique was used to identify 15 percent of the population as the respondents where
every 6th organization was studied. The collected data was analyzed using both quantitative
and qualitative data analysis methods. SPSS was used for data entry, descriptive analysis,
reliability analysis, correlation analysis and multiple regression analysis. Diagnostic tests done
included multicollinearity, test for normality and Heteroscedasticity. Data was collected by use
of questionnaires and analyzed using descriptive statistics and inferential statistics. The study
found out that the independent variables Financial Control (r=0.685, p<0.05), Financial
Planning (r=0.438, p<0.05) and Financial Monitoring and Evaluation (r=0.597, p<0.05) had
positive and significant effect on NGO financial sustainability. Regulatory Framework was
established not to have moderating impact on the relationship between accountability and
financial sustainability (F-change=1.037, p-change=0.312). Accountability was found to have
a positive and significant effect on NGO financial sustainability (r=.709, p<0.05). The study
concluded that high number of NGOs were not sustainable a problem which could be addressed
through NGOs improving their accountability practices. The study recommended that the
management at the NGOs to work towards improving accountability practices with aim of
enhancing financial sustainability of the NGOs.
Description
A Research Thesis Submitted to the School of Business in Partial Fulfilment for the Award of the Degree in Master of Science in Finance, Kenyatta University