Institutional Capacity and Implementation of Financial Management Regulatory Framework in Devolved Governments in Kenya: A Case of Embu County
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Date
2023
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International Journal of Current Aspects
Abstract
Between 2013 and 2022, the county government of Embu faced persistent challenges in public resource management, leading to unfavorable audit opinions despite guidance from the Public Finance Management. Reports from the auditor general (2017, 2019, 2021), the controller of the budget (2019, 2020, 2022), and internal financial documents highlighted issues such as inefficiency, poor budget management obstructing development, low absorption capacity, and misalignment with the integrated development plan. This study investigated the effect of revenue, information sharing, budgeting, and expenditure management capacities on the implementation of the Financial Management Regulatory Framework in Embu County, Kenya. The study is anchored on the agency theory, institutional theory and resource dependency theory. Descriptive research design was adopted for this study, focusing intently on Embu County as the epicenter of the investigation. The research participants comprised 65 senior administrators well-versed in the nuances of the Public Finance Act of 2012. Due to the manageable size of the target population, a census study approach was adopted, ensuring a comprehensive understanding of the subject matter. Both primary and secondary data sources were tapped into. Primary data collection methods included structured questionnaires meticulously designed to extract specific insights, in-depth interviews for nuanced perspectives, and credible reports from authoritative sources. Secondary data, vital for contextualizing the primary findings, were sourced from a plethora of academic books, scholarly journals, and previously conducted research studies. The collected data was analyzed using a combination of descriptive statistics portrayed by percentages, mean scores, median charts and graphs. The inferential statistical analyses used is done through Anova, regression and R-squared. The study unearthed critical insights into the existing financial management capacities within Embu County. The findings collectively underscore the integral role of various capacities - revenue management, information sharing, budget making, and expenditure management - in ensuring robust financial accountability. Through examination of these capacities, the study illuminates the interconnections between efficient financial practices and regulatory compliance. The conclusion drawn from these findings emphasized the pressing need for strategic interventions within Embu County's financial management system. The study made the following recommendations: To enhance revenue management, the county was advised to overhaul its revenue collection systems, employing innovative technologies for efficiency and accuracy. Information sharing mechanisms were recommended to be streamlined, ensuring real-time communication between various governmental bodies and departments. Participatory budgeting processes, involving both public and administrative stakeholders, were recommended to instill transparency and community-driven decision-making. Furthermore, robust internal control systems for expenditure management were deemed imperative, necessitating the implementation of stringent audit protocols and oversight measures.
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Ng'ang'a, L., Minja, D., (2023). Institutional Capacity and Implementation of Financial Management Regulatory Framework in Devolved Governments in Kenya: A Case of Embu County. International Journal of Current Aspects, 7(3), 79-98. https://doi.org/10.35942/mv25m311