Internal Control Systems and Financial Management of County Governments in Kenya
Loading...
Date
2023
Authors
Njaya, Nafula Anne
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Having internal controls in any institution is especially important to provide efficient and
effective modes of service delivery within its operations. An effective control mechanism
ensures that an institution has accurate and highly reliable system to manage its finances.
Moreover, such financial systems comply with both local and international regulations
regarding an institution’s operational requirements. By and large, this specific
examination tries to inspect the impacts of internal control frameworks on activities of
Kenyan County Governments, zeroing in on their monetary area. In particular, this study
examines the impact of Kenyan County internal control setup, internal audit department,
risk management function and financial management systems. The study was anchored
on theories of stewardship, stakeholder, agency and systems in financial evaluation and
control mechanisms. The research also adopted an inclusive survey involving cross
sectional description since such approach provides reliable outcomes and desirable
characteristics at any given time. A descriptive design technique was used to model the
research activity. The study’s target population comprised of all 47 county governments
of Kenya, who were currently established in the 2010 Kenyan Constitution. The study
collected secondary data which was available and accessible on the Office of Controller
of Budgets under the county reports sections, Office of the Auditor General and
Commission for Revenue Allocation. Data analysis incorporated statistical descriptive
techniques of standard deviation, mean scores and analysis involving and regression.
Moreover, the data collected was coded and checked over and over again for consistency,
possible errors and cases of omission. Finally, the research findings were organized
through frequency tables, graphs, tables and graphical methods. The study responses
gathered through questionnaires were structured and analyzed through the computer
software called “Statistical Package for Social Science (SPSS)”. The study found that
internal audit function (β=.966, p<0.05), internal control environment (β=.430, p<0.05),
internal monitoring (β=.330) and risk Management (β=.078, p<0.05) all had significant
effect on financial management among Counties in Kenya. The study concludes that
internal control system is a significant driver of financial management. This study
recommends that the executive leadership of the Counties in Kenya should provide the
right internal control environment that would support financial management practices.
Internal auditors and the audit committee members of the all the counties in Kenya
should work together to safeguard the public interest. The risk managers of the County
Governments in Kenya should review or adopt sound risk management policy statements.
Regular monitoring reports should be published and availed for public scrutiny on how
funds are utilized by Counties in Kenya.
Description
A Research Project Submitted to the School of Business, Law and Economics in Partial Fulfilment of the Requirements for the Award of Master of Business Administration in Finance of Kenyatta University, March 2023.
Keywords
Internal Control Systems, Financial Management, County Governments, Kenya