Njihia, Jeffrey NjorogeMakori, Daniel2025-06-092025-06-092025-05https://ir-library.ku.ac.ke/handle/123456789/30154ArticleThis study examined the effect of cash reconciliations, as a critical component of internal control systems, on the financial performance of Kenya Power in the Central Rift Region, Kenya. A quantitative research design was employed, targeting 155 finance division staff across eight sub-regions, with a sample of 62 respondents selected using proportional stratified sampling. Data were collected through structured questionnaires, assessing cash reconciliation practices on a five-point Likert scale, and secondary data on financial performance (Return on Assets) from Kenya Power’s financial statements (2018–2022). Descriptive statistics revealed strong employee confidence in cash reconciliation practices, including regular petty cash reconciliations, frequent surprise checks, bank reconciliations, independent verification, and high-quality record-keeping. Inferential statistics, including Pearson correlation and regression analyses, confirmed a significant positive relationship between cash reconciliations and financial performance. However, financial performance exhibited volatility over the study period, suggesting that while cash reconciliations are impactful, other factors also influence outcomes. The study concludes that effective cash reconciliations enhance financial accountability and transparency, though broader strategies are needed for sustained stability. Recommendations include adopting automated reconciliation systems, enhancing staff training, increasing bank reconciliation frequency, implementing robust monitoring, and integrating digital payment systems to strengthen financial controls and support long-term performance. These findings provide actionable insights for Kenya Power to optimize its internal control systems and financial outcomes in the Central Rift Region.