Effect Of Public Financial Management Practices On Development Budgetary Absorption Within Government Departments In Kenya

Abstract

In order for the government of Kenya to meet its fiscal objectives, it is necessary that government ministries effectively be able to spend budgeted provisions to the highest levels. Government officers need to understand the importance of being able to fully utilize funds as budgeted and as efficiently as possible so as to have an impact to the highest population. The broad objective of this study is to establish the effects of public financial management practices on budgetary absorption within government departments in Kenya. The specific objectives of this study were to determine the impact of financial administration on budgetary absorption, to find out if financial controls has an effect on budgetary absorption, to determine the effect of budget management on budgetary absorption and to find out the effectiveness of fiscal accountability on budgetary absorption within government departments in Kenya. This study adopted a descriptive research design. The target population for this study was all government departments in the country. Focus was on population in the accounts, finance department and other officers responsible for budget preparation and implementation in the 18 government ministries and there are 1,045 of such employees. This study had a sample size of 209 employees from all the targeted departments. This study exclusively used primary data collection method. Primary data was derived from questionnaires distributed to employees of the 18 government ministries. This study collected both qualitative and quantitative data. Content analysis was used on qualitative data collected. On the other hand the researcher used descriptive and inferential statistics to analyse the quantitative data. Majority of the respondents stated that management strength had the greatest effect in relation to the financial control factors on budgetary absorption. This study results show that most of the respondents felt that budget management had an impact on budgetary absorption. Most of the respondents felt that establishing a clear budgeting process which links to strategic priorities and business needs had the greatest effect among the factors considered in relation to budget management. Most of the respondents suggested fiscal accountability affected budgetary absorption. The findings show that most of the respondents were of the opinion that conducting fiscal reviews had the greatest effect on budgetary absorption. In conclusion for governments to achieve high budgetary absorption then reforming central bureaucracies, financial administration and enhancing public financial management should be primarily a problem of political will and government capacity to effectively use persuasive and manipulative forms of power. In summary effective public service delivery requires an appropriate mix of inputs in relation to financial control. In conclusion budget rules have an effect on budgetary absorption and regulations are in three kinds: procedural rules; rules on transparency, and numerical targets such as balanced budget laws and thus budget procedures formulation, approval and implementation of the budget strongly influence fiscal outcomes. It recommended that financial administration performance information needs to be used systematically in the resource allocation and financial administration process. The study recommends that greater effort is required to enforce uniform accounting standards as one of the financial control. There are research gaps in relation to the effect of public financial management reforms in the effective management of public funds in Kenya and establishing the role of budgeting on performance of organizations and to determine a performance measurement approach to improve financial management in government departments.