Influence Of Financial Management Practices On The Revenue Collection Performance Of Kajiado County Government, Kenya

Abstract

The promulgation of the new constitution in Kenya in 2010 brought forth new structures in the form of devolved governments. The new structure had the main purpose of ensuring that efficient delivery of services and every citizen experienced economic development. This noble idea by itself was to be financed by a substantial chunk of funds from the national government and revenue cash flows collected by the counties. The study was on the influence of financial management practices on the revenue collection performance of Kajiado County Government. The key variables being Revenue Sources, Financial Stewardship and Revenue Administration Strategies and their related influence on revenue collection performance in Kajiado County Government. The key theories reviewed to anchor the study were; public choice theory, prospect theory and expectation theory with these theories looking at explaining the influence of the independent variables on revenue collection performance. The study adopted a descriptive research design, which had a target population of 125 staff from Kajiado County Government. A census approach was employed due to the small size and accessibility of the respondents. The study used a structured questionnaire as the data collection tool that was tested for its reliability and validity to ensure consistency of information derived from the primary sources. Descriptive and inferential statistics were carried out for data analysis and development of the study model. The study concluded that the revenue sources, revenue administration practices in place and the financial stewardship of staff collectively have a moderate positive influence on the revenue collection performance of Kajiado County Government. The study had formulated three study hypothesis from the conceptual framework which were subsequently tested and the null hypothesis being rejected in all three hypothesis. The accepted study hypothesis were; (1) Revenue source significantly influences revenue collection performance in Kajiado County Government, (2) Revenue Administration Practices significantly influences revenue collection performance in Kajiado County Government and (3) Financial Stewardship significantly influences revenue collection performance in Kajiado County Government. The study also revealed that at 0.05 significance level, there exists a positive significant relationship between revenue sources, revenue administration practices, financial stewardship and revenue collection performance of Kajiado County Government with these financial management practices accounting for 20.34% variation on the revenue collection performance. The study recommends that Kajiado County Government should; strategize in identifying and adopting more revenue sources that have the capacity to generate sustainable cash flows for operations and economic development; revenue administration practices need to be regularly reviewed and updated to cater for the frequent changes in the business environment and volatile taxpayer behavior thus sealing existing and emerging loopholes; Investment in more target oriented training, especially on revenue administration is recommended to address existing gaps in staff proficiency and subsequently improve staff morale. The main limitation of the study was that the study was carried out only in Kajiado County thus not generalizable in the Kenyan context. Further research on other Kenyan Counties is recommended.