EFFECT OF BUDGETARY CONTROL PRACTICES ON FINANCIAL ACCOUNTABILITY OF NYAMIRA COUNTY GOVERNMENT, KENYA. A MODERATING ROLE OF GOVERNMENT POLICY
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Oct 7, 2023
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Abstract
This study assessed the effect of budgetary control practices on financial accountability in Nyamira County government. The specific objectives were; to examine the effect of budget formulation on financial accountability and to determine the moderating role of government budget policy on the relationship between budgetary control practices and financial accountability in Nyamira County. The study anchored on budget theory. The study adopted descriptive survey research design. The study was conducted in Nyamira County. The target population was 190 county employees. The sample size was 184 county employees. Stratified sampling technique was applicable for selecting employees. The data collection instrument was structured questionnaires. To ensure validity of the research instruments, the supervisors appraised and evaluated the applicability and appropriateness of the content clarity and adequacy of the construction of the instruments from a research perspective. Reliability was determined by use of Cronbach Alpha coefficient value. When Alpha coefficient value is more than 0.7 the data is reliable. Descriptive analysis such as mean, minimum, maximum, and standard deviation was used to analyze data. Inferential statistics; correlations and regression analysis were used to establish the relationship between variables. Presentation of data was done by tables and figures. The study concluded that the amount of money was approved by legislature through departmental actual cost estimates. The amount spent depended on actual cost estimates were approved by the authority upon completion of the financial year. However, the amount spent depended on actual cost estimates were approved by the authority upon completion of the financial year and earned value was approved through projected results budgeted costs of work performed in the county. Budget approval had a positive strong correlated with significant effect on to financial accountability shown by r .882 p=.000. Actual financial goals were maintained and controls by reviewing current position of the county. The study suggested for further research on budget approval and performance of other organization.
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References
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Alosani, Al-Dhaafri, & Yusoff, 2016Appraising the Impact of Budgeting and Planning on the Performance of Financial Institutions in Nigeria. Research Journal for Finance and Accounting, 2(5) 16-29.
Asrofah, Zailani, & Fernando, (2010) The Effect of the Budgeting Process on Budget Variance in Non-Governmental Organisations in Kenya. Masters Thesis, University of Nairobi.
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Batool Al-Farah, A. Shanikat (2012). The Accounting Variables’ Ability in Explaining the Volatility of Stock's Price: The Case of Amman Stock Exchange. European Journal of Management.
Bara P. D., (2016) IFRS in your pocket is a Budget, Conference paper, at Unia Press
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Cooik, Carreira D. (2018). The budget execution of the diversity policies in the Lula and Dilma Governments: Obstacles and challenges the budget. Revista Brasileira de Educação, 24.
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Dubus T, Kajik, A., (2015). Local Governance Practice and Quality of Transport Services Delivery in Nebbi District Local Government. Doctoral dissertation, Kyambogo Campus
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Kabiro R, Brinkerhoff A, D. W. (2017). Accountability and health systems: toward conceptual clarity and policy relevance. Health policy and planning, 19(6), 371-379.
Kiambi, Barongo, M. R. (2018). Factors Affecting Service Delivery In Parastatals: A Case Study Of Rural Electrification Authority, Kenya (Doctoral dissertation, Kabarak University).
Kiriria S. E., (2013). One Monitoring and Evaluation Framework for the Health Sector in Kenya.Hillis journal 2(15) 345-361
Knipe M., Ezzamel, M., & Willmott, H. (2002). Corporate governance and financial accountability: recent reforms in the UK public sector. Accounting, Auditing & Accountability Journal, 6(3), 1-11.
Kimani S., Gonçalves, S. (2015). The effects of participatory budgeting on municipal expenditures and infant mortality in Brazil. World development, 5(3)94-110.
Kuria, Hoffman, B. D., & Gibson, C. C. (2013). Fiscal governance and public services: evidence from Tanzania and Zambia. San Diego: Department of Political Science, University of California, San Diego, Unpublished Master project
Lambeet F., Frumence, G., Nyamhanga, T., Mwangu, M., & Hurtig, A. K. (2015). Challenges to the implementation of health sector decentralization in Tanzania: experiences from Kongwa district council. Global health action, 6(1), 20-29.
Maiingi I, Tsofa, B., Goodman, C., Gilson, L., & Molyneux, S. (2013). Devolution and its effects on health workforce and commodities management–early implementation experiences in Kilifi County, Kenya. International journal for equity in health, 16(1), 1-9.
Makori C. Y., Dale, A., Agarwal, A., Alonge, O., Edward, A., & Peters, D. H. (2018). Effectiveness of a pay-for-performance intervention to improve maternal and child health services in Kenya: a cluster-randomized trial. International journal of epidemiology, 45(2), 451-459.
Maritim G, Maluka, S. O., Hurtig, A. K., Sebastián, M. S., Shayo, E., Byskov, J., & Kamuzora,
Mutai F. A., (2015). Corruption and Contracts with States or State Owned Enterprises: Effects on Enforcement of the Contract in Arbitration Decisions. Available at SSRN 3(1) 62-67.
Mutungi T, Nyamita, M. O., Dorasamy, N., & Garbharran, H. L. (2017). Debt financing structure within the State-owned corporations in Kenya. Risk Governance &Control: Financial markets and institutions, 2(2) 14-29
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Nuthia A., Minja D., (2017). Compliance of Budgeting Practices to Budgeting Norms by
Government Entities in Kenya: A Case of the Legislature. International Journal of Current Aspects, 3(2), 122-134.
Nyabwanga Y., Rigii, G. P., Ogutu M., Awino, Z. B., & Kitiabi, R. (2014). Effect of Strategic Leadership, Ethics and Organizational Structure on Service Delivery in Kenyan County Governments. DBA Africa Management Review, 9(3) 13-28
Nyambura C, Maweu, F. K., & Karani, J. (2014). An E-government-integration framework for county governments in Kenya. International Journal of Science and Research, 5(2), 2014-2016.
Nyaoga P., Koech, G. M. (2015). The effect of budgetary controls on financial performance of Manufacturing companies in Kenya (Doctoral dissertation, University of Nairobi).
Owler R, ABDISA, W. (2009). Budget Management And Control: Special Emphasis On Ethiopian Road Authority (Doctoral dissertation, St. Mary's University).
Ojwangi M. OBI, J. N. (2016). Budgeting and budgetary control as the metric for corporate performance. International Journal of Sustainable development, 3(1), 1-23.
Onduso E. O., (2013). The effect of budgets on financial performance of manufacturing companies in Nairobi County (Doctoral dissertation, University of Nairobi).
Okuju B., Abdallah, S. S. (2016). Effect of Budgeting Process on Financial Performance of County Government of Kwale in Kenya, MBA Thesis to MKU.
Orise T., Bartle, J. R., & Shields, P. M. (2012). Applying pragmatism to public budgeting and Financial management, Online Science journal, 7(4) 45-67
Onduso L, Mmari, G. A., & Thinyane, L. C. (2019). Analysis of Factors Influencing Financial Performance of Savings and Credit Co-operative Societies in Lesotho: Evidence from Maseru District. International Journal of Financial Research, 10(2), 121-136.
Orodho R. (2005). Research methods in Education 5th Ed. Kenya. Routledge Flamer.
Padilla R., Staplefoote A., and Morganti T., Ramoutar, P. (2012). Predictive modeling of the factors impacting on budgetary control in institutions of higher learning. Management and social science journal 2(1) 23-45)
PFM Act, 2014 Performance Measurement in Small Firms in Ireland” Irish Accounting Review, 1(6), 28-45
Siyanbola F., Sani, A. U., Musa, Y. Y., Ahmed, H. S., & Rabiu, A. (2017). The Effect of Budgeting and Budgetary Control in Local Government Administration of Nigeria. European Journal of Business and Management, 8(22), 135-140.
Sharma D., Carmen-Veronica, Z. (2012). Accounting And Tax Issues Relating To Depreciation Of Tangible Assets. Annals-Economy Series, 1(3) 542-547.
Silva Q., and Jayamaha M., (2012) Budgetary monitoring of apparel industry performance in Sri Lanka. Strategic journal of management and business7(1) 451-461
Suberu J., Havens, H. (2016). Management Controls, Audit, and Evaluation. New York: SIGMA.
Shafudah J., Ray, H. G. (2014). Managerial Accounting Concept for Planning Control and Decision making Business. Publication Incorporated, Texas, USA.
Wanyama L. C. O., &Nipau, P. H., (2013). Budget Preparation and Implementation in the Nigerian Public Sector. Research Journal of Finance and Accounting 5(3) 444-459
World Bank (2012) The Basis for Budgeting and performance appraisal, Journal of strategic and change management 2(1) 45-57
Wamu W., Buyers H., & Holmes B., (2019). Cost Accounting and performance; Casell Ltd, United States Press Conference 4.
Yamane D., formula (1969) as adopted by Israel (2012) Research Methods for Business Students. London: Prentice Hall.
Aslani E., Waigwa M. W., & Njeru, A. (2017). Factors influencing management of procurement contracts in public security agencies: A case of Kenya Police Service. International Academic Journal of Procurement and Supply Chain Management, 2(2), 20-40.
Adongo W., Jagongo A., Kipkemoi, E., & Gacuiri, J. (2013). The Influence of Budgetary Allocations On Effective Procurement Contract Administration in Public Secondary Schools In Mogotio Sub County, Kenya. International Journal of Business and Processes (ISSN 2616-3209), 2(3), 9-9.
Al-Majali, Kimani, R. N. (2017). The effect of budgetary control on effectiveness of non-governmental organizations in Kenya (Doctoral dissertation).
Alosani, Al-Dhaafri, & Yusoff, 2016Appraising the Impact of Budgeting and Planning on the Performance of Financial Institutions in Nigeria. Research Journal for Finance and Accounting, 2(5) 16-29.
Asrofah, Zailani, & Fernando, (2010) The Effect of the Budgeting Process on Budget Variance in Non-Governmental Organisations in Kenya. Masters Thesis, University of Nairobi.
Alan and Emeka, Mohamed, I. A., Kerosi, E., & Tirimba, O. I. (2018). Analysis of the Effectiveness of Budgetary Control Techniques on Organizational Performance at DaraSalaam Bank Headquarters in Hargeisa Somaliland.Dissertation Malaysian University MBA online retrieved 2021.s
Allen I., Fernanda, M. Pinto (2007). The Relationship between Idiosyncratic Risk and Returns in the Brazilian Stock Market, Journal ofPontifical Catholic University of Rio de Janeiro. Brazil, 2(1) 23-34
Aman Khan, W. Bartley Hildreth (2012). Budget Theory in the Public Sector Accounting, Quorum Books, 5th ed. Apprentice print press, Haloi Street
Arora, Gekonde, E. N. (2014). The impact of performance budgeting on management of Parastatals in Kenya (Doctoral dissertation, University of Nairobi).
Batool Al-Farah, A. Shanikat (2012). The Accounting Variables’ Ability in Explaining the Volatility of Stock's Price: The Case of Amman Stock Exchange. European Journal of Management.
Bara P. D., (2016) IFRS in your pocket is a Budget, Conference paper, at Unia Press
Bartle, John R. and Patricia M., Shields T. (2008), "Applying Pragmatism to Public Budgeting and Financial Management". Faculty Publications Political Science. Texas State University. Paper 48
Barenboim Peter, (2009) Defining the Budget policy and performance of firms, The European Lawyer Journal Issue 9(10) 40-51
Bange S., and Mugendi, N. J. (2018). Effect of Financial Management Policy Implementation on Financial Performance of NGOS in Nairobi County (Doctoral dissertation, St. Paul's University).
Cooik, Carreira D. (2018). The budget execution of the diversity policies in the Lula and Dilma Governments: Obstacles and challenges the budget. Revista Brasileira de Educação, 24.
(Chiche,Kathungu, R. (2017). The Effect of Budget Utilization On the Performance of County Governments: A Case Study of Eastern Kenya Region (Doctoral dissertation, University of Nairobi).
Chidi and Shadare, Kiyemba, R. (2013). Determinants of financial accountability in Local Governments in Uganda: a case study of Wakiso District Local Council (Doctoral dissertation, Makerere University).
Drake, Müllerova, L., Paseková, M., & Hýblová, E. (2018). Harmonization of financial reporting of small and medium-sized enterprises in the Czech Republic. Journal of Modern Accounting and Auditing, 6(1), 55-65.
Dubus T, Kajik, A., (2015). Local Governance Practice and Quality of Transport Services Delivery in Nebbi District Local Government. Doctoral dissertation, Kyambogo Campus
Foster K., Nancy C., (2017) Challenges hindering effective strategic change management in counties in Kenya: a case of Nairobi County.MBA Project, Egerton University
Henry F., and Hirst, Keen, L. A., & Murphy M. P. (1987). Devolved budgetary management in local government: lessons from a shire county. Financial Accountability & Management, 12(1), 37-52.
Isaac H. Ngwakwe, C. C., (2014). Public sector financial accountability and service delivery. Journal of Public Administration, 47 (Special issue 1), 311-329.
Jayamaha F., McCrae M., & Aiken M., (2012). Accounting for infrastructure service delivery by government: Generational issues. Financial Accountability & Management, 16(3), 265-287.
Jasm H., (2010) the effect of government policy and financial performance of investment firms.Global Journal of business and management, 4(1) 34-46
John R., and Bartle E., (2011). Evolving Theories of Public Budgeting, JAI Press.
Katonei F., Ntongo, V. (2012). Budget Planning , Budget approval, Business Age,and Financial Performance in Small Businesses.PhD Thesis, Walden University, College of Management and Technology .
Kabiro R, Brinkerhoff A, D. W. (2017). Accountability and health systems: toward conceptual clarity and policy relevance. Health policy and planning, 19(6), 371-379.
Kiambi, Barongo, M. R. (2018). Factors Affecting Service Delivery In Parastatals: A Case Study Of Rural Electrification Authority, Kenya (Doctoral dissertation, Kabarak University).
Kiriria S. E., (2013). One Monitoring and Evaluation Framework for the Health Sector in Kenya.Hillis journal 2(15) 345-361
Knipe M., Ezzamel, M., & Willmott, H. (2002). Corporate governance and financial accountability: recent reforms in the UK public sector. Accounting, Auditing & Accountability Journal, 6(3), 1-11.
Kimani S., Gonçalves, S. (2015). The effects of participatory budgeting on municipal expenditures and infant mortality in Brazil. World development, 5(3)94-110.
Kuria, Hoffman, B. D., & Gibson, C. C. (2013). Fiscal governance and public services: evidence from Tanzania and Zambia. San Diego: Department of Political Science, University of California, San Diego, Unpublished Master project
Lambeet F., Frumence, G., Nyamhanga, T., Mwangu, M., & Hurtig, A. K. (2015). Challenges to the implementation of health sector decentralization in Tanzania: experiences from Kongwa district council. Global health action, 6(1), 20-29.
Maiingi I, Tsofa, B., Goodman, C., Gilson, L., & Molyneux, S. (2013). Devolution and its effects on health workforce and commodities management–early implementation experiences in Kilifi County, Kenya. International journal for equity in health, 16(1), 1-9.
Makori C. Y., Dale, A., Agarwal, A., Alonge, O., Edward, A., & Peters, D. H. (2018). Effectiveness of a pay-for-performance intervention to improve maternal and child health services in Kenya: a cluster-randomized trial. International journal of epidemiology, 45(2), 451-459.
Maritim G, Maluka, S. O., Hurtig, A. K., Sebastián, M. S., Shayo, E., Byskov, J., & Kamuzora,
Mutai F. A., (2015). Corruption and Contracts with States or State Owned Enterprises: Effects on Enforcement of the Contract in Arbitration Decisions. Available at SSRN 3(1) 62-67.
Mutungi T, Nyamita, M. O., Dorasamy, N., & Garbharran, H. L. (2017). Debt financing structure within the State-owned corporations in Kenya. Risk Governance &Control: Financial markets and institutions, 2(2) 14-29
Mugenda and Mugenda 2003) Research Methodology methods and techniques second edition. Mwai E, Mpaata, K. A., Kakumba, U., & Lubogoyi, B. (2016). Influence of local government budget management practices on collective service delivery in the rural districts of Uganda-the quest for goal congruence. African Journal of Public Affairs, 11(2), 1-19.
Nuthia A., Minja D., (2017). Compliance of Budgeting Practices to Budgeting Norms by
Government Entities in Kenya: A Case of the Legislature. International Journal of Current Aspects, 3(2), 122-134.
Nyabwanga Y., Rigii, G. P., Ogutu M., Awino, Z. B., & Kitiabi, R. (2014). Effect of Strategic Leadership, Ethics and Organizational Structure on Service Delivery in Kenyan County Governments. DBA Africa Management Review, 9(3) 13-28
Nyambura C, Maweu, F. K., & Karani, J. (2014). An E-government-integration framework for county governments in Kenya. International Journal of Science and Research, 5(2), 2014-2016.
Nyaoga P., Koech, G. M. (2015). The effect of budgetary controls on financial performance of Manufacturing companies in Kenya (Doctoral dissertation, University of Nairobi).
Owler R, ABDISA, W. (2009). Budget Management And Control: Special Emphasis On Ethiopian Road Authority (Doctoral dissertation, St. Mary's University).
Ojwangi M. OBI, J. N. (2016). Budgeting and budgetary control as the metric for corporate performance. International Journal of Sustainable development, 3(1), 1-23.
Onduso E. O., (2013). The effect of budgets on financial performance of manufacturing companies in Nairobi County (Doctoral dissertation, University of Nairobi).
Okuju B., Abdallah, S. S. (2016). Effect of Budgeting Process on Financial Performance of County Government of Kwale in Kenya, MBA Thesis to MKU.
Orise T., Bartle, J. R., & Shields, P. M. (2012). Applying pragmatism to public budgeting and Financial management, Online Science journal, 7(4) 45-67
Onduso L, Mmari, G. A., & Thinyane, L. C. (2019). Analysis of Factors Influencing Financial Performance of Savings and Credit Co-operative Societies in Lesotho: Evidence from Maseru District. International Journal of Financial Research, 10(2), 121-136.
Orodho R. (2005). Research methods in Education 5th Ed. Kenya. Routledge Flamer.
Padilla R., Staplefoote A., and Morganti T., Ramoutar, P. (2012). Predictive modeling of the factors impacting on budgetary control in institutions of higher learning. Management and social science journal 2(1) 23-45)
PFM Act, 2014 Performance Measurement in Small Firms in Ireland” Irish Accounting Review, 1(6), 28-45
Siyanbola F., Sani, A. U., Musa, Y. Y., Ahmed, H. S., & Rabiu, A. (2017). The Effect of Budgeting and Budgetary Control in Local Government Administration of Nigeria. European Journal of Business and Management, 8(22), 135-140.
Sharma D., Carmen-Veronica, Z. (2012). Accounting And Tax Issues Relating To Depreciation Of Tangible Assets. Annals-Economy Series, 1(3) 542-547.
Silva Q., and Jayamaha M., (2012) Budgetary monitoring of apparel industry performance in Sri Lanka. Strategic journal of management and business7(1) 451-461
Suberu J., Havens, H. (2016). Management Controls, Audit, and Evaluation. New York: SIGMA.
Shafudah J., Ray, H. G. (2014). Managerial Accounting Concept for Planning Control and Decision making Business. Publication Incorporated, Texas, USA.
Wanyama L. C. O., &Nipau, P. H., (2013). Budget Preparation and Implementation in the Nigerian Public Sector. Research Journal of Finance and Accounting 5(3) 444-459
World Bank (2012) The Basis for Budgeting and performance appraisal, Journal of strategic and change management 2(1) 45-57
Wamu W., Buyers H., & Holmes B., (2019). Cost Accounting and performance; Casell Ltd, United States Press Conference 4.
Yamane D., formula (1969) as adopted by Israel (2012) Research Methods for Business Students. London: Prentice Hall.