FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF STATE CORPORATIONS UNDER STATE DEPARTMENT FOR TOURISM IN KENYA
Cecilia Muthoni Njaga - Master In Business Administration (Finance), Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Vincent Nyagilo, EBS(K) - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Joshua Wephukulu Matanda (PhD) - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The study sought to find the effect of financial management practices on the financial performance of State Department for Tourism in Kenya. It specifically sought to analyse the effects of financial planning procedures, internal controls practices, financial reporting analysis, and fixed assets management practices. The study was informed by budget control theory, contingency theory, accounting theory and conservative plan theory. The research used a descriptive research design that targeted a population of 71 selected employees employed at various levels of staff establishment in the 8 state corporations under the State Department for Tourism in Kenya. Since the target population was rather small, a census approach was chosen. Primary and secondary data were employed in the investigation. Secondary data was gathered from the individual state corporations' annual audited reports. With the aid of semi-structured questionnaires, primary data was gathered. A pilot test was carried out to evaluate the study instruments reliability and validity. Both quantitative and qualitative data were produced by the questionnaires. The results of the thematic analysis used to analyze the qualitative data were presented narratively. Using SPSS version 24, inferential and descriptive statistics were utilized to analyze quantitative data. The frequency distribution, standard deviation, percentages, and mean were all examples of descriptive statistics. The Pearson correlation coefficient and multivariate linear regression analysis were used for inferential analysis. The study's findings were presented using tables and figures (line graphs). The findings of the inferential analysis revealed that the performance of State Corporations under the State Department for Tourism in Kenya is positively and significantly impacted by financial planning techniques and internal control procedures. The study therefore concluded that financial management practices have a significant effect financial performance of state corporations in Kenya. The study recommends that state corporations under the state department for tourism develop plans to boost revenue generation and cut costs associated with service provision, increase the frequency of risk assessment to monthly basis, increase frequency of income statement analysis and cash flow statement to at least quarterly basis. Further the study recommended that training should be given on the significance of lowering the possibility of loss, theft, or insufficient control over assets. In addition, state corporations under state department for tourism should develop an asset safety and maintenance strategy.