FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF NON-COMMERCIAL SEMI-AUTONOMOUS GOVERNMENT AGENCIES IN SOCIAL PROTECTION SECTOR IN KENYA
FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF NON-COMMERCIAL SEMI-AUTONOMOUS GOVERNMENT AGENCIES IN SOCIAL PROTECTION SECTOR IN KENYA
Simon Katee Mutungi - Master of Business Administration (Finance Option) of Kenyatta University, Kenya
Dr. Geoffrey Mbuva - Kenyatta University, Kenya
ABSTRACT
Financial management practices are common in most of the organizations, be it private or state-owned entities and the conceptual connection with financial performance amongst many organizations still portray controversial debate amongst scholars up to date. The specific objectives of this study was to evaluate the influence of budget management on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya; to examine the influence of financial controls on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya and to evaluate the influence of funding practices on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya. This study is underpinned by three theories namely goal setting, contingency, and agency theories. Descriptive survey research methodology was adopted. The three hypotheses were tested at 95% confidence level using multiple linear regressions models. The population size was 19 non-commercial SAGAs under social protection sector in Kenya. Data was collected from the corresponding 19 senior officers, namely, chief finance officers or/and chief accountant whereby structured questionnaires were utilized. Statistical Package for Social Sciences (SPSS version 23.0) tool was used for data analysis and the results therefrom presented using statistical tools to provide insight on the degree of cause effect between the predictor and the dependent variable. It was established that the influence of budget management on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya was direct and statistically significant. The financial controls also portrayed a positive and statistically significant influence on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya and funding practices had a positive significant influence on financial performance of Semi-Autonomous Government Agencies under social protection sector in Kenya. This study recommends that budget management in relation to enhancing the performance and operations of SAGAs be embraced by all government agencies. This is because from the study, Budget management acted as a control tool to keep the Agencies on track. Secondly, the SAGAs need to put in place strong internal controls to ensure that the funds received and operations on the Agencies are well monitored. This is because from the study, it was determined that SAGAs that embraced financial controls, had a monitoring team to monitor progress of projects and regularly undertook cost-benefit analysis on projects which led to enhancement in performance. Thirdly, the SAGAs need to undertake funding practices and benefits realized from previous grants received from donors. This will enable SAGAs expand their operations and have a good structure in place thus leading to improvement of performance.
