EFFECT OF TRANSPARENCY OF PUBLIC FINANCES ON BUDGET EXECUTION OF COUNTY GOVERNMENTS IN KENYA
Carol Ntinyari Muriungi - Postgraduate Student, Department of Accounting & Finance, School of Business, Economics and Tourism, Kenyatta University, Kenya
Dr. Faith Nkuru (PhD) - Lecturer, Department of Accounting & Finance, School of Business, Economics and Tourism, Kenyatta University, Kenya
Dr. Jeremiah Koori (PhD) - Lecturer, Department of Accounting & Finance, School of Business, Economics and Tourism, Kenyatta University, Kenya
ABSTRACT
County governments in Kenya manage substantial public resources devolved from the national government and are therefore expected to execute budgets efficiently and transparently. Transparency of public finances encompassing open access to fiscal information, timely financial reporting, and public disclosure of budgetary data as a fundamental requirement for accountability and sound budget execution. However, challenges in budget absorption, incomplete project implementation, and weak financial reporting persist across many Kenyan county governments. Despite a rich body of literature on public financial management, limited empirical studies examine how transparency of public finances specifically shapes budget execution outcomes at the county level. This study addressed this gap by investigating the effect of transparency of public finances on budget execution of county governments in Kenya. The study was grounded on stakeholder theory, which explains how openness and accountability in financial information sharing influence the behavior of diverse actors involved in budget management. A positivism research philosophy and explanatory research design were adopted. The study targeted employees in Finance and Economic Planning departments, budget offices, county treasuries, IFMIS units, and internal audit sections. A sample of 332 respondents was drawn using stratified and purposive sampling, of whom 283 responded, representing a response rate of 85.24%. Primary data was collected through structured questionnaires, and secondary data were drawn from county budget implementation reports and the Controller of Budget's office covering financial years 2013 to 2024. Data were analyzed using SPSS version 27, employing descriptive statistics and simple linear regression. Findings revealed that transparency of public finances has a positive and statistically significant effect on budget execution (R = 0.611, R² = 0.373, β = 0.614, p < 0.001). The study concludes that greater openness in financial reporting, timely disclosure of budget information, and enhanced public access to fiscal data significantly improve how county governments plan, allocate, and account for public resources. The study recommends that county governments should adopt open budget platforms, conduct regular independent audits, and invest in digital financial management systems to strengthen budget execution performance.