EFFECT OF BUDGETING PRACTICES ON THE FINANCIAL ACCOUNTABILITY OF COUNTY GOVERNMENTS IN WESTERN REGION, KENYA

Abstract

Budgeting practices are fundamental to the improvement of the financial accountability of public institutions and must be practiced at all times of the year based on sound resource spending. While financial management is devolved across Kenya, county governments continue to experience concerns about aligning the budget with strategic plans, delivering the projects on time, and maintaining fiscal transparency. This research examined the influence budgeting practices have on financial accountability in county governments in Western Region, Kenya. It investigated the effect of budget development processes, budget implementation, budget monitoring and budget adjustments on financial accountability. The study was informed by Public Budget Theory as the main theory, and the Expenditure Theory and Contingency Theory as the supporting theories. It adopted descriptive, correlational, and explanatory research design targeting 262 officers including County Executive Committee Members (CECMs) for Finance, Directors for Budget, Accounting Services, Internal Audit, and Members of County Assemblies. By applying Slovin’s formula, 158 respondents were sampled. Using a stratified and simple random sampling 142 MCAs were selected while16 senior officials (4 CECMs and 12 Directors) were sampled using a census method. The data reliability and validity were established using Cronbach’s alpha (0.834) and KMO as (0.668–0.775) which were acceptable values. Closed-ended questionnaires were used to collect primary data. Data were analysed using SPSS version 26. Descriptive statistics included mean, percentage, standard deviation and frequency, and inferential statistics included Pearson correlation as well as simple and multiple regression analyses. The study results were presented in tables and graphs. The results showed that budget development processes had a significant and positive effect on financial accountability (B = 0.685, p < 0.001), budget implementation had a significant positive effect (B = 0.562, p < 0.001). Likewise, budget monitoring was significantly and positively related to financial accountability (B = 0.788, p < 0.001). Budget adjustments also had a significant favourable relation with financial accountability (B=0.591, P< 0.001). The study concluded that strengthening the budgeting practices has a tremendous impact on financial accountability in the county governments. The insights provide value for theory by generalizing the application of budgeting and accountability models into devolved government, as well as for practice, through delivering evidence-based policy. The study recommended that county governments should institutionalize regular budget estimation reviews, enforce procurement timelines, strengthen strategic planning, conduct ongoing audits, encourage and support public participation and improve capacity of the internal audit units and county assembly committees to adequately monitor budget implementation.