EFFECT OF DIGITAL FINANCIAL MANAGEMENT SYSTEM ON ACCOUNTABILITY OF PUBLIC SECONDARY SCHOOLS IN BUNGOMA COUNTY, KENYA

Abstract

The introduction of digital financial management systems (DFMS) in the education sector has sparked interest in its potential to improve financial accountability in public institutions. The study explored the effect of DFMS on accountability in public secondary schools in Bungoma County, Kenya, with a focus on enhancing transparency, efficiency, and financial integrity. As public secondary schools in Kenya depend largely on government funds and community contributions, there was a pressing need for effective financial oversight to ensure that these resources were used responsibly to meet educational objectives. However, many schools in Bungoma County faced challenges in financial management, often leading to inefficiencies, delays in reporting, and limited trust among stakeholders. The purpose of this study was to investigate the effect of digital financial management systems on accountability of public secondary schools in Bungoma County. Specific objectives were to establish the effect of automated school fee collection, online payment system and use of computerized database financial management on accountability. Through a mixed-methods approach, this study examined both the quantitative and qualitative effects of DFMS on accountability in school financial management. Quantitative data was drawn from financial records, audits, and system usage reports, while qualitative insights were gathered from interviews through the school principals. 482 respondents were the target population distributed in the 45 wards Bungoma County, Kenya. 218 respondents were the selected sample size. Stratified and simple random sampling was employed. The results indicated that DFMS improved the accuracy and timeliness of financial reporting, facilitating real-time data tracking and enhancing transparency in budget allocation and expenditure. Furthermore, DFMS implementation had led to better compliance with regulatory requirements, as digital systems enabled thorough documentation and easier access to financial information for auditing purposes. However, the study also revealed barriers to the effective adoption of DFMS, including inadequate ICT infrastructure, limited digital literacy among school staff, and resistance to changes in traditional financial management practices. The study highlighted that while DFMS had significant potential to improve accountability, these systems required proper support, training and infrastructure investment to function optimally. In conclusion, DFMS is an effective tool in promoting accountability. Its potential to improve transparency, minimize financial mismanagement, and build trust among stakeholders makes it a valuable asset. Recommendations for successful implementation included government investment in digital infrastructure, comprehensive training for school finance personnel, and continuous system updates to adapt to evolving financial management needs. By addressing these areas, DFMS could significantly enhance the accountability framework within Kenya’s education sector, fostering better financial stewardship and ultimately, improved educational outcomes.