Financial management practices and financial performance of technical and vocational education and training institutions in Kenya

Abstract

This study examined the relationship between financial management practices and the financial performance of technical and vocational education and training institutions in Kenya. The TVET sector plays a key role in equipping learners with the technical, vocational, and entrepreneurial skills necessary to support Kenya’s socio-economic transformation and the realization of Vision 2030. Despite increased government funding, many public TVET institutions continue to face significant financial and sustainability challenges due to weak fiscal oversight and resource mismanagement. This study aimed at examining the influence of financial planning, budgeting, internal controls, financial reporting and evaluated the moderating role of governance on the financial performance of these institutions. A descriptive, mixed-method research design was used to collect data from principals and finance officers across the 42 sampled public TVET institutions. Descriptive and regression analyses showed that financial reporting had the strongest positive effect on financial performance, followed by internal controls, financial planning, and budgeting. The results also indicated that effective governance significantly enhanced the relationship between these financial practices and overall institutional performance. The study concluded that effective financial management practices while reinforced by good governance practices are essential for accountability, transparency, and sustainability in TVET institutions. The study recommends continuous capacity building for principals and finance officers, participatory budgeting and automation of financial systems to strengthen institutional performance. These measures are critical to strengthening institutional performance and ensuring that public resources are utilized efficiently to meet the nation's human capital development goals.