Factors Affecting Financial Liquidity Of Public Technical Training Institutes In Nairobi County, Kenya

Abstract

Technical institutions are burdened with financial management risks at various levels of decision making, resource allocation, and utilization which create corruption opportunities and in turn compromise the quality of education. There is need for educational investment to be well handled to ensure maximum production from it and that the little funds available are well expended to ensure careful financial planning, control and administration, specifically in the area of financial liquidity (Reeder, 1998). The study sought to investigate the factors affecting financial liquidity of technical training institutions in Kenya. The research assessed how Management competence, Control activities, and Government financial support affect financial liquidity of Technical institutions. The study was based on the basis that technical institutions education is burdened with financial management risk that compromise the qualities of education. There are significant risks at the various levels of decision making, resource allocation and allocation in technical institutions. This call for investigation on what factors affects technical institutions finance management so that technical institutions remain financially stable by maintaining acceptable liquidity level in the face of strong competitive environment. Thus there was need for the study to be carried on the financial liquidity of technical institutions. The study intended to fill the literature gap. Specifically the study determined the factors affecting financial liquidity of technical institutions in Nairobi County, Kenya. The study was carried out in all the 12 Public Technical Training institutions in Nairobi County. A census survey was used. The design was chosen because the entire population was sufficiently small with a similar socioeconomic and geographical setting; data was gathered on employee of the population. The responsive population of the study was 72 within the Principals, Finance officers, and Accountants of the 12 public technical institutions in Nairobi County. Factor Analysis and Descriptive statistics were used in the analysis of the data, with the help Statistical Package for Social Sciences (SPSS). For purposes of interpretation, the Rotated Component Matrix of the Variables was used. Multiple regression model was used in estimation of the model so as to determine influence of independent variables (Management competence, control activities, government financial support) on the financial liquidity. The study found out that management competence, control activities, and government financial support affect financial liquidity of public technical institutions in Nairobi County, Kenya, with notable degree of influence. The results of the research shows that control activities is very significant factor influencing financial liquidity of technical institution. Management competence and government financial support influence financial liquidity positively with insignificant degree of influence. The study recommends that technical institutions in Kenya should enhance the control activities by adopting more stringent policies and procedures and continuous staff training. The study further recommends that government should enhance the implementation of government financial support activities, and that technical institutions should develop strategies of improving the management competence for proper management of financial liquidity.