Factors Affecting Effectiveness Of Budgets Of Non-governmental Organizations In Nairobi County

Abstract

Non-Governmental Organizations (NGOs) are behaving in unaccountable manner as regards their utilization of the fund budgeted by them owing to ineffectiveness of the NGO budgets. In fact, NGOs do not provide sufficient evidence on the use of the fund budgeted and allocated to them. In Nairobi County, NGO budget is so ineffective that it is not clear whether the budgeted funds are used for allocated purposes in the county. While the budgeted funds by the NGO in Nairobi County are not used for intended purposes, the projects do not benefit the local community as expected. The outcome is stalled project (failure of the project completion), projects failing to take off as proposed, budgeting for non-existent projects. The failure to use the fund as intended leads to projects not being started, uncompleted projects, doing shoddy jobs and/or stalled projects. Theories have shown that effectiveness of NGO budgeting may be influenced by; proficiency of the budgeting officers, level of involvement of concerned parties, budget preparation, and budget Execution. This situation motivated the need for the present study to be conducted so to fill this knowledge gap. This research used the descriptive research design. The target population was the budgeting finance officer of 200 NGOs that are registered and operational within Nairobi County, Kenya. A sample size of 20% (i.e. 40 respondents) of the target population was obtained using stratified proportionate sampling, as well as systematic random sampling using a controlled questionnaire. This was analyzed using descriptive statistics as well inferential statistics. The study was aided by statistical package for social sciences (SPSS) to analyze the data. The study recommends that NGOs should; review their policies on budget staff recruitment, selection and retention, with co-operation of the NGO board should review or come up with policies on participatory budgeting, ensure that budget preparation is thorough and ensure that their budgets are carefully executed and budgets should be directed by set policies and procedures. The present study recommends further studies to establish what influences spending of NGO funds. The present study found that although NGOs were mainly ensuring that funds were spent according to budget allocation, budget was rarely complied with in most NGO projects. This draw questions whether the funds are used for the intended purpose. Effectiveness of NGO budget is explained by budget staff proficiency (p-value = 0.018), budget participation (p-value = 0.000), budget preparation (p-value = 0.046), and budget execution (p- value = 0.001).