Corporate Governance Principles And Financial Management Of National Government Constituency Development Fund In Nyanza Region, Kenya

Abstract

The main objective of the research was to determine the influence of corporate governance principles on financial management of NG-CDF in Nyanza Region, Kenya. The study’s specific objectives were; to establish the influence of the principle of accountability on the financial management of NG-CDF in NG-CDF in Nyanza Region, Kenya, to determine the influence of the principle of transparency on the financial management of NG-CDF in Nyanza Region, Kenya, to establish the influence of the principle of fairness on the financial management of NG-CDF in Nyanza Region, Kenya, to determine the influence of the principle of integrity on the financial management of NG-CDF in Nyanza Region, Kenya. Descriptive research design was adopted for the study. The total population of the study was 420 respondents from all the 42 constituencies across Nyanza Region, Kenya represented by 42 fund managers and 378 NG-CDF committee members. Proportional sampling, developed by Taro Yamane, was used to calculate the study's sample size of 205. The study used questionnaire as data collection tool for primary data. The test for normality was done using Q-Q normal plots as generated by use of SPSS version 26 and the data used were normally distributed. There was no multicollinearity between independent variables used as the Variance Inflation Factor (VIF) of the variables fell between 1.564 and 1.683. The study concluded that the four corporate governance principles account for up to 77.8% significant variance in financial management (R square =.778, P=0.000). There was linear relationship between independent variables and dependent variable as tested by the Pearson Correlation Analysis. The corporate governance principles had correlation coefficients as follows: Accountability (r=0.757, p=0.000), Transparency (r= 0.702, P=0.000), Fairness (r= 0.618, P=0.000) and Integrity (r= 0.587, P=0.000). The study therefore recommended that for public resources to be efficiently managed, the four corporate governance principles which are accountability, transparency, integrity and fairness guidelines should be adhered to. The also recommended that policy makers should put in place enabling policies and procedures to help put in place a board that is independent, accountable, well structures and committed in regards to Chapter VI of the Constitution of Kenya 2010 on integrity and leadership.