Public financial management practices and budget Absorption among the county governments of Kenya

Abstract

The rise of the public sector has concentrated primarily on public finances, neglecting the significance of public engagement in successful fiscal management methods. For example, it has been determined that the Kenyan county governments exhibit poor performance, as indicated by a low absorption of the recurring and development budgets, estimated at 39.8% and 26.1% correspondingly, against an anticipated absorbing rate of 50.0%. Therefore, this research seeks to examine the effect of public financial management practices on budget absorption among the county governments of Kenya. The specific objectives were to establish the effect of budget planning, revenue management practice, procurement processes and asset management practice on budget absorption. The study adopted descriptive research design. The population of study comprised of 47 county governments in Kenya. The unit of analysis was counties and unit of observation was 1 representative from finance department from the County Government and 1 representative from budget office from the County Assembly in each of the 47 county governments. Sampling design was purposive sampling giving sample population of 94 respondents. The data collection instrument was questionnaire. Questionnaires were validated under content, face validity and structure. Reliability tests were subjected to Alpha Coefficient with threshold value of 0.7. The data was evaluated using descriptive statistics to determine frequencies, mean, and standard deviation. Finally, employ inferential analytic techniques, such as regression and correlation analysis, to determine relationship between variables. The presentation utilized tables. From the findings, the study established that there was a strong positive linear relationship between budget planning and budget absorption among the county governments with level of significance (r=0. 960), a statistically significant and positive linear association between revenue management practice on budget absorption among the county governments was (r=0.982), there was a strong positive linear relationship between procurement processes and the budget absorption among the county governments (r=0.855). Lastly, the findings indicated a moderate positive linear relationship between the asset management practice and the budget absorption among the county governments (r=0.947). In conclusion, budget absorption among the county governments of Kenya was influenced by public financial management practices that play a central role in the planning, allocation, and utilization of public funds. Weaknesses in PFM systems such as delayed budget approvals, poor expenditure controls, and inadequate financial reporting have led to inefficiencies in the execution of planned activities. The study recommends that financial management officers in county governments in Kenya should enhance capacity building for planning and finance officers through regular training on budget formulation and forecasting techniques. To overcome constraint on revenue management practices, county governments should invest in automating revenue collection systems to enhance efficiency, accuracy, and accountability. The study recommends that management in the county governments should streamline procurement processes by adopting digital procurement systems to improve speed, transparency, and accountability. Lastly, county governments should establish and enforce clear asset management policies and frameworks that guide acquisition, maintenance, and disposal of assets. Developing and regularly updating digital asset registers can improve visibility and planning for asset use.