Institutional governance and financial sustainability of water resources authority basin areas in Kenya

Abstract

Public sector’s financial sustainability is crucial for ensuring that government institutions can meet current and future obligations without jeopardizing their ability to provide essential public services. Notwithstanding the fundamental significance of financial sustainability, the Water Resources Authority basin areas highlight an ongoing deficiency in this regard. A primary challenge for WRA basin areas in Kenya financial sustainability is not limited to inconsistent funding. Although empirical literature consistently underscored institutional governance as one of the most critical strategies for driving financial sustainability, positioning it at the core of organizational success and long-term viability, most of these studies had contextual gaps, conceptual gaps and methodological gaps. This study sought to assess institutional governance as it related to financial sustainability in the institution. The specific objectives were to find out the effect of accountability, transparency, stakeholder participation, and decentralization on the financial sustainability of WRA basin areas in Kenya. The theories that anchored the study were the Institutional Theory, Stakeholder Theory, and the Priority Theory of Sustainable Finance. In the research, a descriptive research design was adopted, targeting the six Water Resources Authority basin areas in Kenya. The study used a census approach with a sample size of 160 respondents, from whom primary data was gathered through a carefully crafted questionnaire, administered using a drop-and-pick approach. Secondary data was collected using a research designed data collection tool. The questionnaire was tested for validity through content validity testing, and for reliability using Cronbach’s alpha. Quantitative data was analyzed to yield descriptive statistics. Partial Least Squares Structural Equation Modelling was used to construct and validate a conceptual model focused on assessing the financial sustainability of WRA basin areas in Kenya. The study concluded that each of; accountability (β=0.2377; p<0.01), transparency (β=0.2677; p= 0.004), stakeholder participation (β=0.1567; p=0.002) and decentralization ((β=0.5114, p<0.01), has significant and positive effect on financial sustainability of WRA basin areas in Kenya. The study recommends that WRA basin areas in Kenya should strengthen accountability and improve transparency mechanisms and communication so as to build greater stakeholder trust and clarity. They should improve stakeholder participation by fostering inclusiveness, trust, and better-informed decision-making. They should review internal governance and empower lower-level sub basins to make them more meaningfully so as to enhance operational flexibility.