Financial Factors Influencing Budget Implementation in Counties (A Survey of Selected Counties in Kenya)

Mwai S Mathenge, Paul Mbiti Shavulimo, Michael Kiama


A public budget is a forecast of government expenditures and revenues for the ensuing fiscal year and also reflects the policy of the government towards the economy. A budget is so fundamental that it is describe as the single most important document of the government in any fiscal year. This is because, budget management enforces fiscal discipline, fosters macroeconomic stability, improves the portfolio of programmes by rewarding effective and efficient programmes as well as builds a culture of performance and accountability within the government and its spending units. The main objective of these study was to investigate the financial factors affecting budget implementation in Counties in Kenya with an emphasis on the selected counties i.e. Kirinyanga, Muranga, Nyeri and Nyandarua. This was to help determine how budgets are implemented in Kenya Counties and give recommendations based on findings of the study. The study involved a literature review which included a review of budget implementation, theoretical review, an empirical literature in relation to the previous studies related to the research and review of the research gap to be filled. The study also looked into the evolution of budget process from historical to line budgeting and now to the programme based budgets with timelines sets in the New Public Financial Management Act of 2012. The study adopt a descriptive research design which involve a survey of the selected County Government. The target population was 250 employees spread across the entire departments, among others the Clerk to County Assembly, Executive Committee Members and Chief Officers who are accounting officers in various departments and relevant officers who are involved in budget preparation or executions. Where a sample size of 72 respondents was selected. Primary data was collected from the sampled population using questionnaires distributed to the respondents. The data provided information that formed the basis for discussion and interpretation of the result. The data from the study was analysed using both quantitative and qualitative techniques. The findings was presented using tables for ease of interpretation and to enhance clarity and precision. Analysis was done using Statistical Packages for Social Scientists (SPSS) version 24. The data from the study was analysed using inferential statistics, calculations and correlation analysis where these measures was compared with the existing literature to arrive at the conclusion of the study. The hypothesis was tested using T-test to obtain the P-values and ANOVA at 95% significance and to obtain the relation between absorption rate and the tested variables, i.e. monitoring, government financial regulation, adequacy of finance and organizational financial policies.  The expected outcome was used to identify which factors usually influence budget implementation in Counties. The main theories covered are agency theory in relation to good governance, stewardship in relation to public participation in budget implementation and capital adequacy, the study found that monitoring, availability of financial resources and financial policies and government financial regulation affect budget implementation to a greater extent.

Keywords: budget implementation/ execution, absorption rate, supplementary budget, financial regulation.

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