Influence of Management Accounting Practices on Performance of Kisumu County Government

Middle East Journal of Applied Science & Technology
Vol.4, Iss.2, Pages 129-146, April-June 2021
ISSN: 2582-0974 [129] www.mejast.com
Country: Kenya
Influence of Management Accounting Practices on Performance of Kisumu County Government
CPA Jared Okello Otieno1*
, Dr Orthodox Tefer2
& Erick Onyango Owino3
1-3
Turkana University, P.O Box: 69-30500, Lodwar, Kenya. Email:okellojared2@gmail.com1*
Copyright: ©2021 CPA Jared Okello Otieno et al. This is an open access article distributed under the terms of the Creative Commons Attribution License,
which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Article Received: 28 February 2021 Article Accepted: 31 May 2021 Article Published: 30 June 2021
1. Introduction
In implementing government policies and sound economic management, effective institutions and management
accounting systems play a critical role (Alsharari & Youssef, 2017). The keynote that links available resources,
service delivery and the achievement of government policy objectives is a good management accounting practice.
To maximize resource efficiency, to create the highest level of public finances transparency and accountability and
to secure long-term economic success, a strong management accounting method is needed (Kalifa et al., 2020;
Lebedev, 2019).
When performed correctly, management accounting practices ensure the efficient and sustainable use of revenue.
Administrative accounting is a lever for broader nation-building, efficient revenue increase and reliable and
transparent budget planning and execution, and building confidence of donors, investors and the entire citizenry
(Ammar, 2017). The recognition of developing countries to have a lasting transformative impact requires increased
international dependence on the accounting of the county.
Alzoubi, (2018) posits that management accounting is designed to provide information to institutions to help them
make better choices and enhance the efficiency of current operations. The providing information is based on
established accountability practices which cover employee activity within the company. The two-way connection
between senior managers and secondary managers is essential. Seniors are the way to communicate the objectives
of their company to subordinated and decentralized managers.
According to Rikhardsson & Yigitbasioglu, (2018) and Alzoubi, (2018), the system of management accounting is
the way to report to senior management level information on the performance and efficiency of the company.
ABSTRACT
The main aim of this study was to examine the Influence of Management Accounting Practices on Performance of Kisumu County Government. The
study aimed specifically to examine how the performance of Kisumu County Government is influenced by financial planning and budgeting and
internal control and public finances governance. One of the objects of a transfer is to bring economic resources closer to the people, and effective
public financial management practices are needed to make this felt by the people. The reviewed literature shows that limited studies are being
conducted on the same subject and therefore this study aims to fill the gap by contributing to the existing knowledge. In the past six years, Kenya has
experienced many challenges despite the improvement of the legislative and institutional frameworks for the management of public finances which
are not in line with the global expected standard practice and therefore lead to a poorer service delivery. This study also aims to strengthen policies
that streamline prudent public resource management. The study was based on participatory theory, contingency theory and institutional theory. The
study employed mixed research and a deliberate technique for sampling. The county's director and accountants from the treasury of Kisumu County
were among the respondents. In the case of primary data, a questionnaire was used to collect secondary data from the Budget Office, the Office of the
Auditor General and the County Treasury Office. In the study qualitative and quantitative data were used. While content analyzes were used for
qualitative data analysis, the Social Science Statistics Package Version 25 was used for quantitative data analyzing descriptive and inferential
statistics. The effect of management accounting practices on the Kisumu County Government's performance has been assessed by a multiple linear
regression analysis. The main finding was the importance of internal control practices involving monitoring, control environments, and internal
audits (F (1, 196) = 156,124).
Keywords: Public finance management practices, Financial Performance.

Cheruiyot, (2018) indicated that in Kenya's implementation of the county governance system as enshrined in the
2010 Constitution for Kenya (CoK). The CoK 2010 established additional new PFM institutions such as the
Revenue Allocation (CRA), Salary and Remuneration Commission (CRC) and the Office of the Budget Controller
(COB), along with 47 County Governments under fiscal responsibility, and extended the mandate of the Auditor
General (Dubat, 2020). The PFM Act 2012 further defined roles of public financial management for the National
Treasury and Parliament. Furthermore, there was a need to increase efficiency and efficiency in the use of scarce
public resources to meet the extended funding needs of both county governments.
Kenya's Government's Public Financial Management Reform (PFMR) still has Vision 2030, Kenya's 2010
Constitution and the PFM Act 2012 as its main themes (Cheruiyot, et al., 2018). These encompass macroeconomic
management and mobilizing of resources, strategic planning and allocation of resources, budget execution,
accounting and reporting, independent auditing and monitoring, fiscal decentering and intergovernmental fiscal
relations, legal and institutional framework, IFMIS and other PFM practice (Muiruri, 2018). Magani, (2018) notes
that PFMR 2013-2018 was implemented for approximately two and a half years by June 2015. A mid-term review
has been undertaken to assess the progress made in the implementation of the strategy, to identify emerging gaps
and challenges in reform and to identify measures to improve the final phase implementation. The review showed
that substantial progress was made with some of the reform interventions completed (13 of 69) and many (29) in
implementing the PFMR strategy well-targeted and likely to be completed by the end of the strategy. However,
many (around 27) areas in which the implementation of the reforms was slow to achieve the strategy's objectives by
the end of its implementation period. Like most countries in Africa and other parts of the world, the need for public
finances reform in Kenya was born from prior challenges and gaps that led to a misappropriation of government
funds, inequalities in the redistribution of resources at the national level, and centralized governance systems with
poor controls and balances (Cheruiyot, Namusonge & Sakwa, 2018).
The PFM in Kenya reforms were aimed at enhancing the efficiency, efficiency, participation and transparency of
public financial management, leading to better accounting and delivery of services. In Chapter 12 of Chapter 12 of
the Constitution of Kenya, the PFM Act 2012 seeks to improve public finance management. The Act repealed Law
no. 5 of 2004 on Public Financial Management. According to Osano & Ngugi, (2018) there is a momentum to
reform the PFM in Kenya to increase its effectiveness, efficiency, participation and transparency, thereby
improving responsibilities and providing better services.
Section 109-116 of the constitution outlines the County Treasury's responsibilities with respect to public funds.
According to Njahi, (2017), the County Revenue Fund must be set up by each county government. For each county,
County Treasury shall make sure to pay all money collected or received by, or received on behalf of, the County
Revenue Fund, with the exception of the amount outlined in Paragraph 2. (a-c).
The Act permits the Executive Committee of the County to set up emergency funds from the Country Government
consisting of money appropriated from time to time by the County Assembly through a law on appropriations
(Kiplangat, 2020). The purpose of an emergency fund is to allow payments to be made to a county in the absence of
a specific legislative authority when there is an urgent and unforeseen need for expenditure. Payments from

emergency funds shall be conferred on the County Executive Committee. As far as accountability is concerned, the
County Treasury has to provide the auditor general with a financial report on the use of the Emergency Fund.
Subsection 2(a) also outlines what the financial statement should include. In addition to the emergency funds, with
the approval of the CEC and the County Council and the designated individual to administer those public funds, the
County Executive Committee (CEC) is permitted to set up any other public fund.
Additionally, County treasuries' responsibilities include: establishing a county government banking system and its
entities, managing cash at county level, procurement of county governing bodies, keeping of county government
loan records, submitting county government debt management strategy (DMS) to the County Assembly and
providing the County Assembly with additional responsibilities (Section 119-124) (Muthama & Warui, 2021).
Sections 125-134 describe the county government budget process. The sections discuss the stages of the
Government of the County budget process, development plans and calculations of cash flow. The Member for
Finance is responsible for managing the budget process at county level and submitting budgetary estimates for the
approval of the County Executive Committee (Wanjiru, et al., 2017).
2. Statement of the Problem
In the last six years, the Kenya public financial management arena has faced countless problems that do not tackle
the principles of public finance, despite the strong legislative and institutional framework of PFM (Namai,
2020). For example, every annual Report of the Auditor General and Controller for the Budget since the begin of
the transferred systems of government in 2013 has shown that the PFM Act of 2012, PPAD Act of 2015 and other
principles in respect of tax liabilities are totally disregarded by certain transferred units. The reports note clearly, in
particular, that the County Governments annually allocate more than 15% of the national revenues and the Kshs
368 billion annually increases in FY 2018/2019 compared with Kshs 341 billion in FY 2017/2018 (Cheruiyot,
Namusonge & Sakwa, 2018). The lack of proper accounting systems and weak county controls have continued to
facilitate the misuse of the public funds allocated, slowing down services and the county governments' overall
performance (Lamaon, 2018).
While several past studies have shown that county governments should consider solid public management practices
including strong financial and budgetary planning, effective internal control, prudent procurement of government
finance, efficient revenue mobilization, and powerful government financial management to optimize performance
and efficiently deliver services. The aggregate revenue collected by county governments, for example, in fiscal
year 2016/17 stood at Kshs 32.52 billion, which represented 56.4% of Kshs 57.66 billion of local annual revenue
targets. This was 7.1% less than the Kshs.35.02 billion in FY 2015-16, which represents 69.3% of the annual
revenue target. This figure is now more than a year. It is therefore imperative to note the insufficient funds resulting
from this 18 low local revenue performance in certain important sectoral areas of the affected counties, thus the
need of this study is retarded or hindered.
Njahi (2017) while noting the internal control practices of Kenya county governments, have drawn a variety of
conclusions that internal control practices had resulted in full performance improvement in county governments. A
public procurement report in the counties of Kenya highlighting experiences from the provinces of Wajir,

Mombasa and Machakos in FY 2013/2014 shows that the counties have extensively breached the general
procurement laws of the law; that not only has the public resources hemorrhaged, but also poor performance and
service provision.
A number of studies on specific management accountability practices have been conducted in Kenya. The studies
examined the practices most commonly employed by organizations (Wango & Gatere, 2016; Minja, 2013). None
of these studies have examined why management accounting systems and why in the context of the government of
Kisumu County new or innovative practices have been adopted. This study aims to overcome this gap in
information. The following research questions arise from this background;
(1) What are the effect of financial planning and budgeting practices on the performance of Kisumu County
government in Kenya?
(2) What are the effects of internal control practices influence on the performance of county government in Kenya?
(3) What are the effects of public financial governance practices on the performance of Kisumu County
government in Kenya?
2.1. The Specific Objective
To establish the Influence of Management Accounting Practices on Performance of Kisumu County Government;
(1) To investigate the effect of financial planning and budgeting practices on the performance of Kisumu County
government.
(2) To examine the effect of internal control practices influence on the performance of Kisumu County
government.
(3) To investigate the effect of public financial governance practices on the performance of Kisumu County
government.
3. Literature Review
3.1. Theoretical Considerations
Adoption of management accounting is based on certain theories that attempt to explain why certain practices or
systems tend to be adopted by the institutions. The following theories were used for this study:
3.1.1. Theory of Participative Budgeting
The theory of participatory budgeting was used to consider financial planning and budgeting practices. Financial
planning is understood as the task of determining how an organization aims at its strategic objectives and goals.
Whereas private sector entities will develop a financial plan, public sector entities will develop budgets
immediately following the setting of the vision and the goals. Each of the activities, resources, facilities and
equipment necessary to achieve these targets, as also the timeframes are defined both in the financial and in the
budget plans. In the last two decades, participatory budgeting has been the most successful tool for participation
since 1990. Kenya was founded in 2010, after the new constitution had been promulgated. The government budget

is a document that presents revenues, expenditure and priorities proposed by the government for a fiscal year. The
budget shall be passed to the national or county assemblies, approved by the Chief Executive and presented by the
treasury. The participative budgeting theory is therefore used in the study to describe how a budget should be in a
relationship between the organization and the agency. As the agents and the legislators (county assembly and
parliament) function, the executive committee (at county level) and cabinet (national level) are the main members
of the public. The members of the general public are the participants. The quality of a budget depends heavily on
the composition of that budget.
3.1.2. Contingency Theory
The circumstances under which these practices are implemented or utilized must be taken into account in order to
design effective management accounting control systems. It must be noted that the best accounting practice or
system that can be used in all organizations is not universally acceptable. The applicability of practices depends on
the situational factors that organizations face, and this is the contingent management accounting theory approach.
Situational factors are contingent or contextual factors and/or variables. In the context of the literature, the external
environment in which organizations encounter a competitive strategy adopted by the organization, the structure of
organizations and the nature of production processes are considered and recognized.
The contingency theory explains why management accounting practices vary between companies operating in
different environments. Otley (1980) study on the management accounting contingency theory suggests that the
management accounting contingency theory is based on the premise that in all the circumstances there is no
universally appropriate or best accounting system. Instead, the contingency theory reveals that the particular
aspects of an accounting system are linked to the definite conditions in which the company works. Consequently,
the theory of contingency argues that the design and use of control systems depends on the environment and the
organization in which those controls operate and operate.
3.1.3. Institutional Theory
The concept of institutionalization is important when explaining management accounting practices. Oliver (1997)
has noted that institutional activities tend to be long-term, socially accepted, unchanging, and not directly reward or
permanence monitoring. Scapens (1994) asserts that management accounts can, with the passing of time, represent
a structure that reflects the way of thinking and acting of a particular organization which is taken for granted and is
not related to its historical conditions of particular importance.
It thus becomes an unmistakable way for an organization to do things. If it complies with socially accepted
standards, a special management accounting technique can be accepted. Institutional pressures within and outside
the organization may result in certain structures and procedures forcing individual institutions to adopt. In other
words, the regulator can enforce certain practices on the part of the professional bodies and the government. In
addition, DiMaggio and Powell (1983) argue that uncertainty about the environment in which the organization
operates may lead organizations to copy certain practices of organizations considered to be successful in their goals
or technological efficiency. The paper suggests that the institutional context within and outside organizations can
be seen as a place where a number of participants undertake strategies to inscribe others, including top executives in

the organization's specific representations. Such pressures may therefore lead to certain accounting management
practices to be followed by an organization.
3.1.4. Financial Planning and Budgeting Practices
White, 2009 states the planning process for a company's operational activities forms a budget process. The budget
is also defined by Burger and Woods (2008) as a financial or quantitative statement prepared before a specified
accountability period, containing the plans and policies to be implemented during this timeframe. A budget is a
financial plan that estimates the future operations and, to some degree, controls them. Budget reform requires
objectives that are both good and achievable in public policy.
Shah (2009) states that budgets are important tools for the financial management of large and multi-functioning
institutions to direct and control their affairs. They are not just used in governments that have their origins in
budgeting, but in other public bodies, industry, business, and private families. A budget is a key management tool.
It specifies, in view of the limited financial resources available to the organization, which activities and programs
should be actively pursued, emphasized or ignored in the period covered.
All good budgetary processes must reach three important goals: maintaining fiscal discipline, achieving efficiency
in allocation, and operational or technical efficiency. The main objective of budget reforms was the achievement of
fiscal discipline. Expansion of the budgetary role of the legislature is a new contemporary budgetary issue. With
legislative budgeting, both old appropriation processes and political relations with the government need to
accommodate new responsibilities. In addition, the new role of parliament in budgeting cannot be derived from
weaknesses of government. This budget is the final product of a long process in which treasuries and other agencies
monitor and control the public finances. Kung et al (2013); notes in their study that the relationship between budget
planning and the emphasis on management and the organization's performance is positive. Their research aimed to
examine the link between budgetary planning, budget focus and performance. The study utilized a Likert scale of
seven points to measure budget focus, budget planning and operational performance. Joshi et al. (2003) also
conducted a study to assess the relationship between corporate budget planning, monitoring and performance
assessment in Bahrain. The results of both studies showed that budget planning, budgetary emphasis and
management performance are in strong, positive relations.
3.1.5. Internal Control Practices
Internal control mechanisms are used at the highest management level and involve close examination of the total
efficiency, productivity and efficiency of management of the organization. Control includes mainly the way a
manager ensures that the work is conducted as originally planned. Bruyns et al. (1997) defines control as the
checking process to determine if the plans are followed or not. The author further mentions two kinds of control: a
control before the task is undertaken, a control after the task, and an ex facto control after the task is undertaken. He
further points out that it is relatively easy to use the budget for financial control: a comparison is made between the
actual amount of money spent and the amounts budgeted. The controls in place for the maintenance of spending
management are very important and can be used to determine the Budgetary Control process on the way to
achieving a desired objective linked to a certain result.

Internal control includes the structure, work and flows of authority, people and information systems for
management that are designed to enable the organization to achieve certain objectives. Corporate performance
includes an organization's actual output or results as measured by its intended outputs (or goals and objectives). It
implies an organization's ability to achieve its mission by means of sound management, strong governance and a
persistent redevelopment of results. Capacities, adaptable, customer-focused, entrepreneurial, outcome-oriented
and sustainable are effective non-profits. The secret to gaining competitive advantage in an unrestful world is to
create flexibly highly effective learning organizations. Performance measures may be either financial or not. Both
measures are used in a dynamic business environment for competitive companies).
According to Wanjara, in his analysis of internal controls/financial performance, he stated that, in terms of internal
control, the process is broadly defined, affected by a board, management and other staff of the entity, to guarantee
reasonable assurance as to the attainment of objectives of the next categories; efficiency and performance of the
operation; Internal control can assist a company in achieving its targets for performance and profitability and
prevent resources loss. It can contribute to ensuring reliable reporting. And it can help to ensure that the company
complies with legislation and regulations, preventing harm to its reputation and other consequences. In short, it can
help an entity to get where it is going and prevent crashes and surprises.
3.1.6. Public Financial Governance Practices
Adrian Cadbury, Chairman of the Financial Aspects Corporate Governance Committee in Great Britain in 1992,
developed and published the Cadbury Code, was the first person to express his interest in exploring the cause of the
financial shortcomings and conceptualized corporate governance. Cadbury's report defines corporate
administration as the system used to manage and control companies. On the other hand, in order to achieve
successful fulfillment of its responsibilities and added value, and efficient use of financial, human, material and
information resources while respecting the different approaches and defined management by Matei and Drumasu
(2015), an organization which is led and controlled (both public and private).
Three key areas are covered in the public sector corporate governance framework developed by the CIPFA: The
first key area: legal responsibility, public funds responsibility, communication with stakeholders, role and
responsibilities between the parties concerned (balance between power and authority, board, chair, non-executive
members of the board of directors, management) and the second key area: control and financial reported services.
Includes leadership/management, codes of conduct and management. It is the last area of the Corporate
Governance Framework (selflessness, objectivity, honesty). The effect of corporate governance on Kenyan
insurance company financial performance has been investigated by Ndung'u (2013). The study looked at the size of
the board, the number of subcommittees of the board of directors, the number of board meetings, the duality of
CEOs, the number of self-government managers, the company age and the size of the company with regard to their
asset value and how they influence insurance companies' financial performance in Kenya. Companies' performance
was measured using the asset return (ROA). The study found that there is a weak connection between studied
corporate governance and the financial performance of companies. The study recommends reducing the board's
size as much as possible as a large size significantly reduces financial performance.

Ochoi and Memba (2015) also investigated how corporate governance affect the financial performance of selected
public companies in Kenya between 1998 and 2004, when financial performance has been measured through
profitability. The study used purposeful sampling with 26 public firms listed in the exchange for securities in
Nairobi. The study showed that good corporate governance can improve the financial performance of companies if
applied to the organization. Aspects of management, audit committees and board of directors led the company to
better financial achievement. The members of the Board were another factor that could affect the financial
performance of the company's corporate governance (Ochoi and Memba 2015). The scientists recommended that
cooperation between boards and managers improves decision making and improves financial performance. The
management should become more committed to the organization through budget implementation, planning,
continuous leadership and professional collaboration between the management and the board.
4. Methodology
4.1.Research Design
This study used a mixed research design, i.e. correlation and description. Zikmund et al. (2013) observed that this
method is best suited when a researcher wants to describe the situation as it exists. In order to collect, sum up,
present and interpret the information for the purpose of clarifying, the researcher used a descriptive design. The
design is suitable for the study because it allows for description of dependent and independent variables: firstly, in
terms of financial and non-financial parameters the performance of the county government while secondly,
practices of public financial management in terms of financial planning and budgeting, internal control, public
finances procurement, revenue mobilization, public sector. The design of the correlation includes, on the other
hand, the collection of data to determine whether and to what extent there are two or more variables. The design
was thus appropriate since the study aimed at determining the impact on the financial performance of county
governments in Kenya of public financial management practices. The target population consisted of 196 county
officers comprising of 140 chief officers, 36 county accountants, 10 directors and 10 county treasuries managers.
County Assembly County Public Service Board Chief Officers Directors
The sampling structure for this research was taken from lists obtained from the Human Resource departments of the
respective county governments from the accounting officers and directors in county treasuries. Non-probability
samples have been used for this study. The unlikely sample method is used where each item in the population has
unknown opportunity or likelihood to be chosen. Non-probability sampling is a sample technique where samples
are collected in a way that does not provide equal opportunities for all people within the population to be selected.
This method offers partial estimates of measurable accuracy. This study used purposeful sampling to select its
sample, according to an unlikely method. This is because the county treasury accounting officers and managers
were deliberately sought. Proper sampling is an unprovable method of sampling and occurs when the selected
elements for the sample are selected by the researcher's judgment. Researchers often believe that a representative
sample can be obtained by a good judgment that saves time and money.
A purposeful sampling method may prove effective when, because of the nature of research design and the
objectives, only a limited number of people can serve as a source of primary information. Personal judgement

should be used for purposeful sampling to choose cases which help to answer questions of research or to achieve
research goals. Therefore, the survey carried out with a purposeful sampling of the entire target population of the
study. This resulted in the selection of all 130 accounting officers and 80 directors from the top ten counties.
The classification and sample selection is presented in table 1 below
Table 1: Sampling Procedure
Category Total number in category
County Assembly 46
County Public Service Board 80
Chief Officers 20
Directors 59
Total 205
4.2.Data Collection Procedures
Clark & Vealé, (2018) indicate that the data to be collected should be based on the study's goals. Therefore, primary
data from the county treasury officials were collected in this report while secondary data were collected from the
Office of Budget Controller reports. While the main focus of the study was the data obtained from primary sources
through an independently administered structured questionnaire, primary and secondary sources of data were
screened. Data for the study have been collected from a sample of 196 accounting officers from government
officials in Kisumu County by administering the questionnaires. In the process of data collection the study was
supported by three research assistants.
This method has been used by the study to ensure that all the details are taken to make sound judgments and
therefore advice. The researcher trained the research assistant on research ethics as well as on the topics in the
research instruments before deploying the research assistants in the field in order to clarify any questions the
research respondents might have asked. The researcher and the research assistants agreed on a monitoring schedule
to guide the progress of the research. In order to enable researchers to collect data on behalf of their researcher, they
received copies of the letter and of the cover letter from the university.
4.3.Pilot Study
Pilot tests are used to determine the accuracy and adequacy of the research design and device. The results of current
research were informed that they should remain as reliable and valid as possible. The study used the pilot study by
10 Kisumu County Treasury Officials, which was part of the population sampled. This accounted for 10% of the
target population accessible. Social scholars like Mugenda and Mugenda (2003) have generally supported this by
stating that 1 to 10% of actual sample size is sufficient for successful pilot study. The respondents participating in
the pilot testing of the research tools were exempt from participating in the principal investigation in order to
eliminate partiality in the research results based on previous knowledge of the contents of the research tool.

4.4. Reliability
The reliability of the research instruments is the consistency of the obtained values and has two aspects; stability
and equivalency (Taber, 2018). In fact, the reliability of the results obtained is generally a major concern for
research design and as such forms the firm foundation of the whole building of the research.
Good design is frequently characterized by flexible, adequate, efficient and economical adjectives. The design that
reduces bias and maximizes data reliability is considered a good design (Souza, Alexandre, & Guirardello, 2017).
These qualities informed the study so that the reliability of this research was tested. Cronbach's Alpha coefficient
was used to evaluate the reliability of the research tool.
This instrument measures the internal coherence of a group of items in a single scale. A Cronbach-alpha coefficient
of greater than 0.70 is reliable according to (Taber, 2018). The instrument should be revised prior to the main
research at an acceptable level if the Cronbach–alpha coefficient was less than 0.7. Table 2 shows a generally
accepted thumb rule for describing a research instrument's internal consistency.
Table 2: Internal Consistency
Cronbach’s Alpha Internal consistency
α ≥ 0.9 Excellent
0.9 > α ≥ 0.8 Good
0.8 > α ≥ 0.7 Acceptable
0.7 > α ≥ 0.6 Questionable
0.6 > α ≥ 0.5 Poor
0.5 > α Unacceptable
4.5.Validity
Validity of the content relates to the contents and the format of the instrument (Shrotryia & Dhanda, 2019). Validity
of the criterion relating to the value is the relationship between scores obtained by means of a tool and values
obtained using one or more instruments or measurements (Mohajan, 2017). In the current study, the content-related
method tested the validity of the research instruments. The fact that it was consistent with the study objectives and
the research paradigm informed this validity test method. The consulting of financial and statistics experts
informed the validity of research instruments.
5. Data Analysis and Presentation
5.1. Data Analysis
To evaluate the quantitative data, the investigator used descriptive analysis, correlation analysis and regression
analysis while analyzing qualitative data using content analysis. In the descriptive analysis Sije (2017), the
numerical summaries are found to give a more thorough insight on the characteristics and description of the

variables studied. Correlation analysis used to determine whether two or more quantifiable variables exist, with a
correlation coefficient expressing magnitude and direction (Queirós, Faria & Almeida, 2017).
The analysis involved using collected data. A linear regression analysis includes the linear association of a
dependent variable with an independent variable (s). The dependent variable is supposed to be linked predicatively
to the independent variable (s). Therefore, regression analysis tries to predict continuous interval or scaled
dependent variable values from the specific independent variable values (s).
5.2. Research Models
Following the completion of the conditional diagnostic test, regression analysis was been carried out to determine
whether separate variables have foreseen the variable depending on the research model. SPSS generated R-square,
t-tests and F-tests (ANOVA) tests to test the significant relations between the variables in the study, and the degree
to which the variation in the adjusted variable were explained in the predictor variables. The research hypotheses
were tested on the basis of SPSS linear regression analysis result using the p value approach at 95% confidence
level. The rules of decision were that the p-value should be rejected in the case of a value below the mean level
(0.05). The p-value calculated was not rejected if that value exceeded the meaning level (.05). (0.05). In F testing
and p value approaches the significance of the independent variables was tested. The decision rules were to refuse
the null hypothesis that if the F value computed exceeds the critical F value, or the P value is less critical, of 0.05 the
effect from independent variables was insignificant.
Y = β0 + β1X1 + β2X2 + β3X3 + ε
Where: Y = employees’ performance
β0 = Constant Term;
β1, β2, β3, & β4 = Beta coefficients;
X1= Financial Planning and Budgeting Practices
X2= Internal Control Practices
X3= Public Financial Governance Practices
X4= Performance of County Government
ε = Error term assumed normal and, independent and identically distributed
6. Results and Discussion
6.1.Effect of financial planning and budgeting practices on performance of county governments in Kenya
The first specific objective investigated the effect on the performance of Kisumu county government financial
planning and budgeting (FPBP). Financial Planning and Budgeting Practices entail evaluating the government's
current financial situation, analyzing future growth prospects and options, evaluating development options to
achieve the stated growth objectives, estimating funds requirements and considering alternative financing options,
and comparing actual performance to planned performance.

Budget and budgetary practices, financial forecasting practices, and financing decision practices are all part of the
Financial Planning and Budgeting Practices (Table 3).
As a result, budgeting enables a county government's treasury to plan, make sound decisions, and decide on a
county government's mission and direction. The study discovered, however, that while Kisumu County
Government uses the County Integrated Development Plan as its primary planning document for all projects and
programs, timely disbursement and resource allocation have always been the primary means of implementing
them.
Table 3. Financial Planning and
Budgeting Practices
Item Frequency Percentage
Evaluating the government's current financial situation 55 28.50
Analyzing future growth prospects and options 11 5.70
Evaluating development options to achieve the stated growth objectives 14 7.25
Estimating funds requirements and considering alternative financing options 24 12.44
Comparing actual performance to planned performance. 40 20.73
Budget and budgetary practices 28 14.51
Financial forecasting practices 14 7.25
Financing decision practices 10 5.18
Total 196 100.00
It was assumed from this objective that FPBP had no significant impact on the execution of governments in the
Kisumu County. Nonetheless, there was a positive statistical relationship of the two variables to FPBP, which
showed that 13.4 percent of the county government's performance was not related to the model and 86.6 percent
was left out (Table 4). Financial planning provides important instruments which help County Governments to
identify their current situations and plan their future.
Table 4. Financial Planning and Budgeting Practices on Performance of
Kisumu County Government
Model R
R
Square
Adjusted R
Square
Std. Error of the Estimate
1 .367a .134 .132 .4562
a. Predictors: (Constant), Financial Planning and Budgeting Practiced (FPBP)

Table 5. Financial Planning and Budgeting Practiced (FPBP) on performance
of Kisumu County government ANOVA
Model
Sum of
Squares
Df
Mean
Square
F Sig.
Regression 1.298 1 .232 .312 .000b
Residual 29.321 195 .323
Total 30.619 196
a. Dependent Variable: Performance
b. Predictors: (Constant), Financial Planning and Budgeting Practiced (FPBP)
6.2.Effect of Internal Control Practices on Performance of County Governments in Kenya
The second specific goal was to investigate how internal control practices (ICP) affect the performance of Kisumu
county government. The main objective is to improve the reliability of performance, either directly or indirectly
through internally control practices such as control activities, control environment and internal audits by increasing
accountability among information providers within an organization. As a result, an effective internal control for any
county government is unmistakably connected with the success of the county government in achieving its revenue
target. These will include the on-going assessment of financial monitoring and evaluating systems, assessing
operational information's reliability and integrity, review of asset-protection inspections, assessment of employees'
compliance with government policies and practices, and assessment of the efficiency and effectiveness with which
county governments achieve their targets as well as automating revenue process. The results are presented as shown
in table 6 below.
Table 6. Internal Control Practices
On-going assessment of financial monitoring and evaluating
systems
45 22.96
Assessing operational information's reliability and integrity 19 9.69
Review of asset-protection inspections 96 48.98
Assessment of employees' compliance with government policies
and practices
44 22.45
Assessment of the efficiency and effectiveness with which county
governments achieve their targets.
40 40.41
Automated revenue process 22 11.22
Total 196 100.00

Despite the study's hypothesis that ICP has no significant influence on county government performance in Kenya,
the findings revealed a positive statistically significant relationship between the two variables, with ICP explaining
32.8 percent of county government performance in Kenya, leaving the difference of 67.2 percent explained by other
factors outside the study as shown in table 7 below.
Table 7. Internal Control Practices on Performance of
Kisumu County government
Model R
R
Square
Adjusted R
Square
1 .573a .328 .327 .40026
a. Predictors: (Constant), Internal Control Practices
Table 8. Internal Control Practices on performance of
Kisumu County government ANOVA
Model
Sum of
Squares
Df Mean Square F Sig.
Regression 21.298 1 29.914 186.312 .000b
Residual 59.321 195 .160
Total 60.619 196
b. Predictors: (Constant), Internal Control Practices
6.3.Effect of Public financial governance practices on performance of county governments in Kenya
The third specific objective was to explore how PFGP influences the performance of county administrations in
Kisumu. The goal of corporate public authorities is to satisfy the needs of citizens and public benefit through the
provision of public services. Consequently, the model of private sector corporate governance does not differ greatly
from the practice of public fiscal governance. In the same manner that private sector corporate governance in the
early 1990s sought to improve corporate governance and increased responsibility and transparency for the recovery
of shareholder trust, corporate governance of public authorities sought to develop and improve the management
and controls, and to assume and discharge responsibilities of public figures.
Table 9. Public Finance Governance Practices
Good PFGP satisfy the needs of citizens 35 17.86
Good PFGP promote benefit through the provision of public services 37 18.88

PFGP improves corporate governance 68 34.69
PFGP increases responsibility and transparency for the recovery of
shareholder trust
24 12.24
PFGP develops and improve the management and controls 20 10.20
PFGP assumes and discharges responsibilities of public figures 12 6.12
Total 196 100.00
The findings indicate a positive statistically significant relationship between the two variable(s). Findings indicated
that PFGP had no significant impact on Kisumu County Government's performance. This explains that there is a
30.3% increase in Kenya, leaving the 69.7% difference described by other factors outside the scope of the study as
is indicated in table 10.
Table 10. Public Finance Governance Practices on Performance of
Kisumu County government
Model R
R
Square
Adjusted R
Square
1 .550a .303 .299 .36722
a. Predictors: (Constant), Public Finance Governance Practices
Table 11. Public Finance Governance Practices on performance of
Kisumu County government ANOVA
Model
Sum of
Squares
Df Mean Square F Sig.
Regression 29.298 1 27.914 109.312 .000b
Residual 48.321 195 .160
Total 77.619 196
b. Predictors: (Constant), Public Finance Governance Practices
7. Conclusions and Recommendations
In this paper, literature, opinion and the redefinition of public financial performance in Kenya were considered
extensively. Ensuring comprehensive and effective public resource management reforms, efficient financial

planning and budgeting practices and practices for internal control, and public financial governance. Devolution
needs to be sensitized by other partners. A lot of resources will be transferred; it is important that the public can
monitor what happens. Citizens should be provided with a platform for exercising their rights and monitoring
project implementation. This should be done at the community level through civic education and awareness.
8. Suggestions for further research
While in Kenya there are financial and non-financial performance measures incorporated by county governments,
there can be other economic and non-financial measurements that measure performance, but not included in this
study. A further study is therefore necessary to take account of the performance of county governments' other
financial and non-financial aspects. In addition, some practices may have an effect on the performance of county
governments not included in this study. Further research is therefore necessary to examine other practices in Kenya
that affect the performance of county governments.
Declarations
Source of Funding
This research did not receive any grant from funding agencies in the public, commercial, or not-for-profit sectors.
Competing Interests Statement
The authors declare no competing financial, professional and personal interests.
Consent for publication
We declare that we consented for the publication of this research work.
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