Effect Of Financial Performance On Treasury Funding Of Public Institutions In Kenya

Abstract

Recent studies have observed that government institutions are burdened with financial management risks that comprise the acquisition, allocation and investment of funds in the various budgetary considerations. This study will be to examine the effects of financial performance of public institutions on treasury funding. The study will used correlation design. The study was based on secondary data that was obtained from the annual financial reports on the 12 public institutions under study. The target population was all the fully owned public companies by the government. There were 81 fully owned entities by the government. A sample of 12 public entities was considered for this study. Secondary data was gathered from the financial reports of the institutions over the ten-year period, Year 2004 to Year 2013.We considered these methods because it was the most economical way of data collection compared to others. Panel data analysis was used for analysis since it involves the funding and financial performance of the twelve institutions over the ten-year period. Regression and Correlation analysis was used to establish the relationship between the government funding and financial performance of public institutions. Results of the study revealed a positive insignificant relationship with treasury funding. There was a positive significant relationship between liquidity and treasury funding while leverage had a negative and significant relationship with treasury funding. There is need to improve financial planning and forecasting to increase liquidity levels in public institutions.