Factors Influencing Absorption Of Budgeted Funds In The Kenyan Public Sector

Abstract

The problems that have inhibited the absorption of budgeted funds in the Kenyan ministries are largely common and have been identified as excessive controls, array of directors, recurrent political meddling, meagre management and absolute mismanagement. The main objective of this study was to analyse factors influencing absorption of budgeted funds in the Kenyan ministries. Specific objectives were to establish the influence of budgeting and planning processes influencing the absorption of budgeted funds, to establish the effect of the ministries staff capacity on the absorption of budgeted funds, to establish the influence of private sector capacity on absorption of budgeted funds and to establish the influence of donor funding on absorption of budgeted funds. For the purpose of this study, the target population was the 21 government ministries which are funded. Purposive sampling was used to arrive at the sample size. The sample was selected for ministries which had published their relevant information is readily available and those who finance their projects. A sample size of 21 ministries will be used as ranked on the performance contract scores published annually. Secondary data collection method will be used in this study. The secondary data was collected from printed estimates; corporations published statements Treasury and Division of Performance Contracting and the Ministry of Devolution and Planning. The data collected was analysed using descriptive statistics and inferential statistics. The study was conducted using several test of significance. A t-test was conducted at 95% certainty level (α ≤ .05). From the analysis of findings, strong and positive linear association was established between the independent variables (Budgeting process, staff capacity, private sector capacity, donor funding) and absorption of budgeted funds. An R-square value of 0.727 was established depicting that this relationship was very strong and the budgeting process, staff capacity, private sector capacity and donor funding accounted for 72.7% of the changes in the dependent variable i.e absorption of budgeted funds. The study recommended that the Government of Kenya should design effective policy for establishing better source of financing their development and recurrent expenditure.