Influence of Public Financial Management Reforms on Budget Implementation by Kenyan City Counties
International Journal of Law and Society
Volume 1, Issue 2, June 2018, Pages: 46-63
Received: Oct. 29, 2017; Accepted: Dec. 6, 2017; Published: Jan. 15, 2018
Views 2120      Downloads 254
Geofrey Abwao Magani, Department of Commerce and Economic Studies, Jomo Kenyatta University of Agriculture and Technology, Juja, Kenya
Joseph Mwangi Gichure, Department of Commerce and Economic Studies, Jomo Kenyatta University of Agriculture and Technology, Juja, Kenya
Article Tools
Follow on us
The pursuit of Public Financial Management Reforms (PFMR) is centered on, among other functions, enhancing transparency in governance, increasing prudential allocation of financial capital, accountability in financial management, separating policy and management functions. The PFMRs seek to address gaps identified in the devolved systems of government and public organizations to remedy inadequate strategy orientation and lapsed strategy as well as to build on institutional transformation. In Kenya, the PFMRs seek to ensure fiscal efficiency and discipline in the use of public finances by enhancing public service efficiency and safeguarding available resources to be used in the best interest of the people. This study sought to examine the influence public financial management reforms on budget implementation by Kenyan city counties. The PFMRs studies included IFMIS Re-Engineering and fiscal decentralization. The study was based on modern portfolio theory, resource-based theory and stakeholder theory and relied on an expost-facto descriptive research design with a survey method to determine the relationships between the study variables. Structured questionnaires, data collection sheets and interview schedules were used to collect data which was then cleaned, coded and scrutinized thoroughly for completeness. The study relied on primary data collected from the treasuries, directorates of economic planning, budget offices, IFMIS departments and sectoral departments of Nairobi city county, Mombasa city county and Kisumu city county respectively. Secondary data was obtained from the annual county governmets’ budget implementation reports. The data was analyzed using SPSS version 24. Statistical measures such as means, percentages and standard deviation were used to interpret the data. The researcher also performed both a linear regression analysis and a Spearman correlation analysis to show the relationships between the study variables. The study revealed strong positive and statistically significant correlation between fiscal decentralization and budget implementation while IFMIS re-engineering had a negative and statistically insignificant correlation with budget execution. The results of the study were considered pivotal to the national government, the legislature, national treasury, county governments and respective sectoral departments, the Commission for Revenue Allocation, the office of the controller of budget, the public, budget implementation oversight agencies and county chiefs as it highlights important correlates of effective budget execution.
IFMIS Re-Engineering, Fiscal Decentralization, Budget Implementation, Public Financial Management Reforms
To cite this article
Geofrey Abwao Magani, Joseph Mwangi Gichure, Influence of Public Financial Management Reforms on Budget Implementation by Kenyan City Counties, International Journal of Law and Society. Vol. 1, No. 2, 2018, pp. 46-63. doi: 10.11648/j.ijls.20180102.11
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Ahmad, A., & Ahmad, B. (2014). Obstacles of Preparing and Implementing the Budgets in Jordan. Interdisciplinary Journal of Contemporary Research in Business, 6 (2), 104-113.
Aiginger, K., Cramme, O., Ederer, S., Liddle, R., & Thillaye, R. (2012). Reconciling the Short and Long Run Governance Reforms to Solve the Crisis and Beyond. European Policy Brief, 1-13.
Aminatu, M. (2015). The Impact of Integrated Financial Management System on Economic Development: The Case of Ghana. Korea Review of International Studies, pp. 61-80.
Andrews, M. (2010). How Far Have Public Financial Management Reforms Come in Africa. Harvard Kennedy School Working Paper Series, 1-72.
Bagaka, O. (2008). Fiscal Decentralization in Kenya: The Constituency Development Fund and the Growth of Government. 20th Annual Conference of the Association for Budgeting and Financial Management, October, 23-28, Chicago, pp. 1-40.
Boetti, L., Piacenza, M., & Turati, G. (2010). Decentralization and Local Governments' Performance: How Does Fiscal Autonomy Affect Spending Efficiency. Department of Economics and Public Finance "G. PRATO" Working Paper Series. Alma Universita Tauriensis, 1-37.
Borland, J. (2001). Microeconomic Reforms in Australia-An Introduction. University of Melbourne, 1-11.
Bosire, K. K. (2016). The Impact of Integrated Financial Management Information System on Financial Probity in The Public Sector in Kenya. Research Project, pp. 1-42.
Bovaird, T., & Loffler, E. (2009). Public Management and Governance. London: Routledge.
Brunson, T. (2017). Public Financial Management Reform. Ministry of Finance and Development Planning, Republic of Liberia, 1-10.
Commission on Revenue Allocation, Kenya. (2016). Total Allocations to County Governments (Equitable and Conditional Transfers).
Dener, C. & Young, S. (2013). Financial Management Information Systems and Open Budget Data: Do Governments Report on Where the Money Goes? Washington DC: World Bank Publications.
Donaldson, T. & Preston, L. E. (1995). "The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. Academy of Management, 65-91.
Elhiraika, A. B. (2007). Fiscal Decentralization and Public Service Delivery in South Africa. African Trade Policy Center Work in Progress No. 58, 1-25.
Fabozzi, F. J., Gupta, F. & Markowitz, H. M. (2002). The Legacy of Modern Portfolio Theory. The Journal of Investing, pp. 7-22.
Francesco, B. B. (2013). The Reform of the Public Administration in Singapore: A Model to Follow in Italy. Italia Ministry of Agricultural, Food and Forestry Policies. Munich Personal RePEc Archive, 1-16.
Gachithi, E. W. (2010). The Challenges of Budget Implementation in Public Institutions: A Case Study of University of Nairobi. Unpublished Research Project. University of Nairobi, 168.
Gomes, R. C. (2006). Stakeholder Management in the Local Government Decision-Making Area: Evidences from a Triangulation Study with the English Local Government. Brazilian Administrative Review, vol. 3 (1), pp. 46-63.
Griesse, J., & Deroose, S. (2014). Implementing Economic Reforms - Are EU Member States responding to European Semester Recommendations? ECFIN Economic Brief, 37 (2014), 1-9.
Guthrie, J., Olson, O., & Christopher, H. (1999). Debating Developments in New Public Management: The Limits of Global Theorising and Some New Ways Forward. Financial Accountability and Management, 15 (3) & (4).
Guthrie, J. (2005). International Public Financial Management Reform: Progress, Contradictions, and Challenges. Greenwich Conn: Information Age Publishers.
Hendricks, C. J. (2012). Integrated Financial Management Information Systems: Guidelines for Effective Implementation by the Public Sector of South Africa. SA Journal of Information Management, 14 (1), pp. 529-538.
Khan, A. & Hildreth, W. B. (2002). Budget Theory in the Public Sector. London: Quorum Books.
Kiilu, M. R., & Ngugi, K. (2014). Effect of Public Financial Management Reforms in the Effective Management of Punblic Funds in Kenya: A Case Study of the National Treasury. European Journal of Business Management, 2 (1), 161-169.
Kis-Katos, K., & Sjahrir, B. S. (2014). The Impact of Fiscal and Political Decentralization on local public investments in Indonesia. University of Freiburg, Department of Interational Economic Policy Discussion Paper Series Nr 25, pp. 1-34.
Lao-Araya, K. (2002). Effect of Decentralization Strategy on Macroeconomic Stability in Thailand. ERD Working Paper Series no. 17. Asian Development Bank, p. 1-31.
Martinez-Vazquez, J., Lago-Penas, S., & Saachi, A.(2015). The Impact of Fiscal Decentralization: A Survey. Governance and Economic Research Network, pp. 1-32.
Mkasiwa, T. A. (2013). Implementation of Budgetary Reforms in Tanzania: Policy Brief No. 6. Tanzania Country Level Knowledge Network, 1-20.
Mugambi, K. W., & Theuri, F. S. (2014). The Challenges Encountered By County Governments in Kenya During Budget Preparation. IOSR Journal of Business and Management, 16 (2), pp. 128-134.
National Council for Law Reporting. (2012). Urban Areas and Cities Act. Laws of Kenya, 1-31.
Neyapti, B. (2005). Fiscal Decentralization and Deficits: International Evidence. Ankara, Turkey: Bilkent University.
Njenga, A. N., Omondi, M. M., & Omete, F. I. (2014). Financial Management Reforms and Economic Performance of Public Sector in Kenya. International Journal of Business and Management, 6 (31), 148-161.
Njeru, P. N. (2016). An Assessment of Integrated Fiancial Management Information System Implementation towards Effective Management Practices in Nairobi and Lamu Counties. Strathmore University Electronic Theses and Dissertations, 1-64.
Omisore, I., Yusuf, M., & Nwufo, C. I. (2012). The Modern Portfolio Theory as an Investment Decision Tool. Journal of Accounting and Taxation, vol. 4 (2), p. 19-28.
Onduso, E. A. (2013). The Effect of Budgets on Financial Performance of Manufacturing Companies in Nairobi County. Unpublished thesis. University of Nairobi, 1-93.
Onyiah, A. I., Ezeamama, N. N., Ugwu, J. N. & Mgbodile, C. C. (2016). Nigerian Budget Implemetation and Control Reforms: Tool for Macro Economic Growth. British Journal of Economics, Management & Trade, 11 (2), 1-13.
Parham, D. (2002). Microeconomic Reforms and the Revival in Australia's Growth in Productivity and Living standards. Conference of Economists, (pp. 1-29). Adelaide.
Rajasekar, S., Philominathan, P., & Chinnathambi, V. (2013). Research Methodology. Bharathidasan University. India.
Ross, S., Westerfield, R. & Jaffe, J. (2009). Corporate Finance, 5th edition, Irwin and McGraw Hill, Boston.
Samadi,. H., Keshtkaran, A., Kavosi, Z., & Vahnedi, S. (2013). The Effect of Fiscal Decentralization on Under-Five Mortality in Iran: A Panel Data Analysis. International Journal of Health Policy and Management, 1 (4), 301-306.
Scheers, B., Sterck, M., & Bouckaert, G. (2005). Lessons from Australian and British Reforms in Results-Oriented Financial Management. OECD Journal of Budgeting, 5 (2), 133-162.
Schwarz, G. (2013). Response Rate in European Business Tendency Surveys. Australian Institute of Economic Research, 1-54.
Wakhungu, D. (2014). Impact of Public Finance Management Reforms on Financial Performance of Commercial State Owned Enterprises in Kenya. Unpublished Research Project. University of Nairobi, 1-60.
Golafshani, N. (2003). Understanding Reliability and Validity in Qualitative Research. The Qualitative Report, 8 (4).
Kombo, K. &. Tromp, C. (2006). Proposal and Thesis Writing. Makuyu: Pauline Publications.
Kothari, C. R. (2004). Research Methodology: Methods and Techniques (2nd Ed.. New Delhi: New Age International (P) Limited.
Robson, C. (2002). Real World Research. A Resource for Social Scientists and Practitioner Researchers, 2nd edition. Blackwell: Oxford.
Sapsford, R., & Jupp, V. (2006). Data Collection and Analysis. London. Sage Publications.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students. England: Pearson Education Inc.
Welman, C., Kruger, S. J. & Kruger, F. (2001). Research Methodology for Business and Administrative Sciences. United Kingdom. Oxford University Press.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186