Effect of Budget Execution on the Performance of Counties in Kenya

Abstract

Budget execution refers to the process during which public institution (MDAs and Counties) implement their activities and programmers for which parliament or county assemblies have made budget appropriations. Budgets are strategic tools used in the planning of the effective delivery by any organization. In that budgets is the financial explanation of work, services or products to be produced or services to be delivered by the organization. In the same vein, county government have plans and programmed to be implemented, and these programs are quantified in the form of budgets. The budgeting processes and executions of programs in a county are determined by county leadership, thereby differing from county to county. A poorly formulated budget is often impossible to execute, while a poor budget execution strategy renders even the best of budgets impotent. County Governments are devolved units which are geographical and envisioned by the constitution of Kenya, 2010. Devolution created the county government which led to sharing of the national cake by the counties this, therefore, means that the resources that were only controlled by the centralized national government executive and legislature is distributed to the forty-seven county executives and assemblies. County performance is the output of expenditure undertaken during the year is from several division which is considered by the county government to the national government policies. The county performance measure will be measured against the gross county product which is a measure of the economic. This research aims to identify the extent to which budget execution affects the performance of county governments in Kenya. The research identified four variable that is gross county product, local revenue, absorption rate and personal emolument and how they affect the gross county product for each county. The research used secondary date from the office of the controller of budget and Kenya national bureau of statistics and analysis was done using SSPS and the findings were interpreted. The findings imply that the independent variable affects the dependent variable and therefore if they are increases then the gross county product for each county will improve for all the years under research. This shows that there is a need of improving the revenue collected by the county government and these can be done through various means which the county knows best, the county should also ensure that the money allocated to them have been absorbed properly before the end of the financial years need for extensive training as well as empowerment of the budget practitioners to be able to create congruence between budgets, budgeting processes and project implementation.