A survey of financial management practices among development NGOs in Kenya
Abstract
The objectives of this study were to identify financial management practices of
development NGOs and determine the strengths of the practices in ensuring sound
financial management. Thirty four development NGOs responded to the questionnaire
out of 50 sampled for the study, giving a response rate of 68%. The literature explored
the definition of development NGOs and financial management practices. The literature
recognized the role of the development NGOs in supplementing governments'
development effort, the history of NGOs in Kenya, NGOs financial management
practices, challenges to the NGOs financial management and causes of financial
mismanagement.
The methodology was based on the fact the study was a cross sectional survey. This
method allowed for collection of a large amount of data that could be statistically
analyzed. The data was collected from development NGOs that were randomly
selected to ensure that a wide range of NGOs were represented in the study. Data was
collected through closed ended questionnaire using the drop and pick approach. The
respondents were the executive/managing directors of the NGOs or the chief financial
officers. Data analysis was done through use of content analysis.
The findings were that the financial manaqernent practices of deyelopment NGOs
partially conforms which the laid down procedures of International Financial Reporting
Standards. Inadequate budget forecasts was notably present which results in poor
financial planning. The study also revealed inadequate regulatory financial structure in
which NGOs operate and key weaknesses in financial management practices of internal
control namely: Fiscal policies and financial oversight, analysis of service cost on regular
basis, establishment of guidelines to invest idle funds, implementation of audit
recommendations for systems and procedural improvements that covers financial
compliance.
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Citation
MBASponsorhip
University of NairobiPublisher
University of Nairobi School of Business, College of Humanities and Social Sciences