The Impact of Fiscal Probity on Public Financial Management in Liberia

Abstract

This study was conducted to establish the impact of fiscal probity on public financial management in Liberia. A self-administered questionnaire was used as a sole means of collecting data from a targeted sample of forty four line ministries and agencies in Monrovia. However, the data was collected from thirty respondents giving a response rate of seventy one percent. Qualitative data was analyzed using quantitative analysis. Budget variance was used as the dependent variable for the study. Ethics, Legality, and Transparency were used as the independent variables. The researcher predicted there was a strong positive relationship between fiscal probity and public financial management in Liberia. A regression analysis was performed to establish the impact of ethics, legality and transparency on budget variance. The study also sought trend analysis on the budget variance of line ministries and agencies over the period of five years, and this showed a positive trend of the budget variance for most of the period. The study concluded that fiscal probity has a strong positive impact on public financial management in Liberia. Line Ministries and Agencies in Monrovia utilize fiscal probity to enhance public financial management. The study also established that the utilization of fiscal probity by line ministries and agencies has brought about economic growth and development, reduce unemployment and poverty. Most of the line ministries and agencies in Monrovia do not exercise transparency. Notwithstanding, transparency enables line ministries and agencies to execute their objectives well thus, resulting in a positive impact on public financial management. The regression analysis conducted established that the independent variables have a positive strong correlation with the dependent variable. Each of the independent variables: ethics, legality and transparency contribute positively to budget variance. It is also evident from the study that without the utilization of fiscal probity by government most line ministries and agencies would struggle with their objectives of fiscal discipline or eventually collapse.