The Effect of Adoption of Public Financial Reforms on the Performance of County Governments in Kenya

Abstract

This study discusses the subject of the effects of public financial management (PFM) reforms on the financial management of county government in Kenya. The PFM provides a critical financial management solution for countries whose administrative and economic infrastructure is obsolete, or has been destroyed through war and years of conflict. There is broad agreement that a fully functioning PFM can improve governance by providing real-time financial information that financial and other managers can use to administer programs effectively, formulate budgets, and manage resources. Sound PFM systems, coupled with the adoption of centralized treasury operations, can not only help developing county governments gain effective control over their finances, but also enhance transparency and accountability, reducing political discretion and acting as a deterrent to corruption and fraud. The study recommended that PFM reforms should therefore be rolled out to all public sector