Effect of Quality of Financial Reporting on Financial Sustainability of Funded Agricultural Projects: a Case Study of Marsabit County

Abstract

This research study aimed at establishing effect of quality of financial reporting on financial sustainability of funded agricultural projects in Marsabit County. This was aided by three specific objectives that included: To determine effect of qualitative attributes of financial reporting on financial sustainability of agricultural funded project, determine effect of financial management strategy on financial sustainability of agricultural funded projects and lastly to determine impact of stakeholders’ participation and involvement on financial sustainability of agricultural funded projects. The study took up a descriptive research design and its targeted population included all the 9 funded agricultural projects in Marsabit County as at February 28th 2020. Stratified purposive sampling of 71 key project personnel and key users of prepared financial reports was taken. This was objectively done to ensure the study got the needed information due to the dynamic characteristics. Each project represented a stratum from which the samples were drawn. Primary data was obtained through the use of structured questionnaires. Both qualitative and quantitative data were used. The information was largely studied and analyzed using illustrative and inferential statistics. Specific inferential used included correlational and regression analysis. A two-phase model was adopted and, ultimately, a multivariate model was applied in determining quality and direction of correlation of study variables. Outcome of the research showed, there exist a positive significant association between financial sustainability and financial reporting quality, financial sustainability and financial management strategy, financial sustainability and stakeholder involvement & participation of funded agricultural projects in Marsabit County. The study recommended that funded agricultural projects should take a qualitative approach in reporting that incorporates faithful representation, relevance in terms of providing information that is forward looking, information that addresses business opportunities and risks, information that complements in terms of providing feedback on how certain significant transactions and market events affect the operations of the projects in order to improve financial sustainability