The Effect of Public Finance Management Act, 2012 Adoption in Budgeting Process by County Governments in Kenya.

Abstract

The objective of the study was to find out the effect of PFM Act 2012 adoption in budgeting process of county governments in Kenya. Forty seven (47) questionnaires were administered and the researcher received 45 properly questionnaires hence giving a response rate of 87.23% response rate. Reliability test recorded Cronbach‟s Alpha co-efficients greater than 0.07 indicating that the questionnaire used was internally consistent. Adoption of PFM Act (2012) was found to strongly (R= 0.725) influences the budgeting process of the county governments in Kenya influencing 52.6% of the changes in county budgeting process. ANOVA recorded a significance values indicating that the regression model can be reliably in establishing the effect of PFM Act 2012 adoption on the budgeting process by the county governments in Kenya. The study also established that openness and accountability, county executive and county assembly relationship, public participation in budgeting and disbursements of funds from national to county governments influences budgeting process positively and in a statistically significant way.The study concludes that adoption of PFM Act (2012) was found to strongly influence the budgeting process accounting for 52.6% of the changes in budgeting process in the county governments. Further, the regression model used can be reliably used in establishing the effect of PFM Act 2012 adoption on the budgeting process by the county governments in Kenya. The study also concludes that openness and accountability, county executive and county assembly relationship, public participation in budgeting and disbursements of funds from national to county governments influences budgeting process positively and in a statistically significant way.The study therefore recommends that in order to streamline the county budgeting process, openness and accountability, county executive and county assembly relationship, public participation in budgeting and disbursements of funds from national to county governments should be adhered to as envisioned in the PFM Act (2012). The respondents being senior civil servants in the county governments had busy schedules which delayed the data collection process. The researcher exercised patience and kept reminding the respondents of the tight academic deadlines under which the research was being undertaken.The study suggests that future studies should try to establish the other factors that influence the county governments budgeting process sinceadoption of PFM Act (2012) only influenced 52.6% of the budgeting process.