Effects of financial management practices on performance of Kenya Medical Training College
Financial management in public organizations is concerned with ensuring funds are available when needed and that they are obtained and used in the most efficient and effective way to the benefit of the citizens. Managing the movement of funds in relation to the budget is essential for a public academic institutions performance. But experience reveals that the financial management processes of public academic institutions are generally weak and dominated by conditions of resource scarcity visà- vis the ever increasing agenda of development activities on which such funds could be spent. Despite KMTC being ISO 9001:2000 certified, its performance in terms of service delivery continue being poor as depicted by the high level of employee turnover, delays in service delivery, low student retention rate and low customer satisfaction index. The study sought to establish the effect of financial management practices on performance of KMTC. This study was conducted through the use of a descriptive design. The target population of this study was the 201 finance staff of KMTC from which 60 were selected using stratified random sampling. This study made use questionnaires for primary data collection. Data collected was purely quantitative and it was analyzed by descriptive analysis. In addition, the researcher conducted a multiple regression analysis so as to determine the effects of each of the independent variables on performance of KMTC.The study found that the annual budget process affects the performance of Kenya Medical Training College mainly through cost-minimization emphasis, budget inflexibility, resource allocation and budget accuracy. Financial reporting and tracking through record keeping, having internal accounting experts, data management and financial information communication affect the performance of KMTC to a very great extent. The study concludes that that financial reporting and tracking had the greatest effect on the performance of KMTC, followed by annual budget process while level of internal controls had the least effect on performance. The study recommends that for the institution to reap the maximum benefit from their budgets, the managers should be evaluated in part on the accuracy of their budgets. KMTC should also improve their financial reporting and tracking by automating their record keeping.