Influence of donor funds disbursement procedures on project implementation in Kenya: the case of NGOs in Nairobi county
The Non-Governmental organizations receive massive donor funding to finance their projects. According to Global Humanitarian Assistance (2011), Kenya received $537 Million in official humanitarian assistance in 2011, making it the world’s eight recipient of aid and the Kenyan NGOs received over US$ 95 million in year 2011 for their projects. However, Kenyan NGOs are faced with challenges on funds disbursement which causes delay in project implementation. The delay in disbursement of funds from the donors is inherent in the disbursement procedures that most NGOs fail to comply with. The purpose of this study was to investigate the influence of donor funds disbursement procedures on project implementation in Kenya: the case of NGOs in Nairobi County. The study was guided by following research objectives ;to determine how the periodic donor financial reporting influence the project implementation, establish how the periodic programme reporting influence project implementation, examine how audit requirements influence project implementation, to assess the extent to which grant budget approvals influence project implementation and to establish how banking facilities influence project implementation for NGOs donor funded projects in Nairobi County. This study adopted a descriptive survey design to a target population of 1,213 donors funded NGOs operating in Nairobi County where a 10 percent sample size of 121 NGOs participated in the study. Simple random sampling technique was then employed to select the respondent NGOs based on the chosen sample. Purposive sampling was used to select one finance manager from each of the sampled NGOs as target respondents in the study. The researcher used a structured questionnaire to obtain primary data from the finance managers drawn from the selected NGOs. The reliability test Cronbach Apha generated a coefficient of 0.75 which was highly reliable for the study. The researcher used descriptive statistics to analyze data by utilizing means, modes and standard deviation as per the research objectives. Inferential statistics analysis was done to determine the strength between independent variables and dependent variables. The results of data analysis were presented in form of frequency tables for interpretation. The study found out that periodic donor program reporting contributes the most towards project implementation, followed by donor financial reporting, then audit requirements, grant budgets and last the bank facilities. The study further found that project accounts information is regularly updated and that statutory audits are carried out every year by a qualified external auditor. The study also found out that the variables in this study explain 63.5 percent of the donor funds disbursement procedures’ influence on project implementation. The study concluded that the donor periodic financial reporting, donor periodic programme reporting, audit requirements, grant budget approvals and banking facilities all influence project implementation in the NGOs. The study recommended that donors and NGOs to design and harmonize funds disbursement procedures acceptable to both parties to ensure successful implementation of the projects by the NGOs in Kenya. The study makes contribution to knowledge on financial management and project implementation for Kenya’s NGOs sector.