A study of financial management practices by Africa’s regional economic blocs. A case of east African community
The study seeks to examine the financial management practices by the EAC which has been faced with rising membership implying a bigger financial burden to the Partner States resulting to the swelling of the budgeted fiscal requirements Thus, the financing and allocating of its funds faces major challenges which limit the extent of implementation of her development strategy and initiatives. In the study, literature reviewed included principles of sound financial management; financial planning responsibilities and budgeting principles for organizations. The processes involved in IGOs financial management including the sourcing and utilization of funds as well as the role of development partners Community have also been identified and reviewed. A survey research design was employed in the study which involved qualitative and quantitative sampling drawn from the East African Community management team. The target population for this study was the executive staff of EAC in Arusha, Nairobi and Kampala. The study utilized primary data by use of questionnaire to gather data on principles of financial management which had both structured closed ended questions based on the objectives of the study. The study findings on the adherence sound principles of financial management revealed the following limitations in the following areas namely: contingency planning, lack of sufficient documentation in areas of major assumptions and forecasting methods, cross referencing of budget data to units goals and objectives significant changes in current activities, goals and objectives, cash management plan to ensure optimal utilization of cash resources available to the organization and significant changes in current activities. The responsibilities of financial risk assessment showed limitations in the organization and the adaptation of the International Public Sector Accounting Standards (IPSAS) was partial. The study recommends the adaptation of a method for taking corrective actions which includes revising plans or budgets to reflect changed circumstances and alteration of future budget assumptions, documentation of managerial decisions. The responsibility of financial risk assessment calls for review and full adaptation of the International Public Sector Accounting Standards (IPSAS) should be considered.