Effect of Integrated Financial Management Information Systems on Financial Performance of Garissa County, Kenya

Abstract

The acceptance of integrated financial management information system in Kenya has been advocated as the best approach in justifying the ensuing effects of public procurement embezzlements that have dogged the public sector since independence. Integrating financial management systems increases capability of controlling and checking of the spending and receipts in Government departments, rises the possibility of accessing the information on financial and working performance, increase ability to access information on Government’s cash position and information on economic performance; and increase ability to establish accountability to donors and the public. Despite the introduction of the system at both national and county level, cases of mismanagement of public resources are still rampant. In light of these adverse developments, this research sought to assess the effect of IFMIS on financial performance in County Governments of Kenya with a focus on Garissa County. The study was hinged on the Weick's Model of Organizing, Etechnology perfective Theory, Technology Acceptance Model (TAM) Theory and System Theory. The study employed a descriptive research design. The study collected secondary data from the County treasury department on the budgetary allocations towards improvement of various IFMIS subsystems. An ordinary regression model was used for analysis. The study findings revealed that IFMIS has a positive and significant effect on financial performance of Garissa County. An increase in the expenditure towards improvement of the IFMIS system led to an improvement in financial performance of the County in terms of the total revenue collected by the county. The study recommends that county governments need to increase the frequency of using IFMIS for cash management as well as an increase the expenditure towards improvement of cash management IFMIS systems since it will play a significant role in establishing efficiency in financial management leading to better financial performance. The study also recommends that there is a need for county governments to increase the frequency of using IFMIS in financial reporting as well as increase the expenditure towards improvement of financial reporting IFMIS systems since it will result to a significant improvement in financial performance of the county. The study further recommends the county governments should increase the frequency of using IFMIS in internal control as well as increase the expenditure towards improvement of internal control IFMIS systems since it will lead to an improvement in financial performance of the county.