Challenges of operational budgeting at the Ministry of Finance in Kenya

Abstract

A budget can act as a motivator and communicator, as well as for functional co-ordination and performance evaluation (Dominiak and Louderback, 1988) of an organization. This study aimed at investigating various challenges of operational budget at the Ministry of Finance. The population of interest of this study was the Ministry of Finance in Kenya. There were twelve(12) departments within the Ministry which includes; budgetary supplies, external resources, accountant general, information technology services, pensions, economic affairs, monopolies and prices commission, debt management, government investment, internal audit, government clearance agency, and administration. Questionnaires were designed to identify the challenges that are faced in the formulation of operational budgets by Ministry of Finance in Kenya. Descriptive statistics were used to summarize the data. This included percentages and frequencies. Tables and other graphical presentations as appropriate were used to present the data collected for ease of understanding and analysis. The study concludes that members of the different departments and areas were included in the budget committee and these included accounts managers, procurement managers and all heads of departments. In addition, the study also concludes that the Ministry of Finance faces many challenges in the implementation of operational budget .The challenges included lack of technology, inflexibility and political changes. The study recommends that political leaders should not be allowed to interfere with the operation of operation budgeting at the Ministry of Finance. Political conflicts affect the implementation of an operating budget. The study recommends that for the Ministry of Finance to overcome operational budgeting challenges, there is a need for proper and efficient technology. Without capable, efficient IT-support, implementation of an operating budget concept is infeasible