Factors that affect budget utilization by government ministries in Kenya

Abstract

The annual amount of funds not utilized by Kenyan government ministries and returned to treasury has been a cause of concern to all stakeholders in the public management field. With the return of such funds, project implementation will be affected and government policies affected as well which will impact in the development in various sectors in the country. It is on the basis of this that the study sought to investigate factors that affect budget utilization government ministries in Kenya. The study adopted a cross sectional research design in which questioners were issued to finance officers in various ministries and their data analyzed using descriptive statistics and factor analysis. The results were analyzed using tables and factor index matrix. The findings of the study were that the ministries had documented budget and budgeting process that acts as a reference material on how the funds will be utilized and budgeting control procedures be maintained. The most focal factor that affects budget utilization are structural and cultural factors that exist in the ministry with the training and educational programmes coming out as the least factor that affect the utilization of budget funds in the ministries. Within the ministry, a lack of alignment between the organizational structure and structure of performance reporting requirements, value and usefulness of performance information were found to undermine the budget utilization