The Effects of Using Budget Tools on Transparency in County Governments of Kenya

Abstract

The study set out to investigate the effects of using budget tools on transparency in county governments of Kenya. Specific objectives were to; investigate the relationship between policy statements and budget transparency; to explore how appropriation of financial allocations enhances budget transparency; to investigate the role of operational guidelines on budget transparency and finally to establish communication mechanisms that facilitate improved budget transparency. The study adopted a descriptive design and used both qualitative and quantitative methods for the data collection and data analysis respectively. The target population was the county government budgets. The sample frame had forty-seven (47) County Budgets for the Fiscal Year 2019/2022 ending June 2022 where a sample size of eight (8) county budgets were drawn. Data was collected using an evaluation tool obtained from Government Financial Officers Association (GFOA, 2014). Each of the four (4) budget tools had various transparency indicators to tick and every indicator was scored on a scale of (0-4). Data was analyzed by the use of descriptive statistics. Results from the qualitative data were reported using percentages and presented in Charts and tables. The literature review revealed some empirical evidences which raised concerns whether budgeting practices at the county level are geared towards promoting transparency and that was the main research problem. The researcher hypothesized that effective use of the budget tools would result to enhanced budget transparency. The study found out that there exists a strong correlation between budget tools and transparency. However, the effect was based on compliance to the transparency indicators, whereas the higher the compliance to the budget tools, the higher the scores and where there was deviation from the budget tools, the lower the scores. In conclusion, the study revealed that more engagements and interventions ought to be put in place to achieve better compatibility between the budget tools and transparency. Some of the recommendations made included; Budgets ought to have clear financial statements to emerge as policy documents; all matters that are subject to appropriation should be clearly highlighted in budget for it to appear as financial plan; Budgets have to describe all activities, services or functions carried by each unit to appear as operations guide and finally, Budgets should be structured in a clear way as to increase comprehension of the regular reader in order to reflect as a communication device. These prescribed features will go a long way to ensure that budget tools enhance budget transparency in the county governments of Kenya. However, as the study was only conducted on eight (8) county budgets or 17% of the sample frame limited the scope and the results may not be as accurate as need be. Therefore, a follow-up study to identify what actually promotes budget transparency might be required.