The effects of financial accountability on the Performance of Non-governmental organizations in Kenya

Abstract

Financial accountability has been one of the most problematic and prevalent issues for business worldwide for a long time. Increase in financial misappropriation and number of corporate scandals had an important impact on understanding and analyzing financial accountability and in turn on audit of the same and its regulation. The growth in finance misappropriation cases indicates that a strong need exists for research approaches that better enable auditors and investigators to detect and prevent potential misappropriation. The study aimed to provide an understanding to the non-governmental. The study objective was to establish the effects of financial accountability on the performance of nongovernmental organizations in Kenya. The research design used in this study was descriptive survey. The NGO Coordination Board identifies thirty International NGOs with offices in Nairobi County (see Appendix III). Stratified random sampling design was used to select the sample. Using stratified random sampling design, the researcher selected 52 respondents on whom to conduct the survey. Semi structured questionnaire were used to collect the primary data. Descriptive statistics was employed to analyze the data. The mean score for each attribute was calculated and the standard deviation used to interpret the respondents deviation from the mean. The results were presented on frequency distribution tables, pie charts and bar charts. Here the interest was focused on frequency of occurrence across attributes of measures. A multivariate regression model was applied to determine the relative importance of each of the variable with respect to impact of financial fraud on the financial performance. The study found that the NGOs that applied financial standards in ensuring accountability of finances in the organizations boosted Donor support which resulted in improved performance. The study also established a significant relationship between financial performance of NGOs in Kenya and the independent variable financial accountability. The study finally concludes that taking the independent variables at zero, a unit increase in financial accountability will lead increase in the scores of financial performance in NGOs in Kenya. The study recommends that all NGOs should have policies and procedures established so that; boards and officers understand their fiduciary responsibilities to ensure financials are managed properly and the charitable purposes of the organization are carried out.