The Effect of Iso Certification on the Financial Performance of Public Sector Institutions

Abstract

The Government of Kenya is expressing dissatisfaction with the performance of its institutions especially financial performance, which would prevent it from achieving any sustainable development despite having in place very effective policies. The poor public financial performance is attributable to lack of adoption of ISO certification, according to academic literature, studies and other journals. There is scanty information linking ISO certification to public financial performance in Kenya, which caused this study to be conducted with an objective of evaluating the effects of ISO certification on financial performance of public sector institutions in Kenya. This study used a descriptive survey in soliciting information in the area of research and its target population was selected from 70 public sector institutions, which were operational between 2008 and 2012. Data was collected from secondary sources and analyzed using both descriptive and inferential statistics. This study revealed that the ISO certification Status affects the financial performance of public sector institutions positively. It was found that an increase in the period after ISO certification enhances the financial performance of public sector institutions and vice versa. The study recommends that the Government of Kenya review its standards and audit policies to ensure that all its institutions are compelled by regulations to adopt ISO certification and design policies to ensure that the firms that have adopted receive support during the ISO continuous improvements. There was a significant relationship between ISO certification status (p-value=.029) and period after ISO certification (p-value = .004) and financial performance of the public sector institutions.