The effects of intergrated financial management information system on financial performance of commercial state corporations in Kenya

Abstract

The last decade has seen a revolutionary shift towards Integrated Public Financial Management in Kenya due to the dynamic nature of local and global macroeconomic forces. The potential to create, process and use information instantaneously, without barriers of geography or physical constraints is enormous and continues to grow exponentially underscoring the need for Integrated Financial Management. A descriptive survey was used to answer the research questions on the current status of the subject of the study and in reference to the objectives of the study. The target population of the study was all the Commercial state corporations in Kenya totalling fifty three (53). A census survey of all the 53 commercial state corporations was undertaken in which case questionnaires were used to collect primary data from the respondents. The data was quantitatively and qualitatively analyzed and presented as frequency and percentage tables. The study found out that state corporations have adopted various IFMIS practices to enhance their financial performance. The regression analysis conducted revealed that the respective IFMIS practices adopted by commercial state corporations have had a significant impact on their financial performance as indicated by the high Coefficient of Multiple Determination of (R2 Square) 0.843 and P-Value of 0.001. This implies that, 84.3% of the financial performance of commercial state corporations can be attributed to the Integrated Financial Management practices they have adopted. The study recommends that; owing to the fact that 31.6% commercial state corporations are yet to adopt IFMIS, the National government through line ministries should put an effort to bring the remnant state corporations to the fold given the fact that public expenditure through state corporations accounts for over 45% of the GDP of the country. The study reiterates the need for the relevant government organs to address the various challenges outlined in the study in order to make the goals of the IFMIS e- project feasible. According to the research there is need for more investments into research in critical success factors for successful adoption and implementation of Integrated Financial Management among state corporations in Kenya. The study was limited by cost and time.