Budgeting practices and absorption rate of devolved funds by County Government of Nyeri

Abstract

Absorption rate is a vital tool in determining the efficiency and general performance of the counties as regards utilization of the intended funds. A majority of counties absorbed less than 50 percent of their budgets in the first nine months of the 2018-2019 financial year. Nyeri County had a development absorption rate of only 21.1%. This study therefore sought to establish the influence of budgeting practices on absorption rate of devolved funds by county government of Nyeri. This study used descriptive survey design. The target population for this study comprised 34 senior officers in the department of finance and economic planning in Nyeri County. A census of all 34 senior officers in the department of finance and economic planning was conducted. A self-administered questionnaire was used to collect data. Descriptive statistics such as frequencies, percentages, mean and standard deviation was used to describe the results in the study. Chi-square tests were used to find the relationships with the help of statistical package for social sciences. The findings show that the county government of Nyeri had good budgeting practices. There was a significant relationship (χ2= 44.316, df=21, p=0.02) between budgeting practices and absorption rate of devolved funds by county government of Nyeri. The study concludes that budgeting practices influence absorption rate of devolved funds by county government of Nyeri. The study therefore recommends that the county government ought to pass budgets in conformity with the cash disbursement schedules.