EFFECT OF INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM ON PERFORMANCE OF PUBLIC SECTOR: A CASE OF NAIROBI COUNTY GOVERNMENT

ABSTRACT The purpose of this study is to analyse the effectiveness of Integrated Financial Management Information System (IFMIS) on performance of public sector in Kenya. Public finance management has come under immense scrutiny by donor community as well as general public in a call for enhanced accountability of the government expenditures for an improved public service delivery. This study aimed to analyse how the government of Kenya has tackled this problem and how effectively the system in use has succeeded in meeting this objective. The study therefore analysed four variables; financial reporting, budgeting, internal control and implemented government projects to assess the effectiveness of the implemented system. The study used descriptive research design to collect data. To analyse the effectiveness of identified factors on the use of the system, descriptive and inferential statistics were used. The target population of the study was 150 employees from Nairobi County Government. The sample size was drawn from the sections of finance department that includes, budgeting, procurement and internal audits, and at public works department where the financial systems are applied. The primary data was collected through questionnaire with set questions relating to specific objectives of the study. Random sampling technique was applied to get a sample population that was issued with the questionnaires. The study used quantitative and qualitative method of data analysis using descriptive statistics on quantitative data and inferential statistics on qualitative data. Data results and findings were presented in tables and figures. The study found that IFMIS has been effective in financial reporting, budgeting and internal controls as well as implementation of government projects, although there were challenges faced in internal controls. The study revealed that there was a positive relationship between the effectiveness of IFMIS on public financial management and the independent variables; financial reporting, budgeting, internal controls and projects as was revealed in the regression analysis. The study concluded that there was a relationship between IFMIS in public finance and financial reporting, budgeting, internal control and government projects as 72.4% of the effectiveness of IFMIS was accounted for by the study independent variables. The relationship gave 95% confidence level of effectiveness. The study recommended that the IFMIS be enhanced and improved at system development level so that it gives real figure and factor in more functions of operation linked to financial service for better service delivery. The Nairobi County Government should consider prioritizing on improvement of internal controls module of the system as this presents and manages all other finance management functions