Abstract: The purpose of this study was find out the effects of public finance management reforms on the financial performance of Commercial State-Owned firms in Kenya. The objectives of the study were to determine the effect of the Public Finance Management Reforms on the financial performance of Commercial State-Owned firms in Kenya and to undertake a comprehensive analysis about designing, implementing and assessing public financial management (PFM) reform initiatives amongst Commercial State-Owned firms in Kenya. The study adopted a descriptive survey research design in which samples of 30 out of the 168 commercial state enterprises were targeted. Primary and Secondary data was used in the study. The study used descriptive statistics such as frequency, percentages, mean and standard deviation to show the distribution of responses inferential statistics, regression in particular to show the relationship between the dependent and the independent variables. The study found out that the value of adjusted R square for CSOEs was 0.821, this shows that there were 82.1% changes in the financial performance of the CSOEs after the PMFRs was adopted across the firms. This could be attributed to changes in proper Financial Planning, Effective Internal controls and good management team of the firm. The study found out that only 17.9% was attributable to external factors outside the model. The correlation co-efficient R of 0.994 denotes that there is a strong positive relationship between financial performance and management, financial planning and internal controls. However, there was positive relationship between ROA and training, competence, accounting controls and organizational goals. From the study, the correlation coefficient showed that there was positive relationship between ROE and training, competence, accounting controls and organizational goals. The Pearson’s co-efficient matrix among the variables with the focus between the independent variables and the dependent variables. The training of management on adopting the reforms has a weak positive correlation with ROA at 0.371 and is also has a weak positive correlation with ROE at 0.358, this implies that the correlation was less significant at α=0.01. Auditing shows a negative correlation with ROA at -0.242 and at -0.483 for ROE, this implies that the relationship of the coefficient was insignificant at α=0.01 and also shows that most of the cooperatives were not doing effective audits at various organisations levels.
Keywords: financial performance, Financial Planning, training, competence, accounting controls.
Title: EFFECTS OF PUBLIC FINANCIAL MANAGEMENT REFORMS ON FINANCIAL PERFORMANCE OF STATE OWNED CORPORATIONS IN KENYA
Author: Kinyanjui Chris Mburu, Dr. Jane Omwenga
International Journal of Management and Commerce Innovations,
ISSN 2348-7585 (Online)
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