Financial Management Practices and Funds Management of Public Secondary Schools in Embu County, Kenya
Abstract
This study examined the effect of financial management practices on funds management in public secondary schools in Embu County, Kenya, in line with the government’s commitment to inclusive and equitable education under Sustainable Development Goal 4. Despite substantial public investment in education, many schools continue to experience financial constraints that hinder effective service delivery. The study focused on four key practices: financial reporting, financial literacy, financial planning, and auditing. It was anchored on the Resource-Based View, Agency Theory, and Information Asymmetry Theory. A descriptive research design was adopted, targeting 600 respondents comprising principals, bursars, and chairpersons from 200 schools. A stratified random sampling technique yielded a sample of 240 respondents. Data were collected using semi-structured questionnaires, whose validity (face, construct, and content) and reliability (Cronbach’s alpha > 0.7) were confirmed. A pilot study involving 30 schools was conducted to enhance data quality. Data analysis employed both descriptive statistics (frequencies, percentages, means, and standard deviations) and inferential statistics, specifically multiple linear regression. Diagnostic tests for normality, linearity, and multicollinearity were conducted to ensure model accuracy. The findings revealed that all four financial management practices significantly and positively influence funds management. Financial reporting and financial literacy emerged as the most influential factors, while financial planning and auditing also contributed significantly. However, schools still face challenges related to cash reserves, investment of surplus funds, and income diversification, indicating a gap between adopted practices and financial outcomes. The study recommends that the Ministry of Education institutionalize mandatory financial management training programs for school financial officers.
Keywords: Financial Management, Practices, Funds Management, Public Secondary Schools, Embu County, Kenya
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