Financial Reporting as an IFMIS Module and Cash Management in County Government of Bungoma, Kenya

Abstract

Governments of developing countries have frequently explored techniques and systems on how to modernize and improve Cash Management in public sectors. The purpose of this study was to examine the effect of Integrated Financial Management Information System and cash management in Bungoma County Government. The anchoring theory of the study was systems theory. The following objective guided the study; to establish the effect of Financial reporting on cash management and cash management in Bungoma County Government. The target population of the study was 185 employees from sections using Integrated Financial Management Information System. A sample size of 177 respondents was drawn from the population by use of stratified random sampling method. Data from the sampled population was collected by use of well-structured questionnaires. Construct validity of the research instruments was determined using Kaiser-Meyer-Olkin (KMO) and Bartlett's tests with values of above 0.5 and probability values less than 0.05 considered valid. Internal consistency was measured by Cronbach's alpha with alpha coefficient of above 0.70 being considered reliable. Both descriptive and inferential statistics was used to analyses the data. Multiple regression and Pearson correlation were used for inferential statistics. Data results and findings were displayed in tables, figures, graphs and pie chart. The study findings revealed that Integrated Financial Management Information System had statistically significant influence on Cash Management in Bungoma County Government; Plan to Budget explained 12.9% of the variation in Cash Management[Adjusted R Square = 0.129, F (1, 172) = 26.577, Prob. = 0.000 < 0.05],  Government policies were found to have significant moderation effect on the relationship between Integrated Financial Management Information System and Cash Management in Bungoma County; plan to budget [R² change = 0.085, F-change =18.631, íŸ = 0.075, t (174) =4.316, p=0.000<0.05], All null hypotheses of the study were rejected since there was a significant positive relationship between IFMIS and cash management. The study recommends that for effective cash management in Bungoma County Government, there should be annual analysis of the achievements and challenges learnt from IFMIS so as to identify and solve any existing gaps. This study informed the executive management of Bungoma County Government on how to effectively manage cash by using IFMIS as the