Influence of Budgeting Practice on Financial Sustainability of County Governments in Kenya

Abstract

This study examined how budgeting practices affect the financial sustainability of county governments in Kenya. Guided by the Theory of Fiscal Federalism, the study adopted a positivist research philosophy, descriptive and correlational research designs, and a quantitative approach. Structured questionnaires were administered to respondents involved in budgeting, financial management, auditing, revenue, procurement, planning and administration across county governments. Of the 341 questionnaires administered, 280 were returned, for a response rate of 82.1 per cent. Data analysis involved descriptive statistics, Pearson’s correlation coefficient and simple linear regression techniques. The analysis established a significant positive association between budgeting practices and financial sustainability (r = 0.784, p < 0.01). Additionally, budgeting practices accounted for 61.5 per cent of the variance in financial sustainability (R² = 0.615), with a statistically significant positive regression coefficient (? = 0.784, p < 0.001). The study concluded that budgeting practices were significantly associated with financial sustainability among county governments in Kenya. It recommended strengthening revenue forecasting, expenditure controls, budget implementation and monitoring, alongside enhancing the capacity of finance and planning personnel to support evidence-based corrective action. The findings provide empirical evidence to inform county budgeting practices and public financial management policies aimed at strengthening fiscal discipline, resource utilisation and sustainable service delivery.