Description
Kenya government looses about one third of the national budget to corruption engineered through unexplained purchases with the County Governments leading in such unexplained purchases as is annually raised by the Auditor General leading to stalled projects, under-development and massive wastage of public resources. For example, in Vihiga County in 2018/2019 financial year Kshs. 3,454,884 and another Kshs. 15,805,000 was raised as audit query of unexplained legal fees expenditure and purchases of motor vehicles and land. In Busia County, Kshs 6,699,428 and Kshs. 7,800,000 in contracts of the construction of faulty laundry machines. In Marsabit County, Kshs. 1,475,000 of supplies of solar power systems as unsupported purchase of fuel. The investigation examined the effect of procurement related losses on financial sustainability of County Governments in Kenya. We tested the hypothesis HO1: that procurement related losses do not significantly affect financial sustainability of County Governments in Kenya. The study used a casual correlation research design taking a census of the 47 County Governments in Kenya. The study analyzed panel data regression between 2014 to 2018, a period of 5 years. The study established statistically significant effect of procurement related losses in audit queries raised by the Auditor General on financial sustainability of County Governments (β =-1.20875, p=0.008) indicating that an increase in procurement related losses in audit queries by 1 unit leads to a decrease in financial sustainability of County Governments in Kenya 1.20875 multiple units. The study therefore concluded that procurement related losses in audit queries raised by the Auditor General negatively affected financial sustainability of County Governments in Kenya. The study recommends that the County Governments in Kenya should evaluate their respective Procurement Policy aligning them with PPDA Act 2015 with a deliberate intention of reducing procurement related losses which negatively affect financial sustainability of County Governments in Kenya.
Key Words
Procurement Practices, Audit Queries, Public Finance, Financial Sustainability
