Financial Reporting Practices and Financial Sustainability of County Governments in Kenya

Harrison Bwire Junge, Stephene Oloo Magadi, Symon Kiprop

Abstract: Financial sustainability was a critical concern for county governments in Kenya because it determined their capacity to mobilize and utilize financial resources effectively, meet financial obligations, maintain essential public services, and implement development programs. Despite the emphasis on sound public financial management, county governments continued to face challenges related to revenue shortfalls, expenditure pressures, and the accumulation of pending bills, limited development expenditure, and weaknesses in financial accountability. Effective financial reporting was therefore considered essential to provide reliable information for financial planning, resource allocation, expenditure control, accountability, and decision-making. This study examined how financial reporting practices influence the financial sustainability of county governments in Kenya. The study was guided by Agency Theory and adopted a positivist research philosophy, quantitative approach, and descriptive correlational research design. The target population comprised officers involved in financial reporting, accounting, budgeting, auditing, revenue management, procurement, planning, and financial administration across Kenya's 47 county governments. The study collected primary data through structured questionnaires using a five-point Likert scale. The data were analyzed using descriptive and inferential statistics, including frequencies, percentages, means, standard deviations, Pearson correlation, and regression analysis. The study obtained 280 valid responses from a sample of 341 respondents, representing an 82.1% response rate. Descriptive findings indicated that financial reporting practices were implemented at a moderate level, with an overall mean of 3.22 (SD = 1.25). Comprehensive reporting of revenues, expenditures, assets, and liabilities recorded the highest mean score (M = 3.83, SD = 1.14), followed by adherence to IPSAS (M = 3.69, SD = 1.28) and timely submission of financial reports (M = 3.64, SD = 1.30). However, transparency (M = 2.50, SD = 1.23), accuracy (M = 2.52, SD = 1.24), and stakeholder understanding of financial information (M = 2.52, SD = 1.25) recorded relatively low scores. Inferential findings established a strong positive and statistically significant relationship between financial reporting practices and financial sustainability (r = .693, p 2 = .480), while the regression model was statistically significant, F (1, 278) = 256.51, p

Keywords: financial reporting practices, financial sustainability, county governments, IPSAS, public financial management, Kenya

How to Cite?: Harrison Bwire Junge, Stephene Oloo Magadi, Symon Kiprop, "Financial Reporting Practices and Financial Sustainability of County Governments in Kenya", Volume 15 Issue 9, September 2026, International Journal of Science and Research (IJSR), Pages: 919-927, https://www.ijsr.net/getabstract.php?paperid=SR26913171557, DOI: https://dx.doi.org/10.21275/SR26913171557

Download Citation: APA | MLA | BibTeX | EndNote | RefMan