Relationship between accounting practices and management of funds in public secondary schools in Kisii county

Abstract

Accountability by an institution to the Government of Kenya, donors, financiers, parents and stakeholders informs that funds are used for approved purposes and the school receives value for money. This study seeks to determine the relationship between accounting practices and management of funds in public institutions in Kisii County. Specifically, the study sought to; determine the relationship between budgeting practices and management of funds, explore the relationship between book keeping practices and management of funds, explore the relationship between internal control practices and management of funds and examine the relationship between automation accounting and management of funds in public institutions in Kisii County. Target population was 352 schools where the school bursars and the Principals were the respondents. Stratified random sampling was used to select 187 respondents who were school bursars. The study used correlation research design and the primary source of data was self-administered questionnaire. Validity of the instrument was achieved by using experts in the field while reliability was determined using Cronbach Alpha coefficient test, which was 0.87. The data was analyzed using inferential and descriptive statistics with the aid of SPSS software and the results presented using the percentages, mean and mode to draw the conclusions. The finding indicated that budgeting significantly affect funds management (P<0.05). Where all stakeholders were involved in budget preparation, (mean of 3.618). The budget was vetted annually (mean of 3.848). It was found that the budget estimates were adhered to as well as comparison were made with actual values. On the contrary, the school did not involve experts in funds management. Concerning bookkeeping receipts and invoice book assisted in trailing transparency for it had a mean of 3.899. Daily financial records that were journal and cashbooks had a mean of 4.742. School fees journal entry and banks statements as well as government disbursement statements were well accounted for it had a mean of 3.208 and 4.506 respectively. The result showed that budgeting practices was significant since it had a significance of <r=0.000, p<0.05), bookkeeping practices had a significance of <r=0.021, p<0.05) and internal control practices had a significance of <r=0.000, p<0.05), automation accounting practices did not significantly affect funds management since it had a significance value of <r0.107, p>0.05). This would have been as a controlled expense for it had a mean of 4.253. Effective verifications and reconciliation of all accounts had a mean of 4.140. There was low monitoring and evaluation of internal controls process as revealed by a mean of 2.449. Internal control process provided the highest accounting process that assist in funds management. Finally, automation accounting practices was found to be in use in most of the secondary school. Electronic accounting software and m-banking affect reporting as well as efficiency and was found to significant affect funds’ management. The research concludes that budgeting, bookkeeping and internal control significantly affect the funds management. The study recommends that government through Ministry of Education should standardize the automation and use of computerized accounting systems.