Effect of Public Financial Management Practices on Budget Absorption among Lake Region Economic Block Counties in Kenya

Abstract

Effective budget absorption is crucial for counties as it ensures optimal utilization of allocated funds for development projects and public services. However, there is evidence that the Lake Region Economic Block (LREB) counties in Kenya face a significant challenge with budget absorption. This study therefore assessed the effects of public financial management practices on budget absorption among the Lake Region Economic Block counties in Kenya. Descriptive and inferential statistics particularly correlation and multiple linear regression were used to analyze data. The regression results showed that budgeting had the strongest influence (β = 0.270, p = 0.007), followed by debt management (β = 0.257, p = 0.034), financial reporting (β = 0.248, p = 0.000) and revenue management (β = 0.117, p = 0.001). Based on the findings, it is recommended that county governments enhance budget absorption through structured budgeting, sustainable debt management, efficient revenue collection and transparent financial reporting.

Keywords:       Budgeting, Revenue management, Financial Reporting, Debt management, County Government, Budget Absorption