Thesis:

Impact of financial distress management practices on financial performance of county government of Meru Kenya

In the same way that other types of businesses struggle to meet their financial obligations and pay their bills on time, county governments confront issues in areas such as making timely payments to employees and vendors. These are some samples that illustrate what this category is like in general. Not only does every single stakeholder have a personal investment in the issue's successful resolution, but they also each have a role to play in the process of working toward that objective. They are aware that the manner in which a financial crisis is managed could play a role in determining whether or not the company continues to exist, and as a result, they are making an attempt to obtain as much information as they possibly can in this field. This study's objective was to investigate how different approaches to financial difficulties taken by the Meru County Government in Kenya have impacted the overall earnings and expenditures of the county. These are the objectives of this study: to conduct an analysis of the impact that financial planning practices have on the financial performance of the Meru County Government; to conduct an evaluation of the impact that financial planning practices have on the effect that internal control procedures have on the financial performance of the Meru County Government; to determine the impact that budgeting processes have on financial performance; and to evaluate the impact that government policies have on the financial performance of the county. The research was grounded in the financial distress theory and employed a correlation survey research design. The participants targeted were County Executive Committee Members, financial officers, Chief Officers, and County accountants from various departments within the Meru County government, totaling 69 respondents, with the study utilizing a census approach. Both primary and secondary data sources were utilized, with primary data collected through questionnaires and secondary data derived from financial statements obtained from County Offices. The validity of the research instrument was assessed through consultation with content experts and supervisors, while reliability was evaluated using Cronbach’s alpha coefficient. Data analysis involved employing descriptive and inferential statistical techniques, with results presented through graphs, charts, frequency tables, and a regression model. The findings indicated a statistically significant relationship between budgeting practices (R=0.539, P<0.05), internal control practices (R=0.464, P<0.05), financial planning practices (R=0.652, P<0.05), and county governance practices (R=0.543, P<0.05) with performance. The study recommended the implementation of robust budgeting and budget implementation practices to enhance resource control and effective resource utilization within the county government. Additionally, the establishment of periodic monitoring and evaluation programs was advised to improve the efficiency and effectiveness of service delivery. The insights derived from this study could benefit county managements in addressing financial challenges and improving the financial performance of County Governments. Furthermore, the study suggests exploring other variables beyond those investigated in this research to gain a comprehensive understanding of factors influencing the performance of county governments.