Effect of accountability on financial sustainability among non-government organization in Narok county, Kenya

Abstract

Nongovernmental organizations play an important role in providing education, healthcare, social aid, and other welfare services in most developing nations, including Kenya, and hence their financial viability cannot be overlooked. Financial sustainability necessitates that NGOs be able to meet all of their resource and finance requirements while also being in existence for an indeterminate future. However, only a tiny proportion (10%) of NGOs had achieved a desirable degree of institutional and financial sustainability. The purpose of this research was to evaluate how accountability affects the financial sustainability of public governance NGO's. The study's specific aims were to investigate the impact of financial planning, financial monitoring and evaluation, and financial controls on the financial sustainability of Narok County's public governance NGOs. The study looked into how NGO financial regulation influences the relationship between accountability and NGO financial viability. Resource mobilization theory, agency theory, and fraud theory served as guides for the study. The study used a descriptive research methodology, and data was acquired by primary means, such as questionnaires. The study's target demographic was Narok County's 180 nongovernmental organizations (NGOs) that deal with public governance. The census sample technique was used for all finance managers from each NGO who responded. As a result, the study used a 180-person sample size. The acquired data was evaluated using both quantitative and qualitative data analysis techniques. SPSS was used for data entry, descriptive analysis, reliability testing, correlation analysis, and multiple regression analysis. Diagnostic tests performed included multicollinearity, normalcy, and heteroscedasticity. Data was gathered through the use of questionnaires and analyzed using descriptive and inferential statistics. The study indicated that the independent variables Financial Control (r=0.695, p<0.05), Financial Planning (r=0.448, p<0.05), and Financial Monitoring and Evaluation (r=0.597, p<0.05) all had a positive and substantial effect on NGO financial sustainability. The Regulatory Framework was shown to have no moderating effect on the link between accountability and financial sustainability (Fchange=1.037, p-change=0.312). Accountability has a favorable and significant impact on NGO financial sustainability (r=.708, p<0.05). The study showed that a large percentage of NGOs were not sustainable, which might be addressed by enhancing NGOs' accountability standards. The study advised that NGO management seek to improve accountability processes in order to improve the NGO's financial sustainability.