Thesis:

Impact of determinants of own source revenue collection on financial performance of county government of Meru, Kenya

The objective of OSR collection was to address disparities in income and wealth distribution, and in contemporary economics, taxes stood out as the most crucial revenue sources. With the implementation of a devolved system of government, counties were expected to experience an increase in instances of financial deficits in their budgets. This study aimed to identify the effect of operational factors influencing OSR collection on financial performance in the County Government of Meru. The specific objectives were to assess the impact of competence, evaluate the effects of revenue automation, examine the influence of internal control, and gauge the impact of County policies on the financial performance of the County Government. The study drew guidance from the new public management theory, stakeholders’ theory, and resource view-based theory, employing an explanatory research design. The target population consisted of 276 staff from the County Government of Meru, including chief officers, technical finance staff, technical accounting staff, and members of the County Assembly. Using stratified random sampling, 163 respondents were selected. The study employed both descriptive and inferential statistical analyses. Data collection involved the administration of a selfadministered questionnaire, and the reliability of the instrument was tested using Cronbach's alpha. Descriptive and inferential statistical analyses were conducted on the quantitative data, using Pearson's correlation coefficient to determine relationships between independent and dependent variables. Regression analysis was employed to predict the impact of operational determinants of OSR collection on financial performance. The study found that internal controls had the most significant impact on the financial performance of the Meru County government. In contrast, staff competencies, county government policies, and automation of revenue collection had a lesser effect. All variables were significant (p < 0.05). The study recommends that county governments allocate more funds for training and seminars for tax workers to enhance their competencies and expertise. Additionally, it suggests strengthening internal control mechanisms to improve monitoring of financial performance and boost overall financial results for the county government.