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3.5 INSTRUMENTS To maximise reliability of the instrument used, the survey was constructed as follows: 1) a pilot survey was conducted to ensure the reliability of the questionnaire; 2) each question was framed succinctly to reduce ambiguity and minimize bias, thereby ensuring the high statistical value of the data; and, 3) each participant in the pilot survey was asked to state their job position to make sure participation was at senior-manager level. In short, the pilot test sought to demonstrate convergent and indiscriminate validity for all the constructs and reveal that all the scales meet or exceed the reliability thresholds for more established research (Castillo, 2009). 2 LA’s participated in the pilot study (Kiambu and Ruiru LAs). The current study pilot tested the questionnaire on two local authorities namely Kiambu county council and Ruiru municipal council. A total of 21 questionaires

Table 3 3.5 INSTRUMENTS To maximise reliability of the instrument used, the survey was constructed as follows: 1) a pilot survey was conducted to ensure the reliability of the questionnaire; 2) each question was framed succinctly to reduce ambiguity and minimize bias, thereby ensuring the high statistical value of the data; and, 3) each participant in the pilot survey was asked to state their job position to make sure participation was at senior-manager level. In short, the pilot test sought to demonstrate convergent and indiscriminate validity for all the constructs and reveal that all the scales meet or exceed the reliability thresholds for more established research (Castillo, 2009). 2 LA’s participated in the pilot study (Kiambu and Ruiru LAs). The current study pilot tested the questionnaire on two local authorities namely Kiambu county council and Ruiru municipal council. A total of 21 questionaires

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INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
e of Management & Research, New Delhi Professor, Bharti Vidyapeeth University Institute INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
e of Management & Research, New Delhi Professor, Bharti Vidyapeeth University Institute INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
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aa aaa a a Na a The FRSB (2005) advanced a quadrilateral set of key financial indicators ‘for assessing a council’s financial sustainability’. These indicators were: (a) net financial liabilities as the ‘key indicator of the council’s indebtedness to other sectors of the economy’; (b) operating surplus or deficit as the ‘key indicator of the intergenerational equity of the funding of the council’s operations’; (c) net outlays on the renewal or replacement of existing assets as the ‘key indicator of the intergenerational equity of the funding of the council’s infrastructure renewal or replacement activities’; and (d) net borrowing or lending as the ‘key indicator ot the impact of the council’s annual transactions — both operating and capital — upon the council’s indebtedness to other sectors of the economy’. A study by Boex and Muga (2004) used the following measures of financial performance to indicate the level of financial health of Tanzania Local Authorities; a) expenditure outrun ratio (or budget performance ratio), b) The annual audit opinion that is issued by the National Audit Office for each local government, c) the percentage of expenditures questioned by the NAO during the audit process. This study concluded that one can hypothesize that local authorities’ financia management performance in Tanzania is a positive function of local administrative and managerial practices. For the purpose of the current study, the Key Performance Indicators identified by Boex and Muga (2004) shall be used to measure financial challenges facing local authorities in Kenya. Given a likert scale of 1 to 5, local authorities scoring a mean of 0 to 1.65 were rated as lowly distressed LAs, those scoring above 1. 65 to 3.335 were termed as moderately distressed Las while those Las with a mean score of over 3.335 were described as highly distressed. However, the magnitude of the demarcation/classifications may change according to the weighting system. 3999 CINANCIAIL MAANACENENT DPACTICEC Carmeli (2011) shows that the sources of fiscal distress of local governments in Israel, may be classified into three major groups: structural or fixed (consists of local authorities’ size, residents’ socioeconomic status, and governmental resource allocation), organizational (consists of performance evaluation, transparency, and the role of the local government’s management), and hybrid (consists of the relationship between the central and the local governments) factors. Incorporating the variables of Park (2004),Capalbo et al (2010) and Carmeli (2011), the current study came up with the below conceptual framework ( figure 2.1).
aa aaa a a Na a The FRSB (2005) advanced a quadrilateral set of key financial indicators ‘for assessing a council’s financial sustainability’. These indicators were: (a) net financial liabilities as the ‘key indicator of the council’s indebtedness to other sectors of the economy’; (b) operating surplus or deficit as the ‘key indicator of the intergenerational equity of the funding of the council’s operations’; (c) net outlays on the renewal or replacement of existing assets as the ‘key indicator of the intergenerational equity of the funding of the council’s infrastructure renewal or replacement activities’; and (d) net borrowing or lending as the ‘key indicator ot the impact of the council’s annual transactions — both operating and capital — upon the council’s indebtedness to other sectors of the economy’. A study by Boex and Muga (2004) used the following measures of financial performance to indicate the level of financial health of Tanzania Local Authorities; a) expenditure outrun ratio (or budget performance ratio), b) The annual audit opinion that is issued by the National Audit Office for each local government, c) the percentage of expenditures questioned by the NAO during the audit process. This study concluded that one can hypothesize that local authorities’ financia management performance in Tanzania is a positive function of local administrative and managerial practices. For the purpose of the current study, the Key Performance Indicators identified by Boex and Muga (2004) shall be used to measure financial challenges facing local authorities in Kenya. Given a likert scale of 1 to 5, local authorities scoring a mean of 0 to 1.65 were rated as lowly distressed LAs, those scoring above 1. 65 to 3.335 were termed as moderately distressed Las while those Las with a mean score of over 3.335 were described as highly distressed. However, the magnitude of the demarcation/classifications may change according to the weighting system. 3999 CINANCIAIL MAANACENENT DPACTICEC Carmeli (2011) shows that the sources of fiscal distress of local governments in Israel, may be classified into three major groups: structural or fixed (consists of local authorities’ size, residents’ socioeconomic status, and governmental resource allocation), organizational (consists of performance evaluation, transparency, and the role of the local government’s management), and hybrid (consists of the relationship between the central and the local governments) factors. Incorporating the variables of Park (2004),Capalbo et al (2010) and Carmeli (2011), the current study came up with the below conceptual framework ( figure 2.1).
1 J To select the sample of 20 LAs, stratified systematic sampling was used to select the 10" LA in every Stratum. The study targeted the town clerk of each of the 2 Local Authorities. The study also incorporated the views of middle level management from five departments in each local authority namely; 1) Treasury 2) Sociz Services, housing and public health 3) works/engineering 4) Environment 5) Others. The choice of middle level management was to act as a control for th response of the town clerks and because of their perceived lack of bias, impartiality in answering the study questions. In addition, they were more preferre than junior officers, since junior officers are perceived to be unaware of the pertinent issues affecting the Local Authorities. The local authority customers were also included in the study to give a customer oriented perspective of the financial challenges facing local authorities. Six c the largest customers were picked from the list of customers provided by every local authority. The criterion for selecting the six customers per local authorit was on the basis of customers visiting the local authority on the day. Therefore, such an approach was to yield 120 customers drawn from the 20 locz authorities. a iiaetiiiaten: dentin! This study used probabilistic sampling techniques, specifically both stratified random sampling and simple random sampling. The study used lottery method recommended by Kothari, (2004) to pick ten percent of Local Authorities in every category. Stratified random sampling was preferred because; the population to be sampled wasdivided into homogenous groups based on characteristicsconsidered important to the indicators being measured. Since the number of local authorities are scattered all over the country, this presented the study with a logistical problem. The study therefore used a sample of 20 LAs selected as follows;
1 J To select the sample of 20 LAs, stratified systematic sampling was used to select the 10" LA in every Stratum. The study targeted the town clerk of each of the 2 Local Authorities. The study also incorporated the views of middle level management from five departments in each local authority namely; 1) Treasury 2) Sociz Services, housing and public health 3) works/engineering 4) Environment 5) Others. The choice of middle level management was to act as a control for th response of the town clerks and because of their perceived lack of bias, impartiality in answering the study questions. In addition, they were more preferre than junior officers, since junior officers are perceived to be unaware of the pertinent issues affecting the Local Authorities. The local authority customers were also included in the study to give a customer oriented perspective of the financial challenges facing local authorities. Six c the largest customers were picked from the list of customers provided by every local authority. The criterion for selecting the six customers per local authorit was on the basis of customers visiting the local authority on the day. Therefore, such an approach was to yield 120 customers drawn from the 20 locz authorities. a iiaetiiiaten: dentin! This study used probabilistic sampling techniques, specifically both stratified random sampling and simple random sampling. The study used lottery method recommended by Kothari, (2004) to pick ten percent of Local Authorities in every category. Stratified random sampling was preferred because; the population to be sampled wasdivided into homogenous groups based on characteristicsconsidered important to the indicators being measured. Since the number of local authorities are scattered all over the country, this presented the study with a logistical problem. The study therefore used a sample of 20 LAs selected as follows;
Ue Gee FE PIN PAINT BPO PENRO PAINE PA PN RP PSN Descriptive results in table 4.2 revealed that municipal councils have the highest level of distress (11.758) followed by city councils (11.578), county counc (10.896) and town councils (9.815). However, as indicated by table 4.3, there is no significant difference in levels of distress among the different types of counc (F=1.589, P value =0.194). The finding implies that financial distress is not a preserve of a specific category of local authority but crosscuts across all categories local authorities. Table 4.4 which shows multiple comparison between categories indicated that municipal councils have a significantly higher level of distre compared to town councils (p value =0.04). The study attempted to confirm whether local authorities were under financial distress. Results in figure 4.1 reveal that the majority (49%)of respondents fror the officers category agreed with the statement that the local authority budget out run ratio is high (meaning that the Local Authority always spends more tha it has budgeted), the salary to total operating revenue ratio is high (meaning that the salary expense take more than 70% portion of the operatin revenue)(45%), the net debt to total operating revenue ratio is high (meaning the Local Authority is highly indebted)(49%), the interest expense to tot: operating revenue ratio is high (meaning that the Local Authority may be over reliant on overdrafts)(46%), the council financial statements are frequent qualified (meaning that they are frequently not given a good bill of health)(51%),The National Audit Office queries a large percentage of expenditures durin the audit process (meaning that there seems to be expenditures that demonstrate fiscal stress)(52%). These findings imply that local authorities are in a state « financial distress since majority of the local authorities’ scores highly on the measures of financial distress. Figure 4.5 presents the detailed findings. INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
Ue Gee FE PIN PAINT BPO PENRO PAINE PA PN RP PSN Descriptive results in table 4.2 revealed that municipal councils have the highest level of distress (11.758) followed by city councils (11.578), county counc (10.896) and town councils (9.815). However, as indicated by table 4.3, there is no significant difference in levels of distress among the different types of counc (F=1.589, P value =0.194). The finding implies that financial distress is not a preserve of a specific category of local authority but crosscuts across all categories local authorities. Table 4.4 which shows multiple comparison between categories indicated that municipal councils have a significantly higher level of distre compared to town councils (p value =0.04). The study attempted to confirm whether local authorities were under financial distress. Results in figure 4.1 reveal that the majority (49%)of respondents fror the officers category agreed with the statement that the local authority budget out run ratio is high (meaning that the Local Authority always spends more tha it has budgeted), the salary to total operating revenue ratio is high (meaning that the salary expense take more than 70% portion of the operatin revenue)(45%), the net debt to total operating revenue ratio is high (meaning the Local Authority is highly indebted)(49%), the interest expense to tot: operating revenue ratio is high (meaning that the Local Authority may be over reliant on overdrafts)(46%), the council financial statements are frequent qualified (meaning that they are frequently not given a good bill of health)(51%),The National Audit Office queries a large percentage of expenditures durin the audit process (meaning that there seems to be expenditures that demonstrate fiscal stress)(52%). These findings imply that local authorities are in a state « financial distress since majority of the local authorities’ scores highly on the measures of financial distress. Figure 4.5 presents the detailed findings. INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
TABLE 4.3: ANOVA FOR DISTRESS ACROSS CATEGORIES OF LOCAL AUTHORITIES
TABLE 4.3: ANOVA FOR DISTRESS ACROSS CATEGORIES OF LOCAL AUTHORITIES
The results from officers and customers of local authorities indicate that local authorities in Kenya suffer from financial distress. The findings are consistent with those in Dollery (2009),PriceWaterhouseCoopers Report (2006),Boex and Muga (2004),Capalbo, Grossi, lanni, Sargiacomo (2010), Carmeli (2008), Deal (2007), Frank and Dluhy (2003), Kloha, Weissert, and Kleine (2005), Watson, Handley and Hassett (2005), Honadle (2006), Wunsch (2008), Institute of Economic Affairs (2009), Schoeman (2011),Jonga and Chirisa (2009) and Sennoga (2004). The above studies found that local authorities of the countries under study suffered from financial distress. 4.3: CUSTONIERS AWARENESS THAT LOCAL AUTHORITIES SUFFER FROIN FINANCIAL CHALLENGES As illustrated in Figure 4.2, customers for local authorities were also asked to express their opinion on whether they were aware that local authorities were suffering from financial distress. A majority of customers (70%) indicated that they were aware that local authorities were facing financial challenges. 4.4. FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL DISTRESS One of the objectives of this study was to determine if financial management practices contributed to the financial distress of local authorities. In order, ‘ achieve this objective, descriptive statistics were carried out followed by a regression equation. Analysis of Variance (Anova) was also carried in order to suppo the study findings. Furthermore, the results of Local Authorities officials were contrasted and compared with those of customers in order to give a clear view. the relationship. Results in figure 4.3 indicated that a majority (39%) of officers agreed with the statement that local authorities suffer from ineffective systen for detecting fraud. Twenty three percent (23%) of respondents in the officer’s category also strongly agreed to the statement that local authorities suffer fro ineffective systems for detecting fraud. This brought to a total of 62% who agreed or strongly agreed with that statement.
The results from officers and customers of local authorities indicate that local authorities in Kenya suffer from financial distress. The findings are consistent with those in Dollery (2009),PriceWaterhouseCoopers Report (2006),Boex and Muga (2004),Capalbo, Grossi, lanni, Sargiacomo (2010), Carmeli (2008), Deal (2007), Frank and Dluhy (2003), Kloha, Weissert, and Kleine (2005), Watson, Handley and Hassett (2005), Honadle (2006), Wunsch (2008), Institute of Economic Affairs (2009), Schoeman (2011),Jonga and Chirisa (2009) and Sennoga (2004). The above studies found that local authorities of the countries under study suffered from financial distress. 4.3: CUSTONIERS AWARENESS THAT LOCAL AUTHORITIES SUFFER FROIN FINANCIAL CHALLENGES As illustrated in Figure 4.2, customers for local authorities were also asked to express their opinion on whether they were aware that local authorities were suffering from financial distress. A majority of customers (70%) indicated that they were aware that local authorities were facing financial challenges. 4.4. FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL DISTRESS One of the objectives of this study was to determine if financial management practices contributed to the financial distress of local authorities. In order, ‘ achieve this objective, descriptive statistics were carried out followed by a regression equation. Analysis of Variance (Anova) was also carried in order to suppo the study findings. Furthermore, the results of Local Authorities officials were contrasted and compared with those of customers in order to give a clear view. the relationship. Results in figure 4.3 indicated that a majority (39%) of officers agreed with the statement that local authorities suffer from ineffective systen for detecting fraud. Twenty three percent (23%) of respondents in the officer’s category also strongly agreed to the statement that local authorities suffer fro ineffective systems for detecting fraud. This brought to a total of 62% who agreed or strongly agreed with that statement.
FIGURE 4.3: FINANCIAL MANAGEMENT PRACTICES 4.4.1. UPFILERS RATING TRAE FINANCIAL NIANAGEWIENT PRACTICES IN PAE LUCAL AULAUANITYT Respondents from the officer’s category were asked how they would rate the financial management practices in the local authority. Results in figure 4.4 indicated that a strong majority(69%) of respondents in the officers category rated the financial management practices as poor. This response supported other findings in this study that show that local authorities have poor financial management practices. FrImiiner AA. RATIAICM TLIT FIRIARICIAL RAARIACPRRAATAIT RNA CTISCEFG IAI TLIF IEAACAL ALITILIARITY COMply WIth FrOCUFEMeENnt ACt May Nave FesuIled IMO IWtation OF Lenager prices, tne Msing COSt OF service GelVvery ana COMUpPUON. INE FISINg COSt OF SETVICE delivery may partly explain the financial distress in most local authorities. Results in figure 4.3 indicate that a majority of respondents in the officers category disagreed with the statement that the internal audit function does not exis (48%), monthly and yearly budget analysis is not done (50%), financial reports are not produced regularly (44%) and financial statements are not prepared ir accordance with IFRS and legal requirements (46%). However, the study also observed that a total of 31%, 26%, 26%, and 21% agreed to the statements whict sends doubt as to the effectiveness of the financial management practices. For instance, the internal audit function may exist but that would not mean that it i: effective in curbing financial malpractices such as frauds and irregular procurement. Monthly and yearly budget analysis may be done but a question of whethe! the variances are investigated and an action plan for remedying variances drafted arise. Financial reports may be produced regularly but the question of whethe: they are accurate and relevant abounds. Financial statement may be prepared in line with international financial reporting standards (IFRS) and lega requirements, but it remains to be seen whether the figures in the financial statements represent reality and the actual position of the local authority.
FIGURE 4.3: FINANCIAL MANAGEMENT PRACTICES 4.4.1. UPFILERS RATING TRAE FINANCIAL NIANAGEWIENT PRACTICES IN PAE LUCAL AULAUANITYT Respondents from the officer’s category were asked how they would rate the financial management practices in the local authority. Results in figure 4.4 indicated that a strong majority(69%) of respondents in the officers category rated the financial management practices as poor. This response supported other findings in this study that show that local authorities have poor financial management practices. FrImiiner AA. RATIAICM TLIT FIRIARICIAL RAARIACPRRAATAIT RNA CTISCEFG IAI TLIF IEAACAL ALITILIARITY COMply WIth FrOCUFEMeENnt ACt May Nave FesuIled IMO IWtation OF Lenager prices, tne Msing COSt OF service GelVvery ana COMUpPUON. INE FISINg COSt OF SETVICE delivery may partly explain the financial distress in most local authorities. Results in figure 4.3 indicate that a majority of respondents in the officers category disagreed with the statement that the internal audit function does not exis (48%), monthly and yearly budget analysis is not done (50%), financial reports are not produced regularly (44%) and financial statements are not prepared ir accordance with IFRS and legal requirements (46%). However, the study also observed that a total of 31%, 26%, 26%, and 21% agreed to the statements whict sends doubt as to the effectiveness of the financial management practices. For instance, the internal audit function may exist but that would not mean that it i: effective in curbing financial malpractices such as frauds and irregular procurement. Monthly and yearly budget analysis may be done but a question of whethe! the variances are investigated and an action plan for remedying variances drafted arise. Financial reports may be produced regularly but the question of whethe: they are accurate and relevant abounds. Financial statement may be prepared in line with international financial reporting standards (IFRS) and lega requirements, but it remains to be seen whether the figures in the financial statements represent reality and the actual position of the local authority.
Local authority officers were also asked to explain why they rated financial management practices poorly. Some of the responses include; “Funds are expended without adherence to the budget”,” Some chief officers do not adhere to approved budget for the fly. “There is no proper management’ mou “Because some of staffs dont have enough skills and experience”, “Political interference, no independence”, “Due to political interference”, “Because they ar not effective”, “Because sometimes they dont give the financial in weekly or daily ”,” Its poor because of there way of collecting the taxes”, “No proper contrc and record keeping”, “Audit Department is always Compromised”, “Most of the funds Collected dont reach the office”,” A lot of Audit Queries”, “High Level o Corruption”,” Corruption is high”,” No Transparency”,” No Capacities”, “No Professionalism”, “Delay in Salary payment and remunerations”, “interference b political wing makes system fail”,” “some audit procedures are not followed”, “the councilors should keep away from management”” the practice in finance dep is very corrupt”,” lack of proper budgeting and reporting”, “the official work only under pressure” “the systems are down and cannot detect fraud”, disinterested chief officers and susceptibility to political whims”,” financial books and records are not properly kept”,” clerks have autonomous powers”. Content analysis indicate that most of the officers rated the financial management poorly because of lack of internal controls, the ineffectiveness and the lack o independence of the audit department, corruption, lack of independence and political interference from political wing, poor budgeting and lack of adherence t already set budgets, lack of capacity, skills and competence of finance officers, laxity in financial reporting among others. The local authority officers were requested to suggest recommendations for improvement of local authorities’ financial management practices. Some of thi suggested recommendations included; “| rarqmmand that all local arnthoritiec ta he ahcarhed hy cointy cavernment ta came iin with 3 very ctrango internal control cyvctam” ” Derentralizatinn ”
Local authority officers were also asked to explain why they rated financial management practices poorly. Some of the responses include; “Funds are expended without adherence to the budget”,” Some chief officers do not adhere to approved budget for the fly. “There is no proper management’ mou “Because some of staffs dont have enough skills and experience”, “Political interference, no independence”, “Due to political interference”, “Because they ar not effective”, “Because sometimes they dont give the financial in weekly or daily ”,” Its poor because of there way of collecting the taxes”, “No proper contrc and record keeping”, “Audit Department is always Compromised”, “Most of the funds Collected dont reach the office”,” A lot of Audit Queries”, “High Level o Corruption”,” Corruption is high”,” No Transparency”,” No Capacities”, “No Professionalism”, “Delay in Salary payment and remunerations”, “interference b political wing makes system fail”,” “some audit procedures are not followed”, “the councilors should keep away from management”” the practice in finance dep is very corrupt”,” lack of proper budgeting and reporting”, “the official work only under pressure” “the systems are down and cannot detect fraud”, disinterested chief officers and susceptibility to political whims”,” financial books and records are not properly kept”,” clerks have autonomous powers”. Content analysis indicate that most of the officers rated the financial management poorly because of lack of internal controls, the ineffectiveness and the lack o independence of the audit department, corruption, lack of independence and political interference from political wing, poor budgeting and lack of adherence t already set budgets, lack of capacity, skills and competence of finance officers, laxity in financial reporting among others. The local authority officers were requested to suggest recommendations for improvement of local authorities’ financial management practices. Some of thi suggested recommendations included; “| rarqmmand that all local arnthoritiec ta he ahcarhed hy cointy cavernment ta came iin with 3 very ctrango internal control cyvctam” ” Derentralizatinn ”
4.4.3: RELATIONSHIP BETWEEN FINANCIAL MANAGEMENT PRACTICE AND FINANCIAL DISTRESS
4.4.3: RELATIONSHIP BETWEEN FINANCIAL MANAGEMENT PRACTICE AND FINANCIAL DISTRESS
FIGURE 4.6: LINEAR RELATIONSHIP BETWEEN FINANCIAL DISTRESS AND FINANCIAL MANAGEMENT PRACTICES Regression analysis was conducted to empirically determine whether financial management practices were a significant determinant of financial distress in local authorities. Regression results in table 4.5 indicated the goodness of fit for the regression between financial management practices and financial distress is satisfactory. An R squared of 0.977 indicates that 97.7% of the variances in the financial distress are explained by the variances in the financial management practices. The relationship between financial management practices is negative and significant (b1=-0.916, p value, 0.000). This implies that an increase in the effectiveness of financial management practices by 1 unit leads to a decrease in financial distress by 0.916. The regression equation is as follows; Financial Distress = 22.995 - 0.916* Financial Management Practices
FIGURE 4.6: LINEAR RELATIONSHIP BETWEEN FINANCIAL DISTRESS AND FINANCIAL MANAGEMENT PRACTICES Regression analysis was conducted to empirically determine whether financial management practices were a significant determinant of financial distress in local authorities. Regression results in table 4.5 indicated the goodness of fit for the regression between financial management practices and financial distress is satisfactory. An R squared of 0.977 indicates that 97.7% of the variances in the financial distress are explained by the variances in the financial management practices. The relationship between financial management practices is negative and significant (b1=-0.916, p value, 0.000). This implies that an increase in the effectiveness of financial management practices by 1 unit leads to a decrease in financial distress by 0.916. The regression equation is as follows; Financial Distress = 22.995 - 0.916* Financial Management Practices
\nova results in table 4.6 indicated that there exists a significant difference in financial management practices between the three categories of financial listressed local authorities (F=378.79, P value=0.000). Group statistics in table 4.7 indicated that highly distressed local authorities have a significantly low nean score on financial management practices (7.74). Moderately distressed local authorities have a mean score of 12.68 for financial management practice vhile lowly distressed local authorities have the highest mean score for financial management practices (17.95). Table 4.8 indicated that financial manageme yractices differed significantly across the three levels of distressed local authorities. The findings imply that financial management practices contribute | inancial distress. TABLE 4. 5: MODEL SUMMARY AND PARAMETER ESTIMATES TABLE 4.6: DESCRIPTIVE FOR FINANCIAL MANAGEMENT PRACTICES
\nova results in table 4.6 indicated that there exists a significant difference in financial management practices between the three categories of financial listressed local authorities (F=378.79, P value=0.000). Group statistics in table 4.7 indicated that highly distressed local authorities have a significantly low nean score on financial management practices (7.74). Moderately distressed local authorities have a mean score of 12.68 for financial management practice vhile lowly distressed local authorities have the highest mean score for financial management practices (17.95). Table 4.8 indicated that financial manageme yractices differed significantly across the three levels of distressed local authorities. The findings imply that financial management practices contribute | inancial distress. TABLE 4. 5: MODEL SUMMARY AND PARAMETER ESTIMATES TABLE 4.6: DESCRIPTIVE FOR FINANCIAL MANAGEMENT PRACTICES
The results from the descriptive statistics, regression analysis and Anova indicate that financial management is a significant determinant of financial distress | local authorities. The findings are consistent with those of Boex and Muga (2009) Capalbo et al (2010), Carmeli (2008), Deal (2007), Frank and Dluhy (2003 Kloha, Weissert, and Kleine (2005),Watson, Handley and Hassett (2005) who confirmed that financial mismanagement contributes to financial distress in loc authorities.
The results from the descriptive statistics, regression analysis and Anova indicate that financial management is a significant determinant of financial distress | local authorities. The findings are consistent with those of Boex and Muga (2009) Capalbo et al (2010), Carmeli (2008), Deal (2007), Frank and Dluhy (2003 Kloha, Weissert, and Kleine (2005),Watson, Handley and Hassett (2005) who confirmed that financial mismanagement contributes to financial distress in loc authorities.
QUESTIONNAIRE
QUESTIONNAIRE
This Section is concerned with assessing whether financial management practices affects financial distress faced by local authorities in Kenya. Please mark (x) in the box which best describes your agreement or disagreement on each of the following statements.
This Section is concerned with assessing whether financial management practices affects financial distress faced by local authorities in Kenya. Please mark (x) in the box which best describes your agreement or disagreement on each of the following statements.
This Section is concerned with assessing the level of financial distress faced by local authorities in Kenya. Please mark (x) in the box which best describes your agreement or disagreement on each of the following statements.
This Section is concerned with assessing the level of financial distress faced by local authorities in Kenya. Please mark (x) in the box which best describes your agreement or disagreement on each of the following statements.
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