Understanding How Public Finances Are Spent Under Devolved System of Government: A Case of Constituency Development Funded Projects in Kasipul Constituency, Kenya

Abstract

Devolved system of government in Kenya was introduced in 2010, when a new constitution was promulgated. This drastically changed the way that public funds are allocated, spent and monitored by oversight institutions. Changes in governance structures envisaged devolution as a panacea that would ensure good governance, equity and transparency in the utilization of finances. The study used a case study of a devolved development fund that is implemented by the national government, the Constituency Development Fund (CDF) in Kasipul constituency, Homa-bay County to understand public finance management under devolved system of government. The study employed mixed methods research design involving both quantitative and qualitative data. A total of 400 respondents were sampled using multi staged proportionate random sampling techniques involving project beneficiaries, project managers, local governmental officials and the National Government Constituency Development Fund committee members. Data was collected using questionnaires, focus group discussions and interview guides. Quantitative data was analyzed using statistical techniques with the help of STATA version 14. The study found that project financing had a statistically significant and positive effect on the effective management of NG-CDF funded projects. The estimated coefficient of project financing in the model was found to be 1.436 with a statistically significant.  It’s therefore recommended that existing policies should be strengthened and a framework to improve the effectiveness of project management by increasing the levels of project financing. The existing financing model should be reformed to avoid the negative influence on the implementation of beneficiary projects to avoid systematic fund transfer delays.