Financial Control Practices and Financial Sustainability of Non Governmental Organization in Garissa County, Kenya

Abstract

Purpose: The current study sought to establish how financial control practices influences financial sustainability of Non-Governmental Organization in Garissa County, Kenya. The study specifically sought to establish how financial reporting, financial monitoring, financial audits and financial risk assessment influences financial sustainability of NGOs.
 Methodology: The study was anchored on the following theories: Agency Theory, Liquidity Trade-Off Theory, Cash Management Theory And The Rent Theory of Profitability. The study employed a descriptive survey research design and targeted 50 Non-Governmental Organizations operating in Garissa County. The unit of observation comprised of one finance manager and one operational manager from each of the NGO. Both primary and secondary data were used in the study. Structured questionnaires were used in collecting the data. The study employed both inferential and descriptive statistics to analyze the collected data. Both SPSS software and MS Excel was used in generating the statistics. The study conducted a pilot study in 10 NGOs from Wajir County to assess the reliability and validity of the data collection instrument. The results of the study were presented in form of figures and tables. 
 Results: The results of the study revealed that financial reporting, financial monitoring, financial audits and financial risk assessment impacts financial sustainability of NGOs to a positive and significant level as shown by Beta value of 0.317, 0.213, 0.447 and 0.376 respectively. This implies that increase in one unit of each of the variables results to an increase in the financial sustainability levels of NGOs with the respective beta values.
 Unique contribution to theory, policy and practice The study recommended that there is a need for the NGOs operating in Garissa County to enhance their financial reporting practices, financial monitoring practices, financial audit practices and financial risk assessment practices since the practices bears a positive and a significant effect on financial sustainability of the organization.