MODERATING EFFECT OF AUTOMATED REVENUE COLLECTION SYSTEM ON THE RELATIONSHIP BETWEEN BUDGETING PRACTICES AND FINANCIAL PERFORMANCE OF COUNTY GOVERNMENTS IN KENYA
Abstract
Purpose of the study: The purpose of this study was to establish the moderating effect of automated revenue collection systems (ARCS) on the relationship between budgeting practices and the financial performance of county governments in Kenya.
Research Methodology: A pragmatic research philosophy and an ex-post facto research design were adopted for this study. The target population for the study was all 47 county governments in Kenya. A sample of 45 county governments in Kenya was selected and the controllers of budget from each county were invited to participate in the study. Data were collected using questionnaires. Both inferential and descriptive statistical analyses were conducted, including regression and correlation analyses.
Findings: The study found that ARCS significantly moderated the relationship between budgeting practices and financial performance of counties (R² = 0.522, F = 30.26, β = 0.384, t = 3.728, p < 0.05). Notably, the introduction of ARCS as a moderating variable changed the R² from 0.437 to 0.522.
Conclusion: The study concluded that ARCS substantially moderate the relationship between budgeting practices and financial performance. Consequently, the study recommends that county governments in Kenya should adopt ARCS to enhance their financial performance. Future research in the private sector and National government in Kenya is suggested to facilitate the comparability of findings.
Recommendation: The study recommends that county governments in Kenya should adopt ARCS to enhance their financial performance. ARCS can help to improve the efficiency and effectiveness of revenue collection, which can lead to increased revenue and improved financial performance.
Keywords: Moderating Effect, Automated Revenue, Collection System, Budgeting Practices, Financial Performance
Purpose of the study: The purpose of this study was to establish the moderating effect of automated revenue collection systems (ARCS) on the relationship between budgeting practices and the financial performance of county governments in Kenya.
Research Methodology: A pragmatic research philosophy and an ex-post facto research design were adopted for this study. The target population for the study was all 47 county governments in Kenya. A sample of 45 county governments in Kenya was selected and the controllers of budget from each county were invited to participate in the study. Data were collected using questionnaires. Both inferential and descriptive statistical analyses were conducted, including regression and correlation analyses.
Findings: The study found that ARCS significantly moderated the relationship between budgeting practices and financial performance of counties (R² = 0.522, F = 30.26, β = 0.384, t = 3.728, p < 0.05). Notably, the introduction of ARCS as a moderating variable changed the R² from 0.437 to 0.522.
Conclusion: The study concluded that ARCS substantially moderate the relationship between budgeting practices and financial performance. Consequently, the study recommends that county governments in Kenya should adopt ARCS to enhance their financial performance. Future research in the private sector and National government in Kenya is suggested to facilitate the comparability of findings.
Recommendation: The study recommends that county governments in Kenya should adopt ARCS to enhance their financial performance. ARCS can help to improve the efficiency and effectiveness of revenue collection, which can lead to increased revenue and improved financial performance.
Keywords: Moderating Effect, Automated Revenue, Collection System, Budgeting Practices, Financial Performance
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