Financial Management Practices and Growth of Public Hospitals in Nyeri County, Kenya

Abstract

The provision of health care is among the social pillars in the vision 2030. The health sector has been characterized by many challenges ranging from recent strikes by health workers, poaching of workers by private hospitals and health workers looking for greener pastures outside the country because of poor management of the sector and poor infrastructure. Despite the support from the government, public hospitals in Nyeri County are straining to meet their financial obligations. Challenges ranging from inability to meet daily expenses, delayed payment of workers, delayed national government reimbursements and diminishing patient’s expectations. The objectives of the study were to investigate how budgeting, internal control systems, financial tracking, and waiver affect financial management practices and growth in government hospitals. The management and movement of funds as aligned to the budget is critical for a public hospital’s growth. But experience and exposure in finance management reveal that the financial management processes of public hospitals are generally weak and dominated by conditions of resource scarcity vis-a-vis the ever-increasing agenda of development activities on which such funds could be spent. The study used a descriptive survey design. The study targeted 202 respondents who were the employees of the four county public hospitals under study. Stratified simple random sampling was used, and a sample of 101 respondents was selected. The study used both primary and secondary data sources for data collection. Data was analyzed by the aid of the Statistical Package for Social Studies (SPSS) computer software through frequencies, means, percentages, correlation coefficient as well as regression method. Tables and graphs were used for data presentation. The findings indicated that there has been an increase in the number of operational cost in majority of the hospitals. Majority of the public hospitals experience a lot of challenges and delays before budget is approved. The findings indicated that there are several steps that should be followed before authorization of any payment in hospital. The results presented poor control of revenue in the hospital and lack of proper coordination and monitoring. The study findings indicate that financial tracking procedures are hard to follow and that the procedures are not very clear to all the employees. Majority of the respondents argued that there is lack of management support when it comes to financial tracking in the public hospitals in Nyeri County. The relationship between audit practices and growth of public hospitals is strong and positive and the relationship between financial tracking and growth of public hospitals is weak negative and significant. The study concludes that the relationship between audit practices and growth of public hospital was positive and significant and that a positive change in audit practices would result to a positive change in the growth of public hospitals.  The study recommended that sufficient funds to the public hospitals should be disbursed early enough to enable proper planning and budgeting. The study also recommended that employees working in the public hospitals in Nyeri County should consider financial tracking as a daily task and that there is need for the County officials to be trained on the audit requirements and audit procedures.