INFLUENCE OF BUDGETING, DISBURSEMENT AND UTILIZATION OF FUNDS, FINANCIAL REPORTING, MONITORING AND EVALUATION ON PERFORMANCE OF CDF FUNDED PROJECTS IN WESTERN REGION, KENYA

Abstract

Many CDF-funded projects in Western Kenya remain incomplete or poorly executed, raising concerns about the effectiveness of fund management. While funds are disbursed annually to support local development, the Performance of these projects often falls short. Existing studies have focused broadly on public finance management, but little empirical research has examined how specific fund management practices influence project outcomes under the CDF model. The main aim of the research was to determine the influence of fund management practices on the Performance of CDF-funded projects in the Western Region. The specific Objectives of the study were to assess the influence of budgeting on Performance, examine the effect of disbursement and utilization of funds on Performance, evaluate the influence of financial reporting on Performance and establish the influence of monitoring and evaluation on Performance of CDF-funded projects in the Western Region. The study was guided by public budgeting theory, agency theory, stewardship theory and public finance management theory. This study employed a correlational research design. The study targeted 825 respondents comprising 33 project managers, 165 project management committee (PMC) members, 231 NGCDF committee members, 33 Finance Officers in the NG-CDF office, 33 Sub-County Monitoring and Evaluation Officers and 330 Beneficiaries of the CDF projects from the 33 Constituency Development Fund (CDF) offices across Western Region. The study employed stratified random sampling to select participants. Both descriptive and inferential statistics were used to analyze the data. Regression analysis showed that budgeting, disbursement and utilization of funds, financial reporting and monitoring and evaluation had a significant effect on the performance of CDF with a coefficient .673, .391, .497 and .582 respectively. The study depicted that 69.1% of the variation in the performance of CDF-funded projects is explained by the four independent variables. The study concluded that budgeting, disbursement and utilization of funds, financial reporting and monitoring and evaluation had a positive and significant effect on the performance of CDF-funded projects in western Kenya. The study recommended that project planners and county officials ensure that all CDF project budgets are prepared based on accurate market prices and that projects are implemented strictly according to approved budgets. Project managers and county officials ensure that all funds are utilized promptly within the designated financial periods. 

JEL: H72 – State and Local Budget and Expenditures; H61 – Budget; Budget Systems; H83 – Public Administration; Public Sector Accounting and Audits; H76 – State and Local Government: Other Expenditure Categories; O22 – Project Analysis; R58 – Regional Development Policy