EXAMINING THE FINANCIAL RISK MANAGEMENT OF DONOR FUNDS: CASE OF MINISTRY OF HEALTH IN ZAMBIA

Autori

  • Zeleniya Angela Banda Graduate School of Business, ZCAS University, Lusaka, Zambia
  • Richard Mulenga Faculty of Economics, ZCAS University, Lusaka, Zambia

DOI:

https://doi.org/10.46827/ejefr.v8i2.1679

Parole chiave:

financial risk management, donor funds, whistle-blower, anti-corruption practices, cooperating partners

Abstract

This study examines the financial risk management of donor funds using the Ministry of Health (MOH) in Zambia as a case study. The study employs an exploratory case study methodology on a sample of 224 MOH employees. Zambia, being a developing country, significantly relies on donor funds to support its healthcare sector. Prudent management of donor funds is crucial for the sustained delivery of quality healthcare services. However, there has been concerns regarding the financial risk management practices at the MOH in the efficient utilization and accountability of donor funds. From the literature review, it seems no study has been done regarding the financial risk management of donor funds focusing on the MOH in Zambia. Therefore, this study fills this gap. The study findings seem to show evidence of the misappropriation of donor funds exhibited by misallocation of donor funds to unplanned projects or activities. The misappropriations of donor funds seem to be amplified by a lack of strategic planning, lack of coordination, and the absence of effective monitoring and evaluation systems. Additionally, fraud and corruption posed significant risks to donor funds at MOH. Therefore, to mitigate the risks, the study recommends that robust anti-misappropriation measures, enforcement of due diligence on implementing partners, a thorough review of procurement processes, and regular monitoring and evaluation of donor-funded projects be strengthened at the MOH in Zambia. Whistleblower protection and reporting mechanisms should be promoted to help detect and deter fraudulent activities at this Ministry.

 

JEL: H51, I18, O23

 

Article visualizations:

Hit counter

Biografie autore

  • Zeleniya Angela Banda, Graduate School of Business, ZCAS University, Lusaka, Zambia

    Ms. Zeleniya Angela Banda holds a Professional Accountancy qualification from the Association of Chartered Accountants (ACCA), is a fellow of ACCA (FCCA) and a fellow of Zambia Institute of Chartered Accountants (FZICA). She is currently working with the Ministry of Health in Zambia (MOH) on a Ministry of Health /Centres for Disease Control and Prevention Cooperative Agreement (MoH/CDC CoAg) as a Financial Specialist. Ms Banda is a certified financial specialist with 15 years of work experience in the private and public sectors. At the time of this publication, Ms Banda was a graduate student in the Graduate School of Business preparing to defend her thesis for the award of a Master of Science (MSc.) degree in Financial Risk Management awarded by the ZCAS University. Ms Banda’s research interests include financial risk and analysis, corporate governance, and grants management, among others.

  • Richard Mulenga, Faculty of Economics, ZCAS University, Lusaka, Zambia

    Dr. Richard Mulenga holds a Doctorate degree in International Economics. He is currently a lecturer and researcher in the Department of Economics at ZCAS University, where he lectures graduate Econometrics, Economics and Public Finance, among others. Dr. Mulenga has more than 10 years of experience in the financial industry and more than 7 years as an independent and collaborative researcher with extensive publications of peer-reviewed articles and book chapters in reputable journals such as the American Journal of Economics (AJE). Dr. Mulenga’s research interests include the digital economy, carbon markets, international trade, and financial inclusion. Details of Dr. Mulenga’s publications can be found at the following academic networks:

    Google Scholar, Academia.edu

Riferimenti bibliografici

Auditor General of Zambia, Ministry of Finance. (2021). Report of the Auditor General on the Accounts of the Republic of Zambia for the Financial Year Ended 31st December 2021. Lusaka, Zambia.

Auditor General of Zambia, Ministry of Finance. (2022). Report of the Auditor General on the Accounts of the Republic of Zambia for the Financial Year Ended 31st December 2022. Lusaka, Zambia

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101

Brown, M., & Smith, J. (2018). The Role of Transparency in Financial Risk Management of Donor Funds: Evidence from Nonprofit Organizations. Journal of Business Research, 109, 260–270.

Chomba, C., & Van Belle, J. (2017). Public Financial Management Reform and The New Public Management Orientation in Zambia: accountability in the healthcare delivery system. African Journal of Public Affairs, Economics and Development, 1(1), 1-8.

Davis, J., & Thompson, M. (2016). Transparency and accountability in the financial risk management of donor funds: Perspectives from nonprofit leaders. Nonprofit and Voluntary Sector Quarterly, 43(3), 640–660.

Davis, M., & Wilson, E. (2016). Transparency and accountability in the financial risk management of donor funds: A cross-sector analysis. Journal of Development Accounting, 15(1), 19–39. https://doi.org/10.1177/0887247613513142

Donaldson, L. (1996). The normal science of structural contingency theory. Journal of Management Studies, 33(6), 803–819.

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.

Garcia, M., & Smith, J. (2021). Improving Transparency in the Financial Risk Management of Donor Funds: Lessons from International Nonprofit Organizations. Journal of Financial Management in Nonprofit Organizations, 26(3), 45–62.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.

Johnson, L., & Anderson, R. (2015). The Impact of Transparency on Donor Confidence in Financial Risk Management: Evidence from Nonprofit Organizations. Nonprofit Management & Leadership, 26(1), 27–43.

Johnson, S. (2019). Transparency and Accountability in the Financial Risk Management of Donor Funds: A Comparative Analysis. Journal of Financial Accountability, 10(2), 123–137.

Kusevija, N., & Pejic-Bach, M. (2019). A conceptual framework for financial risk assessment and mitigation in public institutions. Financial Theory and Practice, 43(4), 471-497.

Martinez, L., & Wilson, D. (2020). Accountability Mechanisms in the Financial Risk Management of Donor Funds: A Cross-Country Analysis. Journal of Financial Accountability, 20(3), 45-67.

Mumbi, C. & Masebo, L. (2015). The mismanagement of donor funds in Zambia's education sector. Development Southern Africa, 32(4), 556–571.

Lukio, O. O. (2018). Financing conditions and effective donor funds utilization in the health sector in Nyanza Region, Kenya [master’s thesis, Jomo Kenyatta University of Agriculture and Technology]. http://ir.jkuat.ac.ke/

Patton, M. Q. (2015). Qualitative Research & Evaluation Methods: Integrating Theory and Practice. Thousand Oaks, CA: Sage Publications.

Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. Harper & Row.

Roberts, M., & Adams, S. (2014). Promoting accountability in the financial risk management of donor funds: A case study analysis. Journal of International Accounting Research, 13(2), 1–24.

Saunders, M., Lewis, P. & Thornhill, A. (2012). Research Methods for Business Students, 6th Ed., London: Pitman.

Smith, D. M., & Wiseman, R. L. (2016). Managing financial risk in nonprofit organizations: A framework and guidelines. Journal of Nonprofit & Public Sector Marketing, 28(1), 1–22. https://doi.org/10.1080/10495142.2016.1181321

Smith, D. M., & Wiseman, R. L. (2018). Financial Risk Management in Nonprofit Organizations: An NGO case study. In Accounting 43(1), 113-134. Routledge

Smith, D. M., & Wiseman, R. L. (2019). The Impact of Financial Risk Management on Donor Confidence: Evidence from Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly, 48(3), 600–623.

Smith, D. M., & Wiseman, R. L. (2020). Financial risk management in nonprofit organizations: A case study analysis. The European Journal of Development Research, 31(3), 604-619

Smith, D. M., & Wiseman, R. L. (2021). Managing financial risk in nonprofit organizations: Lessons from the field. Critical Perspectives on Accounting, 64, 102070.

Smith, D. M., & Wiseman, R. L. (2022). Financial Risk Management in Nonprofit Organizations: A Review of the Literature. Accounting, Auditing & Accountability Journal, 19(3), 349-376

Smith, L., & Johnson, D. (2018). Financial management practices in the health sector of African countries: A systematic literature review. International Journal of Health Planning and Management, 33(1), e1-e18.

Smith, S. (2012). Financial risk management in the public sector. Public Money & Management, 32(3), 225–230.

Thompson, L. (2017). Enhancing Accountability in the Financial Risk Management of Donor Funds: Lessons from the Field. Accounting, Organizations and Society. 8(7), 55-72

Wilson, E., & Brown, J. (2022). Transparency and Accountability in Financial Risk Management: A Systematic Literature Review. Journal of Financial Risk Management, 9(3), 45-67.

Yamane, T. (1967). Statistics: The Measurement of Sampling Errors in Sampling Surveys. Publisher: Harper and Row, New York.

Yin, R. K. (2017). Case study research and applications: Design and methods. Thousand Oaks: SAGE Publications Inc.

Yin, R.K. (2014). Case study research design and methods, 4th Ed., Thousand Oaks: Sage Publications, Inc.

Zietlow, J., Hankin, J. A., & Seidner, A. (2022). Financial Risk Management in Nonprofit Organizations: A Comprehensive Guide. International Journal of Finance, 8(4), 77-95.

Dowloads

Pubblicato

2024-04-12

Fascicolo

V. 8 N. 2 (2024)

Sezione

Articles