EFFECTS OF RISK ASSESSMENT ON FINANCIAL ACCOUNTABILITY AS EVIDENCED IN NATIONAL GOVERNMENT CONSTITUENCIES DEVELOPMENT FUND IN KENYA

The objective of National Government Constituencies Development Fund is to promote human and infrastructural development at the community and constituency levels. The fund is expected to be operated with the highest level of transparency, probity, propriety, and accountability. Despite the elaborate measures put in place by the government to ensure transparency, financial accountability in many constituencies is still not as expected. Studies done on internal controls and financial accountability have been in other sectors such as public Universities, the ones done in constituencies have concentrated on the performance of county projects and have looked at only specific constructs of internal controls. The aim of the study was to examine the effect of risk assessment on financial accountability of national Government Constituencies development fund in Kenya. The study was structured on; agency theory and accountability theory. A correlation research design was adopted. The target population of the study was 1160 respondents while the sample population was 288 respondents consisting of; 72 committee members, 72 sub-county accountants, 72 fund account managers, and 72 internal auditors. Primary data was obtained by use of a questionnaire while secondary data was obtained from Auditor General’s Reports and financial statements of the NG-CDF’s. Cronbach Alpha was used to test reliability. Expert analysis and confirmatory factor analysis were used to assess Validity. Data was analyzed using both descriptive and inferential statistics Inferential statistics consisted of correlation analysis and simple linear regression analysis. A pilot test was carried out using 29 respondents. Cronbach Alpha was used to test the internal consistency of the questionnaire. All the constructs had indicators of above 0.7 confirming reliability. KMO and Bartlett’s tests were carried out to test validity. All constructs loaded values of above 0.4 thus confirming validity. It was established that there exists a strong and positive association exists between risk assessment and financial accountability evidenced by an r of 0.707 for risk assessment. It was recommended that their close scrutiny of all risk-prone activities should be analyzed.

JEL: G10, G20, G32

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