Adan Abdinur Edow, Prof. Willy Muturi


Background: The purpose of this study was to explore the influence of internal financial control systems on resource utilization in County Governments in Kenya. The study was guided by the key theories including: Resource Based View Theory and Agency theory.

Methodology: The study adopted a descriptive survey research design. The unit of analysis of this study were all the 47 County Governments in Kenya including the office of the auditor general and the controller of budget. This study used a data collection sheet to collect secondary data between the years 2018 to 2022 and was obtained from the reports done annually by the auditor general and controller of budget. The study used STATA in analyzing the data. Descriptive statistic such as means, standard deviations, maximum and minimum were used in analyzing the data. Diagnostic tests were also performed on the data to analyze its normality, multicollinearity, heteroscedasticity and serial correlation. The study utilized inferential statistics such as panel data analysis and therefore, Hausman test was performed in order to determine the most appropriate model of the current study.

Findings: The study findings indicated that auditing had an insignificant influence on the utilization of resources (P>0.05) while budgeting had a significant influence on the utilization of resources in all county governments in Kenya (p<0.05).

Recommendations: The study recommends that county governments to enhance efficiency and accuracy, they should invest in automation of all financial transactions so as to weed out corruption. For this to be realizing, enough functional computers and other relevant machines should be purchased thus improving the utilization of resources. The County governments should also ensure that financial policies and procedures which provide guidelines on how to go about financial matters are properly implemented so as to boost resource utilization.

Key words: Auditing, Budgeting, Resource Utilization, Internal financial control systems

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