DETERMINANTS OF FINANCIAL SUSTAINABILITY OF PUBLIC UNIVERSITIES IN KENYA
Abstract
This study focused on establishing the possible determinants of financial sustainability of public universities in Kenya. The study was guided by three specific objectives; management of liquidity, financial investments and management of financial risk. The study used the correlational research approach and targeted public universities in Kenya which were chattered as of July 2014. A sample size of eighteen Kenyan public universities was used, the census sampling technique was used so as to have a proper representation and ensure appropriate response rate. The secondary data entailed the review of published Financial Statements covering a total of four years an equivalent of a complete academic cycle for regular courses in a public university. Data was analyzed descriptively and also using inferential statistics like ANOVA using the Stata program. Time series and panel data technique were used to interpret the data which was then presented in diagrams, figures, graphs and tables. Multiple linear regression model was then fitted to give possible conclusions on the effect of independent variables on the dependent variable. The study results indicated that, management of liquidity, financial investments and management of financial risk showed an effect on financial sustainability. This study would be helpful to the government of Kenya in coming up with strategies to employ in enhancing financial sustainability in Public Universities especially at that period of time when the education sector was adversely affected by the Corona pandemic. Policy recommendations include; sound structures for management of financial risks and cost cutting measures be put in place. Review of existing policy of funding to match the increased spending brought about by the increasing wage bill and consider reinstating the capital grants for capital development projects. Investment policy to be revised to make provisions for funding revenue generating ventures that can play a complementary role as a source of internal funding that would later enhance cash flows in the foreseeable future.
Key Words: Liquidity Management, Financial Investments, Financial Risk Management
CITATION: Minyoso, J. (2020). Determinants of financial sustainability of public universities in Kenya. The Strategic Journal of Business & Change Management, 7(3), 97 – 111.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i4.1779
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