EFFECTS OF BUDGETARY ALLOCATIONS ON FINANCIAL SUSTAINABILITY OF PUBLIC HEALTH FACILITIES IN NAKURU WEST SUB COUNTY, KENYA

Abstract

Universal healthcare constitutes one of the fundamental goals enshrined in the Vision 2030. Indeed, the government is presently striving to ensure as many Kenyan citizens as possible have access to affordable health services. However, the public health sector has been facing an array of problems. These range from shortage of drug supplies, lack of necessary medical equipment, to intermittent industrial strikes and go-slows especially in devolved healthcare providers. The foregoing challenges can be traced to skewed and/or inadequate budgets which have compromised financial sustainability of the health facilities. The general objective of this study was to analyze how budgetary allocations affect financial sustainability of the public health sector in Kenya paying closer attention to health facilities in Nakuru West Sub-County. More precisely, the study determined the effect of financial sources, budgetary allocation criteria, stakeholder involvement, and budgetary variance on financial sustainability of the aforestated facilities. The pecking order theory, theory of soft budgetary constraints, stakeholder theory, and Musgrave‟s theory of public expenditure guided the study. Hitherto empirical studies touching on budgetary allocations and financial sustainability particularly in the health sector have been reviewed and critiqued with the resultant research gaps outlined. The study employed descriptive research design and quantitative approach. A total of 147 finance, accounting and management staff working with public health facilities in Nakuru West Sub-County constituted the study population. A sample of 73 respondents was drawn from the accessible population using stratified random sampling technique. A structured questionnaire was employed to facilitate collection of data. A pilot test was carried out to facilitate determination of both validity and reliability of the research questionnaire. The collected data were processed and analyzed with the aid of the Statistical Package for Social Sciences software. Descriptive and inferential statistics were used in the analysis. The null hypotheses were tested at 95% confidence level. The study findings were presented in form of tables. Necessary ethical issues were considered prior, during, and after carrying out the study. The study established that stakeholders involvement had the strongest correlation with financial sustainability (r = 0.685). Financial sources, stakeholder involvement, and budgetary variance were significantly correlated with financial sustainability (p < 0.05). However, the relationship between budgetary allocation criteria and financial sustainability was found to be weak and not statistically significant (r = 0.173; p > 0.05). Moreover, it was revealed that budgetary allocations explained 58.5% of financial sustainability of public health facilities in Nakuru West SubCounty. All the null hypotheses were rejected except the second one. The study concluded that various aspects of budgetary allocations including financial sources, stakeholder involvement, and budgetary variance, are crucial in enhancing financial sustainability of public health facilities. It has been recommended that there should be financial prudence at the facilities in order to ensure financial sustainability and sustained service delivery. It is recommended that that the health facilities uphold the sound budget planning mechanisms.