EFFECT OF FUND MANAGEMENT PRACTICES ON THE FINANCIAL PERFORMANCE OF CDF FUNDED WATER PROJECTS IN KENYA: A CASE OF MOLO CONSTITUENCY, NAKURU COUNTY, KENYA

Abstract

Kenya‟s CDF was a concept implemented in 2003 through the Act of parliament, whose aim was to address the challenges at grassroots level through the provision of funds to empowerment of community-based projects in all constituencies of Kenya. The initiative targeted development projects at the constituency level aimed at alleviating poverty and addressing imbalances in regional development based on decentralization of public resources. The principle behind devolution appears to have been widely accepted throughout Kenya today. Increasingly however, was the issues on Management of fund accrued from CDF funded projects. The study used cross sectional survey design, which emphasized on the measurement and analysis of relationships between the variables. The study used mostly primary sources of data. The CDF funded project managers interviewed to obtain primary data. Data was analyzed using SPSS software (SPSS version 19.0) with components, descriptive statistics: mean median, tables, and standard deviation. Correlation and regression analysis measured the nature of the relationship between financial performance and the practices of fund management. The study findings were that, there was a strong positive relationship between the fund management practices. The variability of financial performance attributed to changes in efficiency of RM, IM, and CM practices was 80.6%. This has a general implication that efficient fund management practices have a positive effect on the financial performance of CDF funded projects in Kenya and therefore FMP should be embraced as a policy