Budget Management Practices and Controls on Effective Management of Finances in Public Universities in Kenya

Financial management is a critical function in organizations success. As a result, institutions that manage their finances well have higher chances of success. Universities are supposed to be centers of excellence in teaching and practice. However, financial management practices in public universities in Kenya remains a challenge owing to a number of indicators recently manifested by the office of Auditor general.  Universities were found to be operating on negative working capital, fraud, excessive outstanding fees, excessive borrowing and uncontrolled capital expenditure. This study therefore sought to assess how budget management practices and controls affects financial performance of Public Universities with campuses in Nakuru Town. Explanatory research design was used. The target population comprised of 328 finance officers, accountants and accounts clerks from five public universities with campuses in Nakuru Town. From this a sample of 76 finance staff was selected proportionately from each University. Data was then elicited from selected respondents using structured questionnaires. The study revealed that financial performance of public universities was significantly affected by the extent to which budget management practices were upheld, and the financial controls in place.  There was less emphasis placed on external audits and the implementation of audit reports as well as risk management.