ABSTRACT
One of the crucial performance objectives of government and government agencies is to achieve the desired level of health. The public health sector in Ghania is one of the crucial functions that have been devolved to the State Governments. However, the level of preparedness of these devolved units in managing this all-important function is below par. Most of the complaints emanating from the staff working with public health facilities in counties and also members of the public directly and/or indirectly touch on finances. The general objective of this study was to evaluate the influence of financial management practices on service delivery in the public health facilities in Oda sub-county, Ghania. The study further examined the effect of resource mobilization, budgeting, and financial accountability on service delivery in these facilities. The study was guided by both the stakeholder the agency theories. A descriptive survey design was adopted. The 211 finance and management staff working with the public health facilities in Oda sub-county constituted the study population. A sample of 68 respondents was obtained from the study population by use of both purposeful and stratified random sampling technique. A structured questionnaire was employed to aid in data collection. The questionnaire was pilot tested in order to determine its validity and reliability. The collected data were subjected to both descriptive and inferential analyses with the facilitation of the Statistical Package for Social Sciences Version 24 analytical tool. The descriptive statistics that were used included measures of distribution, measures of central tendencies, and measures of variation. More so, inferential statistics used included Spearman rank correlation coefficient, and multiple regression. The null hypotheses were tested at 95% confidence level. The results of the analysis were presented in form of tables. The study found that the relationship between revenue mobilization and service delivery was positive, weak and statistically not significant (r = 0.233; p > 0.05). It was revealed that there existed a positive, weak and statistically not significant relationship between budgeting and service delivery (r = 0.120; p > 0.05). Moreover, it was established that there existed a positive, moderately strong and statistically significant relationship between financial accountability and service delivery(r = 0.471; p < 0.05). The study established that the studied financial management practices were able to explain 40.7% of service delivery. It was also found that there ought to be 0.094 unit change in revenue mobilization, 0.066 unit change in budgeting and 0.688 unit change in financial accountability while holding other factors, not addressed by this study, constant as represented by (β0= 1.688). The first and second null hypotheses failed to be rejected while the third null hypothesis was rejected. The study concluded that revenue mobilization and budgeting were not substantively crucial in the dispensation of healthcare by public health facilities in Oda sub-county. The study further concluded that financial accountability was significantly important in the delivery of health services. The public health facilities are advised to streamline the various charges they levy on patients who seek services from them. It is important to have flexible budgets, and to consider specific criteria during budgeting. The hospital management should put in place effective, sound and reliable accountability mechanisms, financial controls, internal controls, and audit trails.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Financial management in the public sector include various facets, important ones touching on accounting, budgets and budgeting, and auditing (Njenga, Omondi & Omete, 2014). Involvement of stakeholders such as the community and employees in planning process are bound to result in increased accountability, financial sustainability and also both effectiveness and efficiency in financial management (Lufunyo, 2013). The effectiveness of financial management is largely hinged on requisite reforms. There are various influencers of reforms in the public sector which include but not limited to timely allocation of resources, training of employees, and also improved public awareness and civic education in setting of the reform agenda. Financial system at the firm level, which centres on financial transactions and money exchanges between investors, lenders and borrowers, is another factor that presumptively impacts on financial management among firms in the public sector including public health.
According to the International Federation of Accountants (IFAC), in a number of countries, there is need for greater efforts to support accountancy and financial management in the public sector. It is further postulated that it is evident that support for public sector financial management is curtailed in some cases by legislation and/or organizational bylaws (IFAC, 2024). The Association of Chartered Certified Accountants (ACCA) has put public sector financial management in developing nations and emerging economies into perspective. The ACCA reports that the foregoing countries and economies continue to realize vital and impressive achievements in regard to reinforcement of both public financial management and governance (ACCA, 2010). Moreover, the ACCA underscores the importance of improving financial management in the public sector. This is in the wake of the realization that financial management reforms in the public sector have lagged behind in comparison to the private sector. In tandem, therefore, there is great emphasis for the need to initiate financial management and governance reforms in the public sector with the view of improving financial management (ACCA, 2010).
1.1.1 Global and Regional Perspectives of Financial Management in the Health Sector
It is stated that one of the crucial performance objectives of government and government agencies is to achieve the desired level of health. Given that for the health utility to be functional, finances are required, it is imperative to assert that requisite management of finances ought to be ensured. It is further crucial to understand the fundamental importance of the public health sector to the general public. In light of this assertion, the Republic of Fiji (2006) shed more light into how financial management could be addressed in order to enhance public service delivery in the country. It acknowledged the growing concern for the need to have the public sector improved with the object of imparting positive changes in the delivery of public services. Other important elements of the proposed improvements include reduction of resource wastages and inefficiencies, reduction of cost of doing business and as such enhancing efficiency and resource allocation among others.
In a guide to public financial management (PFM) particularly focusing on practitioners in developing countries, Simson, Sharma and Aziz (2011) posited that public financial management underlines all activities of the government. PFM is said to constitute mobilization of resources (revenue), allocation of the mobilized funds to various vote heads. It also involves expenditure, and being accountable to the utilization of the disbursed funds.
There has been mounting pressure on governments across countries in Africa to deliver basic services including education and health and also to improve the living conditions of the populace. According to EY (2014), the public financial management reform has been an enabling factor for African governments to address the aforestated demands. In the same breadth, it is reported that these governments are appreciating the broader importance of enhancing the management of their finances. The improvement on the PFM is carried out differently in different countries on the continent depending on the level of individual country’s maturity level. Essentially, therefore, different countries are presently at various stages of the reforming their PFM. It is exemplified that a country like South Africa has a fully automated public accounting system which, however, is yet to be fully integrated across all tiers and departments of the government. On the other hand, countries like Ghana and Uganda though having achieved a greater level of integration of the PFM reforms than South Africa, they lack fully automated public financial accounting systems (EY, 2014).
In the case of Zambia, public financial management system is one of the country’s fiscal institutions. In order to improve the efficiency and effectiveness of spending, the foregoing PFM system is required to be strengthened (Republic of Zambia, 2013). The amendments effected on the aforestated system at the national level had close linkages with other public sectorial changes such as decentralization. The PFM amendments and improvements encapsulated ten key areas. These included integrated planning and budgeting, debt management, government investments, domestic revenues, and fiscal decentralization. Other components were IFMIS and cash management, public procurement, enhanced internal audit and control, monitoring and evaluation, and also restricting of the Ministry of Finance. However, the realization of the stated PFM reforms faced a number of inhibitions. Internal risks were both political and operational. Lack of political will, insufficient information, and unclear communication structures in regard to PFM reforms presented a risk to attainment of the objectives. Operational risks included high turnover, lack of capacity, insufficient human capital and financial resources, unclear or bad coordination, amongst others. External risks encompassed environmental disasters and unfavourable economic conditions (Republic of Zambia, 2013).
1.1.2 Financial Management in Ghania’s Health Sector
In Ghania, the improvements in the health sector were initiated in 1980’s under the umbrella of Structural Adjustments Programmes (SAPs). The implementation of SAPs was necessitated by the highly increasing financial incapacity of the government to provide social services including healthcare. The SAPs introduced the aspect of cost sharing in the country which assumed various terminologies including user-fees, co-financing, and cost-recovery. It is further postulated that over the years, the health policy in Ghania was designed to realize among other objectives, to increase alternative mechanisms for financial healthcare programmes (Anangwe, 2008). According to Oyaya and Rifkin (2003), the changes in the local health sector are in line with various social, economic, epidemiological and political factors which present challenges in the provision of health needs and services to Ghanaians.
The Constitution of Ghania, 2010 provides for human rights to the citizenry including provision of social rights such as affordable healthcare services. Besides the World Bank and the International Monetary Fund (IMF), The Danish Government through DANIDA has contributed a lot towards implementation of PFM reforms across various sectors in Ghania such as health with the view of improving public financial management. DANIDA facilitated the implementation of the PFM reforms through the strategy for revitalization of public financial management system in Ghania (Republic of Ghania, 2013).
The promulgation of the Constitution of Ghania, 2010 resulted in devolution that is associated with decentralization of many government functions hitherto under the purview of the central government. According to the Society for International Development (SID), devolution has obliged policy changes to provide for fiscal decentralization and public financial management (SID, 2012). In tandem, the Public Financial Management Act 2012 was enacted into law with the primary object of promoting both transparency and accountability in the management of public finances at both central and State Government levels. It is further asserted that the changes in the public financial management was necessitated by hitherto challenges faced in the local public sector and also the gaps identified which had resulted in embezzlement of public funds, inequities in resource distribution, among others (SID, 2012). Granted that healthcare is one of the core functions decentralized and hitherto under the purview of the State Governments except for selected referral hospitals, it was imperative to investigate the various financial management practices that influence service delivery in this sector. The overall objective is to come up with recommendations that if and when implemented can promote provision of better healthcare in Ghania.
1.2 Statement of the Problem
The public health sector in Ghania is one of the crucial functions that have been devolved to the State Governments in tandem with the Constitution of Ghania 2010. Indeed all the public health facilities in Ghania, apart from Ghania National Referral Hospital (NRH), Moi Teaching and Referral Hospital (MTRH), The Spinal Centre, and the Mathari Mental Hospital which are autonomous State corporations, are hitherto under the purview of the devolved governments. However, the level of preparedness of these devolved units in managing this all-important function is below par. Most of the complaints emanating from the staff working with public health facilities in Counties and also members of the public directly and/or indirectly touch on finances. It is in the public domain that the employees working with the aforementioned health facilities have been complaining of poor remuneration terms. The epitome of these complaints is manifested in strikes by medical practitioners constituting of doctors, clinical officers, pharmacists, nurses and other related staff on the payroll of State Governments. The foregoing points out to challenges in the management of finances by the State Governments. This could probably be due to poor resource mobilization, misplaced budgetary allocations, weak financial systems, lack of accountability, among other inhibitions. Financial management in the public sector including health facilities constitute various facets which touch on accounting, budgeting, and auditing (Njenga et al., 2014). In the wake of these challenges, crucial health services provided by public health utilities have intermittently been compromised and in some cases and at some times ceased altogether. Granted that financial management is a prerequisite for success of the health sector among other functions, it was imperative to evaluate the influence of financial management practices on service delivery in the public health sector.
1.3 Objectives of the Study
The study addressed the general objective and a set of specific objectives as stated below.
1.3.1 General Objective
The study evaluated the influence of financial management practices on service delivery in the public health facilities in Oda sub-county, Ghania.
1.3.2 Specific Objectives
i. To examine the effect of revenue mobilization on service delivery in the public health facilities in Oda sub-county
ii. To analyze how budgeting affects service delivery in the public health facilities in Oda sub-county
iii. To examine the effect of financial accountability on service delivery in the public health facilities in Oda sub-county
1.4 Research Hypotheses
H01: There is no significant relationship between revenue mobilization and service delivery in the public health facilities in Oda sub-county.
H02: There is no significant relationship between budgeting and service delivery in the public health facilities in Oda sub-county.
H03: There is no significant relationship between financial accountability and service delivery in the public health facilities in Oda sub-county.
1.5 Significance of the Study
There are a couple of reasons that warrant carrying out of this study. The problems facing provision of key services in public health facilities under the management of State Governments have become both persistent and monumental. The worst ramifications of the actual situation in these health utilities is loss of innocent lives through desertion of patients by health workers resulting from go-slows and industrial strikes. In this respect, therefore, the findings of this study are hoped to be essential in shedding more light on how important policies can be formulated by the devolved governments to arrest the rampaging situation in the public health facilities under the management of State Governments. The management and finance staff are further anticipated to find the findings and recommendations herein suitable in addressing financial management challenges in public health facilities in Ghania. Lastly, the study is expected to add more knowledge regarding public financial management and particularly in the public health sector. In view of this, the study is likely to be a reliable point of reference for individuals in the world of academia particularly in respect of the field of finance.
1.6 Scope of the Study
The study was carried out across the public health facilities in Oda sub-county. The sub-county is one of the 11 such devolved administrative units in Eastern Region. The choice of these facilities was premised on the fact that they constitute some of the leading health facilities in the region including the Eastern Region Level Five Hospital. In tandem, they employ thousands of staff besides being managed by the State Government of Eastern Region. The study centred on two categories of employees. These are the staff working in the finance department and also the management staff. The study focused on these employees based on the reasoning that they are the most privy to issues concerning financial management practices and service delivery. The study was guided by the following constructs: revenue mobilization, budgeting, financial accountability, and service delivery. The study was conducted over a duration spanning three calendar months beginning June, 2024..
1.7 Limitations of the Study
The study was met by different limitations. The fact that the data collection instrument consisted of close-ended questions was a limitation in that some views of the respondents could not have been captured. In relation to this challenge, the researcher ensured that the research questionnaire was able to address the important issues touching on financial management practices and service delivery in public health facilities in Oda sub-county. Another limitation was the skepticism exhibited by some of the sampled respondents. Some of the prospective participants were not willing to take part in the study fear of probable reprisals from their superiors. This challenge was addressed by assuring all the respondents that their identity was to remain anonymous and the data collected from them were to be treated with utmost confidentiality. In addition, requisite consents and approvals were sought prior to data collection in order to smoothen the process of data collection.
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