Project Appraisal and Financial Performance in Public Universities, Kenya

Abstract

Kenya's public institutions have had poor financial performance for a number of years, which has resulted in campus closures and an ever-increasing backlog of unpaid debts. Universities have had difficulty recruiting enough faculty members to meet the demand for their programs. The study aimed to determine the relationship between project appraisal and financial performance of the Public Universities in Kenya. The study adopted a correlational research design, and the target population was the public universities in Kenya with a purposive sample of 155 managers selected from three categories of universities according to their age and when they were chartered. The primary data was collected using questionnaires, and secondary data was collected using an Excel schedule and analyzed using descriptive and inferential statistics. The correlation findings indicated that project appraisal had a positive and significant relationship with financial performance (r = .626, p = .000<.05). The R-square value of 0.392 indicated that project appraisal explains 39.2% of variations in the financial performance of public universities. Further, regression results showed that project appraisal had a positive and significant influence on financial performance (β = 0.585, p=.000<.05), implying that project appraisal significantly enhances the financial performance of public universities in Kenya. The study concluded that project appraisal contributes significantly to the enhanced financial performance of public universities. The study recommended that the management of public universities should strengthen aspects relating to project appraisal. There is a need to ensure that projects are implemented as per the contract schedule. Projects should be diligently monitored to ensure quality. Further, projects should be appraised using scientific methods to ensure that there is a constant flow of cash to finance projects according to budget.