Effect of Financial Management Practices on Program Implementation: A Case of Early Childhood Development Program in Gasabo District, Rwanda

Diane Umutoni; Kato Mahazi Kasozi

doi:10.51867/ajernet.6.2.23

Authors

Diane Umutoni
tonydiane94@gmail.com
University of Kigali, Rwanda
Kato Mahazi Kasozi University of Kigali, Rwanda

Keywords:

Early Childhood Development, Financial Management Practices, Project Implementation, Program

Abstract

The purpose of this study was to investigate the effect of financial management practices on program implementation, a case study of early childhood development (ECDs) program. Specially, to assess the effect of program budgeting on implementation of early childhood development program in Gasabo district, to analyze the effect of financial risk management on implementation of early childhood development program in Gasabo district and to examine the effect of working capital management on implementation of early childhood development program in Gasabo district. This study was guided by the theory of budgeting, theory of constraints and cash management theory. Further, this study utilized the descriptive and correlational research design. A sample size of 338 respondents were drawn on 2187 people using Yamane formula. The study employed stratified and simple random sampling. Data collected were analyzed using both descriptive and inferential analysis. The findings show a very high mean score of 4.31 (SD=0.684) for the combined statements overall strong positive agreement that there is effect of program budgeting on implementation of early childhood development program in Gasabo district. Further, it shows a very high mean score of 4.02 for the combined statements an overall very strong positive opinions that there is effect of financial risk management on implementation of early childhood development program in Gasabo district, and a very high mean score of 4.23 (SD=0.632) for the combined statements an overall strong positive agreement that there is effect of working capital management on implementation of early childhood development program in Gasabo district. This study concludes that there is significant effect of financial risk management on implementation of early childhood development program in Gasabo district. The study suggests that program budgets should align financial resources with strategic objectives, ensuring effective allocation of funds. A well-structured budget enhances operational efficiency, accountability, and transparency. Managers should safeguard assets for long-term sustainability, identifying potential risks like market fluctuations, credit risks, operational challenges, and regulatory changes. Proactive risk assessment frameworks can help detect vulnerabilities early. Managers should maintain ECD's liquidity and operational efficiency by optimizing the balance between current assets and liabilities to ensure sufficient cash flow for daily operations. Overall, a well-structured budget enhances operational efficiency and accountability.

Dimensions

REFERENCES

Abdulai, M. S. (2020). Government of Ghana's Budget: An assessment of its compliance with fundamental budgeting principles. International Journal of Economics and Management Engineering, 14(10), 1018-1036.

Akomea-Frimpong, I., Jin, X., & Osei-Kyei, R. (2024). Fuzzy Analysis of Financial Risk Management Strategies for Sustainable Public-Private Partnership Infrastructure Projects in Ghana. Infrastructures, 9(4), 76-107. https://doi.org/10.3390/infrastructures9040076 DOI: https://doi.org/10.3390/infrastructures9040076

Alexander, C. (2005). The present and future of financial risk management. Journal of Financial Econometrics, 3(1), 3-25.

https://doi.org/10.1093/jjfinec/nbi003 DOI: https://doi.org/10.1093/jjfinec/nbi003

Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2014). Working capital management, corporate performance, and financial constraints. Journal of business research, 67(3), 332-338. https://doi.org/10.1016/j.jbusres.2013.01.016 DOI: https://doi.org/10.1016/j.jbusres.2013.01.016

Bashaija, W. (2022). Effect of financial risk on financial performance of insurance companies in Rwanda. Journal of Finance and Accounting, 10(5), 230-237.

Covaleski, M. A., Evans III, J. H., Luft, J. L., & Shields, M. D. (2003). Budgeting research: three theoretical perspectives and criteria for selective integration. Journal of Management accounting research, 15(1), 3-49. https://doi.org/10.2308/jmar.2003.15.1.3 DOI: https://doi.org/10.2308/jmar.2003.15.1.3

Darun, M. R. (2011). The determinants of working capital management practices: A Malaysian perspective (Doctoral dissertation, Lincoln University).

Dostatni, E., & Trojanowska, J. (2017). Application of the theory of constraints for project management. Management and production engineering review 8(3),87-95. https://doi.org/10.1515/mper-2017-0031 DOI: https://doi.org/10.1515/mper-2017-0031

Ebdon, C., & Franklin, A. L. (2006). Citizen participation in budgeting theory. Public administration review, 66(3), 437-447.

https://doi.org/10.1111/j.1540-6210.2006.00600.x DOI: https://doi.org/10.1111/j.1540-6210.2006.00600.x

Gamariel, Mbonimana, Michael, M., & Kwikiriza, J. (2021). An Assessment of Working Capital Management on the Financial Performance of Private Institutions in Rwanda. A Case of Intersect Security Company. Social Science Learning Education Journal, 6(10), 599-607.

Gashugi, C. M. (2015). Budgeting as a management tool for effective performance of Public Institutions in Rwanda: a case study of University of Rwanda (Doctoral dissertation, University of Rwanda).

Githinji, S. M. (2016). Effects of financial risk management on financial performance of commercial banks in Kenya (Doctoral dissertation, University of Nairobi).

Hijal-Moghrabi, I. (2017). The current practice of performance-based budgeting in the largest US cities: An innovation theory perspective. Public Performance & Management Review, 40(4), 652-675. https://doi.org/10.1080/15309576.2017.1313168 DOI: https://doi.org/10.1080/15309576.2017.1313168

Hunter, L. J., Bayly, B. L., Bierman, K. L., Welsh, J. A., & Gest, J. M. (2022). Predicting school readiness program implementation in community-based childcare centers. Frontiers in Psychology, 13, 1-15. https://doi.org/10.3389/fpsyg.2022.1023505 DOI: https://doi.org/10.3389/fpsyg.2022.1023505

Hyungwook, S., & Seokki, C. (2022). A Study on the Improvement of National R&D Project Performance Evaluation and Budgeting System. Asian Journal of Innovation and Policy, 11(3), 342-362.

Ikeziri, L. M., Souza, F. B. D., Gupta, M. C., & de Camargo Fiorini, P. (2019). Theory of constraints: review and bibliometric analysis. International Journal of Production Research, 57(15-16), 5068-5102. https://doi.org/10.1080/00207543.2018.1518602 DOI: https://doi.org/10.1080/00207543.2018.1518602

Junkes, M. B., Tereso, A. P., & Afonso, P. S. (2015). The importance of risk assessment in the context of investment project management: a case study. Procedia Computer Science, 64(1), 902-910. https://doi.org/10.1016/j.procs.2015.08.606 DOI: https://doi.org/10.1016/j.procs.2015.08.606

Kenno, S. A., Lau, M. C., & Sainty, B. J. (2018). In search of a theory of budgeting: A literature review. Accounting perspectives, 17(4), 507-553. https://doi.org/10.1111/1911-3838.12186 DOI: https://doi.org/10.1111/1911-3838.12186

Kinyanzii, J. M. (2023). Influence of financial management practices on the financial performance of public secondary schools in Kathiani sub-county (Doctoral dissertation, Southern Eastern Kenya University Repsitory).

Kwizera, E., Oyebimpe, A., & Andala, H. O. (2021). Early Childhood Education and Primary School Learners Academic Performance in Rwanda. Journal of Education, 4(2), 103-113.

Lu, E. Y., Mohr, Z., & Ho, A. T. K. (2015). Taking stock: Assessing and improving performance budgeting theory and practice. Public Performance & Management Review, 38(3), 426-458.

https://doi.org/10.1080/15309576.2015.1006470 DOI: https://doi.org/10.1080/15309576.2015.1006470

Maclellan-Wright, M. F., Anderson, D., Barber, S., Smith, N., Cantin, B., Felix, R., & Raine, K. (2007). The development of measures of community capacity for community-based funding programs in Canada. Health promotion international, 22(4), 299-306. https://doi.org/10.1093/heapro/dam024 DOI: https://doi.org/10.1093/heapro/dam024

Mao, J. C., & Sarndal, C. E. (1978). Cash Management: Theory and Practice. Journal of Business Finance & Accounting, 5(3), 329-339.

https://doi.org/10.1111/j.1468-5957.1978.tb01046.x DOI: https://doi.org/10.1111/j.1468-5957.1978.tb01046.x

Mashrur, A., Luo, W., Zaidi, N. A., & Robles-Kelly, A. (2020). Machine learning for financial risk management: a survey. Ieee Access, 8(1), 203-223. https://doi.org/10.1109/ACCESS.2020.3036322 DOI: https://doi.org/10.1109/ACCESS.2020.3036322

Menyah, K. (2005). International cash management in the 21st century: Theory and practice. Managerial Finance, 31(10), 3-17.

https://doi.org/10.1108/03074350510769884 DOI: https://doi.org/10.1108/03074350510769884

Nangobi, F. (2018). Child nutrition and childhood development among children of zero (0) to five (5) years (Doctoral dissertation, Kampala International University, College of Economics and Management).

Ndahimana, J. L., & Patrick, M. Contribution of Proper Budgeting to the Successful Completion of Real Estate Projects in Kigali, Rwanda. International Journal of Science and Research (IJSR)9(11), 846-849.

Nguyen, T. H. T., & Cicea, C. (2019). Budget allocation policy for public higher education in Vietnam: a short radiography and future trends. In Proceedings of the International Management Conference 13 (1), 448-456.

Nyiraneza, C., & Twesigye, D. (2023). Effect of Financial Risk Management Practices on Profitability of Listed Companies in Rwanda: A case of CIMERWA PLC (2020-2022). Journal of Finance and Accounting, 7(11), 259-272.

https://doi.org/10.53819/81018102t2287 DOI: https://doi.org/10.53819/81018102t2287

Omopariola, E D and Windapo, A (2019) Financial Management Strategies That Influence Project and Organisation Performance In: Gorse, C and Neilson, C J (Eds) Proceedings of the 35th Annual ARCOM Conference, 2-4 September 2019, Leeds, UK, Association of Researchers in Construction Management, 476-485.

Owusu, J., Owusu Ansah, W., Djan, K. O., & Anin, E. K. (2021). Impact of financial resource building effort on financial resource availability among small and medium enterprises. Cogent Business & Management, 8(1), 1-13.

https://doi.org/10.1080/23311975.2021.1920676 DOI: https://doi.org/10.1080/23311975.2021.1920676

Petroia, A. (2017). On the essence and efficiency of programme budgeting. Eastern European Journal for Regional Studies (EEJRS), 3(2), 109-122.

Phiri, I., Manangazira, P., Macleod, C. K., Mduluza, T., Dhobbie, T., Chaora, S. G., ... & Global Trachoma Mapping Project. (2018). The burden of and risk factors for trachoma in selected districts of Zimbabwe: results of 16 population-based prevalence surveys. Ophthalmic epidemiology, 25(sup1), 181-191.

https://doi.org/10.1080/09286586.2017.1298823 DOI: https://doi.org/10.1080/09286586.2017.1298823

Primarni, A., Ngura, E. T., Mufid, A., Aeeni, N., & Purwanto, A. (2020). Early Childhood Education Financial Management and Wealth Management Perspective: Study at PAUD. Psychology and Education, 57(9), 1555-1561.

Rudacogora, B., Kihooto, E. M., &Muhimpundu, M. (2022). Effects of working capital management on profitability of manufacturing companies in Rwanda. The Strategic Journal of Business & Change Management, 9(1), 1 - 15. https://doi.org/10.61426/sjbcm.v9i1.2160 DOI: https://doi.org/10.61426/sjbcm.v9i1.2160

Ruscitasari, Z., Nurcahyanti, F. W., & Wibisono, D. (2022). Financial Literacy and Financial Planning and Control Level in Micro, Small and Medium Enterprise: The Mediating Role of Proactive Employees. Jurnal Dinamika Akuntansi dan Bisnis, 9(1), 107-120. https://doi.org/10.24815/jdab.v9i1.23620 DOI: https://doi.org/10.24815/jdab.v9i1.23620

Sa'eed, A., Gambo, N., Inuwa, I. I., & Musonda, I. (2020). Effects of financial management practices on technical performance of building contractors in northeast Nigeria. Journal of Financial Management of Property and Construction, 25(2), 201-223.

https://doi.org/10.1108/JFMPC-07-2019-0064 DOI: https://doi.org/10.1108/JFMPC-07-2019-0064

Sebidi, S. D. (2023). Financial management decision-making of school finance committees in public primary schools in Mpumalanga province, South Africa. South African Journal of Education, 43(3), 1-8. https://doi.org/10.15700/saje.v43n3a2268 DOI: https://doi.org/10.15700/saje.v43n3a2268

Shabbir, R., Naveed, S., & Cheema, S. M. (2023). Evaluation of the Factors behind the Failure of Project Management Practices. Journal of Development and Social Sciences, 4(3), 490-501.

https://doi.org/10.47205/jdss.2023(4-III)47 DOI: https://doi.org/10.47205/jdss.2023(4-III)47

Şimşit, Z. T., Günay, N. S., & Vayvay, Ö. (2014). Theory of constraints: A literature review. Procedia-Social and Behavioral Sciences, 150(1), 930-936. https://doi.org/10.1016/j.sbspro.2014.09.104 DOI: https://doi.org/10.1016/j.sbspro.2014.09.104

Sunday, A., Turyahebwa, A., & Byamukama, E. M. (2023). Working capital management practices and performance of small and medium enterprises in western Uganda. Kabale University Interdisciplinary Research Journal, 2(1), 4-21.

Tsourapas, A., & Frew, E. (2011). Evaluating 'success' in programme budgeting and marginal analysis: a literature review. Journal of health services research & policy, 16(3), 177-183. https://doi.org/10.1258/jhsrp.2010.009053 DOI: https://doi.org/10.1258/jhsrp.2010.009053

Ugiriwabo, P., Tuyishime, D., Nizeyimana, G., & Ntahobavukira, B. (2023). The Impact of Financial Management Practices on Academic Performance in Day Schools of Kicukiro District in Rwanda. Cradle of Knowledge: African Journal of Educational and Social Science Research (The), 11(3), 119-128.

https://doi.org/10.4314/ajessr.v11i3.3 DOI: https://doi.org/10.4314/ajessr.v11i3.3

Yizengaw, J. Y., & Agegnehu, M. A. (2021). Practices and challenges of school financial resource management implementation in Bahir Dar City administration of Ethiopia: A comparative study between government and private secondary schools. Cogent Education, 8(1), 1-29. https://doi.org/10.1080/2331186X.2021.1884340 DOI: https://doi.org/10.1080/2331186X.2021.1884340

Zada, M., Yukun, C., & Zada, S. (2021). Effect of financial management practices on the development of small-to-medium size forest enterprises: Insight from Pakistan. GeoJournal, 86(3), 1073-1088. https://doi.org/10.1007/s10708-019-10111-4 DOI: https://doi.org/10.1007/s10708-019-10111-4

Zhao, X., & Hou, J. (2022). Applying the theory of constraints principles to tourism supply chain management. Journal of Hospitality & Tourism Research, 46(2), 400-411.

https://doi.org/10.1177/1096348021996791 DOI: https://doi.org/10.1177/1096348021996791