An Evaluation Of The Effect Of Liquidity Management Practices On Growth Of Public Secondary Schools In Kisii County

Abstract

The growth of a school like any organisation can be assessed using the concept of liquidity. Similar to a business, growth of a school depends heavily on the ability of financial managers to effectively manage the components of liquidity. Growth of a school can be analysed in terms of the school’s asset portfolio, student enrollment, staff employment, academic achievements and infrastructural facilities. This study sought to establish the effect of liquidity management practices on growth of public secondary schools in Kisii County. The objectives of the study were to determine the effect of cash management, accounts receivables and sundry revenue on growth of public secondary schools in Kisii County. Descriptive survey design was used. The study targeted a population of 341 public secondary schools with 1364 respondents composed of principals, Director of studies, Bursars and BOM chairmen. A sample size of 400 respondents was selected for the study using Yamane’s (1967) statistical sampling method. Simple random sampling method was used to pick the respondents. A questionnaire was used as data collection method for receiving information from the respondents. Validity was ensured through subjecting the questionnaire to the expert opinion of university supervisors. Reliability of the questionnaire was tested using the Cronbach alpha correlation coefficient. The instrument had an overall reliability of 0.756 and this was found to be reliable for the study. Descriptive statistical methods of weighted average, percentages and frequencies were used to analyse data. Pearson’s product moment correlation coefficient was used to describe the relationship between liquidity management practices and growth of public secondary schools in Kisii County. Data was presented in form of tables and graphs. Cash, accounts receivables and sundry revenue management were analysed with their effect on growth of public secondary schools in Kisii County. The major findings were that these individual drivers of liquidity management had a positive effect on growth of public secondary schools in Kisii County. The results showed that there was a strong relationship between cash management, accounts receivables and sundry revenue on growth of public secondary schools in Kisii County. Based on the objectives of the study, the results pointed out that there was positive and significant effect of liquidity management practices on growth of public secondary schools in Kisii County. The study concluded that Cash management in public secondary schools plays a key role on growth of schools and accounts receivables form a vital component in the process of liquidity management of a school. The result also showed that Sundry revenue greatly affects growth of schools. Public secondary school growth can be regarded as a function of effective liquidity management practices. The study recommends that the government should employ proper liquidity management skills, techniques and efficiency, to achieve growth of public secondary schools in Kenya.