Audit Committees and Public Financial Management in Coastal Counties of Kenya

The enactment of the 2010 Constitution in Kenya implemented a decentralized form of governance to promote equitable development across both levels of government. This framework introduced mechanisms for equitable resource allocation between the national government and the 47 devolved units. However, the Controller of Budget (COB) reported persistent issues in financial management and misuse of public funds within these decentralized entities. This study investigated the function played by audit committees in enhancing management of public finances in coastal counties of Kenya, with specific focus on composition of audit committees. This research was grounded on institutional theory. The study employed a descriptive research design with a targeted group of 144 individuals and 40 respondents. Standardized and self-administered questionnaires were employed to gather data. SPSS version 28 was employed for analysis of data. Inferential techniques and descriptive statistics, including Pearson correlation and regression analysis, were employed. Audit committee composition was found to affect public financial management positively, with diverse professional expertise enhancing decision-making. Gender diversity, though recognized, was less emphasized, pointing to the need for more inclusive representation. The study revealed that audit committees play a pivotal role in strengthening management of public finances by ensuring oversight autonomy. It recommended that county governments put in place measures to promote diversity in audit committee composition. County governments should ensure that audit committees include members with expertise in finance, accounting, risk management, and legal affairs.