Assessment of the Effect of Financial Management Practices on Operational Efficiency of Cooperative Societies in Awka South LGA, Anambra State

This study examined the effect of financial management practices on the operational efficiency of cooperative societies in Awka South Local Government Area, Anambra State. Recognizing the importance of efficiency for cooperative sustainability, the research investigated the influence of Budgeting Practices, Financial Planning, Working Capital Management, Financial Reporting, Internal Controls, Investment Decisions, and Financing Decisions on operational efficiency, proxied by Productivity. A quantitative survey design collected data from 316 respondents across various cooperative societies. Ordinary Least Square (OLS) regression was used for analysis. The OLS results indicated that Budgeting Practices (β =0.215, p<0.01), Financial Planning (β =0.302, p<0.001), Working Capital Management (β =0.188, p < 0.05), Financial Reporting (β =0.257, p < 0.01), Internal Controls (β =0.351, p < 0.001), and Investment Decisions (β =0.150, p < 0.05) all had a statistically significant positive effect on the operational efficiency (productivity) of cooperative societies. This implies that implementing these practices improves productivity. However, Financing Decisions (β =0.045, p > 0.10) did not show a significant effect. The study concludes that robust financial management practices, excluding financing decisions in this context, are crucial drivers of operational efficiency in Awka South LGA cooperatives. The significant positive impacts of budgeting, planning, working capital, reporting, internal controls, and investment decisions highlight their importance. Recommendations include strengthening financial management systems, emphasizing sound budgeting, comprehensive planning, optimized working capital, accurate reporting, strong internal controls, and informed investment decisions to enhance productivity and ensure cooperative sustainability.