FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF

PRIVATE PRIMARY SCHOOLS IN UGANDA. A CASE OF TRINITY PRIMARY

SCHOOL, KAMPALA

DANIEL TURYASINGURA
17/MPA/00/KLA/WKD/0011

SUPERVISOR
DR. ROSE NAMARA………………………………………………..
UGANDA MANAGEMENT INSTITUTE

SUPERVISOR
XXXXXXXXXXXX………………………………………………..
UGANDA MANAGEMENT INSTITUTE

A PROPOSAL SUBMITTED TO THE SCHOOL OF MANAGEMENT SCIENCE IN

PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF A
MASTERS DEGREE IN PUBLIC ADMINISTRATION AND MANAGEMENT OF
UGANDA MANAGEMENT INSTITUTE

JULY, 2020
 Declaration

I DANIEL TURYASINGURA do hereby declare that, to the best of my knowledge and belief,

the material presented in this research proposal is my original work and has not been presented

by me or any other person for a degree or any other academic award in any Institution of higher

learning.

Signed ……………………………………………………………………………………………..

DANIEL TURYASINGURA

17/MPA/00/KLA/WKD/0011

Date ……………………………………………………..
 TABLE OF CONTENTS
Declaration........................................................................................................................................i
TABLE OF CONTENTS.................................................................................................................ii
CHAPTER ONE............................................................................................................................1
INTRODUCTION.........................................................................................................................1
1.2 Background to the Study...........................................................................................................1
1.2.1 Historical perspective.............................................................................................................1
1.2.2 Conceptual perspective...........................................................................................................3
1.2.3 Theoretical perspective...........................................................................................................5
1.2.4 Contextual perspective............................................................................................................6
1.3 Problem statement.....................................................................................................................8
1.4 Purpose of study........................................................................................................................9
1.5 Objectives of study....................................................................................................................9
1.6 Research questions.....................................................................................................................9
1.7 Research hypotheses..................................................................................................................9
1.8 Conceptual framework.............................................................................................................11
1.9 Significance of study...............................................................................................................12
1.11 Scope of study........................................................................................................................13
1.11.1 Geographical Scope............................................................................................................13
1.11.2 Content Scope / Subject scope............................................................................................14
1.11.3 Time Scope.........................................................................................................................14
1.12 Operational Definitions terms and concepts.......................................................................14
CHAPTER TWO.........................................................................................................................16
LITERATURE REVIEW............................................................................................................16
2.1 Introduction..............................................................................................................................16
2.2 Theoretical Review..................................................................................................................16
2.3 Actual Review..........................................................................................................................17
2.3.1 Financial Management Practices and Financial Performance..............................................17
2.3.2 Financial planning and financial performance.....................................................................18
2.3.3 Financial Control and financial performance.......................................................................20
2.3.4 Financial reporting and financial performance.....................................................................22
2.5 Summary of the Literature Review..........................................................................................23
CHAPTER THREE.....................................................................................................................24
METHODOLOGY......................................................................................................................24
3.1. Introduction.............................................................................................................................24
3.2. Research Design.....................................................................................................................24
3.3. Study Population.....................................................................................................................25
3.4 Sample Size and Selection.......................................................................................................25
Table 1 study Population and Sample............................................................................................25
3.5. Sampling Techniques and Procedure......................................................................................26
3.6. Data Collection Methods........................................................................................................26
3.6.1. Questionnaire Survey...........................................................................................................26
3.6.2. Interview method................................................................................................................27
3.6.3. Documentary Review..........................................................................................................27
3.7. Data Collection Instruments...................................................................................................27
3.7.1. Questionnaires.....................................................................................................................27
3.7.2. Interview Guide...................................................................................................................27
3.7.3. Documentary Review Checklist..........................................................................................28
3.8.0. Validity and Reliability of Instruments................................................................................28
3.8.1. The validity of Instruments..................................................................................................28
3.8.2. Reliability of Instruments....................................................................................................28
3.9. The procedure of Data Collection...........................................................................................29
3.10. Data Analysis........................................................................................................................29
3.10.1 Analysis of Quantitative Data.............................................................................................29
3.10.2 Analysis of Qualitative Data..............................................................................................30
3.11 Ethical Considerations...........................................................................................................30
APPENDICES..................................................................................................................................i
Appendix 1 ; QUESTIONNAIRE FOR TRINITY PRIMARY SCHOOL-BUKOTO EMPLOYEES...i
Appendix II; INTERVIEW GUIDE.................................................................................................v
Appendix III...................................................................................................................................vi
SAMPLE SIZE DETERMINATION.............................................................................................vi
 CHAPTER ONE

INTRODUCTION

1.1 Introduction

Financial management in private enterprises like schools is concerned with ensuring funds are

available when needed and that they are obtained and used most efficiently and effectively to the

benefit of the citizens (Agwu, 2014). According to Wanyungu (2012), financial management

practice requirements can impose a significant burden on private schools. Managing the

movement of funds concerning the budget is essential for the financial performance of a private

school. But experience reveals that the financial management practices in private schools are

generally weak and dominated by conditions of resource scarcity vis-à-vis the ever-increasing

agenda of development activities on which such funds could be spent. This has led to a financial

crisis in these schools hence affecting financial performance and overall quality of services

(Wanungu, 2012). Therefore, this study aims at exploring the effect of financial management

practices on the financial performance of private primary schools in Uganda.

In the current study, financial management practices represent the independent variable and they

include financial planning, financial controls, and financial reporting. On the other side, financial

performance is the dependent variable which is measured by returns on investment, returns on

assets, returns on capital employed, and economic value-added.

This chapter is organized under different subheadings that include; background to the study

which is divided into historical, conceptual, theoretical, and contextual perspectives, statement of

the problem, purpose, objectives, research questions, hypotheses, the scope of the study, the

significance of the study, justification, conceptual framework, and operational definitions.

1.2 Background to the study

1.2.1 Historical perspective

For many years financial management practices have been known to have an impact on the

overall performance of privately owned business enterprises (Shah, 2009). In developed

countries, emphasis on financial management practices dates back after the Second World War

(Lecerf, 2012). According to Burns and Fraser (2016), the effects of the second world war left

many companies mainly privately-owned companies suffering a major setback. Many were left

incapacitated, while others had to go through tough times to thrive in what seemed to be a very

harsh transition characterized by the low purchasing power of the population as well as lack of

well-established financial structures. During this period, only business enterprises which

embraced effective financial management practices were the only ones to survive. This was

evidenced by the increase in customer base, total sales, and overall profits made by these

companies. According to Gitman (2017), these were indicators of financial performance a shred

of evidence that there is a positive relationship between financial management practices and

financial performance.

According to Ardjourman and Aima (2015), in Europe, many schools that used to perform better

in the past had a structured accounting system characterized by adequate planning, financial

control, and risk management practices. Such institutions are still in existence now after almost a

century. In India, the first schools to embrace modern accounting and financial management

systems were mainly located in cities including Mumbai, Bengaluru, Chennai, Kolkata, and

Jaipur. In the 1950s these cities had a high number of schools which had high students enrolment

but due to effective accounting and financial controls in their fees collection systems fees
compliance was very high as almost over 90% of the fees were collected from the students an

indication of good financial performance (Cameron & Whatten, 2014).

In Japan, due to the effects of the Second World War which led to the destruction of lives and

property mainly evidenced in the cities of Hiroshima and Nagasaki, many business enterprises

suffered a major setback. In an attempt to revive the private sector, tertiary institutions

emphasized financial accounting and management courses mainly to the private sector including

educational institutions. By the 1960s a big number of schools in urban areas of China were

using computerized accounting systems, had the budgetary process, financial reporting, and

auditing of books of accounts at the end of each financial year (Shah, 2009). Wanyungu (2012)

asserts that the emphasis on financial accounting practices is one of the major reasons for high

financial performance and overall competitiveness in the education sector.

In Africa, emphasis on financial management practices in mainly privately owned institutions is

not an old practice (Mbogo, 2011). In countries like South Africa which have experienced white

dominance for some time, financial management is not a new concept. However, in sub-Saharan

Africa, many enterprises have just started embracing financial management not many years ago

(Akelof, 2011). Waddell (2013) indicates that the growth in national economies has not left out

privately-owned institutions including schools. According to Ngugi and Bwisa (2013), many

education institutions in East Africa have now embraced modern financial management practices

due to the known impact which it has towards improved financial performance.

In Uganda, financial management in private companies came to light in the early 2000s (Musabe,

2015). According to UNCTAD (2012), Uganda organized a conference in 2002 to train private

institutions in financial management at the International Conference Centre in Kampala, Uganda

which was attended by over about 260 participants. According to Nanozi (2014), for many years

many business owners considered financial management is an issue that is only of importance to

large companies. To date, there exists little and scanty information on the effect of financial

management practices on the financial performance of business enterprises. Mbogo (2011)

asserts that many business enterprises including private schools are characterized by the inability

to prepare and maintain books of accounts, lack proper accounting systems, poor internal control

systems, and making it worse lack of qualified personnel to prepare these books. The current

study, therefore, seeks to establish the effect of financial management practices on the financial

performance of primary schools in Kampala considering Trinity Primary School, Bukoto-

Kampala as a case study.

1.2.2 Conceptual perspective

Financial management practices can be defined as the process of planning, organizing, directing

and controlling of the different activities involved in finance which include procurement and the

effective use of the limited funds which are available to the company or institution (Waddell,

2013)

Shah (2009) defines financial management practices as a series of activities performed by the

accounting officer of a given institution as well as related managers in the process of budgeting,

management of the supply chain as well as asset management and control. According to Gitman

(2017), financial management as a functional area in the business drives financial performance

and if it is not handled well, it can lead the business into problems. Cameron and Whatten (2014)

argue that financial management practices including accounting, budgeting, and risk

management enhance operations and efficiency leading to financial performance.

According to Lecerf (2012), that financial management practices include financial planning,

financial decision making, and financial reporting. Financial planning is the process of setting,

planning, and review of the business’ goals which is done through effective and proper

management of finances. Financial decision making is a process that involves coming out of the

ultimate course of action which is geared towards a financial vote. Financial reporting is the

recording and organizing of the accounting information systems in the form of financial

statements to be used in the evaluation, decision making, and decision-making process.

According to Ngugi and Bwisa (2013), financial performance is defined as the achievement of

business objectives and goals which are measured against the cost and set standards. Agwu

(2014) asserts that financial performance is the measure of the overall health of the business

within a given period. According to Mbogo (2011), the financial performance of a business can

be used to make comparisons with other similar businesses across the same industry. In the

context of the study, financial performance can be used to compare the performance of primary

schools within Kampala and Uganda at large. This may involve making comparisons in privately

owned schools or government schools in the same area or countrywide. Given all these

definitions, in the current study, Financial performance will be defined as a subjective measure of

how a business can use its existing assets effectively and efficiently to generate more revenue.

According to Nanozo (2014), primary schools are education institutions providing education

from young children with an average age range between 6 and 13 years. Mbogo (2011) reveals

that primary schools are the first category of educational institutions to provide education from

primary one to primary seven. Wanungu (2012) highlights that financial performance can be

measured by total income, sales, customer base, number of company products as well as brand
loyalty. Concerning the primary school context, financial performance is measured by looking at

overall fees collection, student enrolment as well as total income from other sources including

grants among others.

1.2.3 Theoretical perspective

The study will be hinged on the Resource-Based View (RBV) theory by Wernerfelt (1984).

According to RBV theory, a business enterprise can achieve maximum financial performance if

it utilizes its unique resources (Akarsu & Agyapong, 2012). The resource-based view theory

states that it is feasible and profitable for institutions to exploit existing internal and external

opportunities using existing resources. In the RBV model, resources are given a major role in

helping companies to achieve higher organizational performance. There are two types of

resources: tangible and intangible.

This view is also reflected in the Value Resources Inimitability Organization (VRIO) framework

popularized by (Amort, 1977) as cited in Waddall (2013) which indicates that the analysis of

internal strengths and weaknesses of business enterprises should emphasize its financial

management capability to maximize its income generation avenues, yet minimizing expenses

through effective financial management practices characterized by controls, financial decision

making and reporting as well as auditing practices to minimize losses and fraud.

According to Gitman (2017), a firm's financial resources must be managed in such a way that

adds value to the achievement of the strategic objective of the enterprises. This can be done

through establishing up to date financial accounting practices, cost accounting, and ensuring that

the management is fed with up to date information in regards to financial performance to ensure
effective financial decision making. Shah (2009) asserts that financial resources if well managed

can result in excellence in terms of the overall financial performance of a business enterprise.

In the current study, when an institution capitalizes on the existing financial management

practices through well thought for investment choices, financial goals, priorities, and plans,

coupled with a well-established and controlled environment as a key strength, it can improve on

the financial performance. According to the resource-based theory, institutions like private

schools can utilize the strengths of their accounting sections through modifications of financial

management practices to bring about improved financial performance.

1.2.4 Contextual perspective

Trinity primary schools started in 1998 and sprang its expedition to bring education to the people

of Uganda. The desire for custody the memory of why Trinity primary schools started alive,

mixed with the relentless innovation, and search for new standpoint have been and will continue

to be the main components in a formula destined for accomplishment. At Trinity, the private

school is dedicated to a three-fold path of reassuring education intended to give its pupils the

self-assurance to take on new encounters and achieve their full impending. Trinity primary

school delivers each child with a motivating and compassionate learning atmosphere that rejoices

their exceptionality and proficiencies. Trinity primary school value stimulating education

practices, the latest syllabus, and extensive extra-curricular activities that will inspire each child

to operate spaces both inside and outside the classroom and develop skills that will last for life.

Trinity primary school strives above all to create socially responsible citizens for the Uganda of

tomorrow.
Just like other private schools, Trinity primary school is an institution that is owned privately

with its interest being academics for pre-primary and primary school goers. This is an

independent private school that is not financially aided in full or part by the government by the

government. The school has built a strong accounts department that runs on financial

management practices such as Financial Planning, Financial controls such as Control

environment, Control activities, Budget monitoring, Communication, Monitoring of finances,

and lastly Financial reporting which is informed of Financial statements prepared in accordance

to the accounting principles, policies and Financial reporting regulations (Trinity Primary School

BoD Reports, 2018/2019). Financial management is known to be of great significance towards

the coordination of financial services of enterprises which leads to financial performance (Agwu,

2014). Through effective financial management practices, managers can effectively appreciate

the financial performance of an enterprise concerning its ability to meet its future financial

obligations. According to Gitman (2017), it is a growing culture for different organizations and

business enterprises to organize the annual general meeting in Uganda. This involves the

preparation of key accounting statements including the statement of profit and loss statement of

financial position, auditor's report, the statement on changes in owner's equity, director's

statement of responsibility among others. This has made Trinity primary school embrace

corporate governance to reflect on its financial management practices to have a well-streamlined

accounting reporting at the end of the financial year.

However, this practice has not been well embraced by the school management as expected

despite the implementation of the above, a forensic audit was carried by Trinity School

management board and PTA at the end of the 2018/19 financial year which confirmed the
existence of ineligible expenditures amounting to Ushs 150 million, out of this expenditure a

large percentage of this money was reflected physical infrastructure in the Trinity Schools.

Unfortunately during the physical visit to the schools during the audit, it was confirmed that

Ushs 100million did not reach the school account (Trinity Primary School Audit Report,

2018/19). This is a clear indication that financial management is still a challenge in this school

despite the efforts undertaken by the school management. Furthermore, a report by UBOS (2017)

indicates the poor financial performance in private schools is determined by a mixture of factors

most of which are unknown to the school administration.

Furthermore, as a culture in Uganda where most of the privately-owned schools are run by their

owners who do not need organizing annual general meetings, it implies that the accounting

section of such schools has less pressure towards streamlining their financial practices (Musabe,

2015). Nanozi (2014) asserts that several privately-owned schools have not recruited qualified

and competent accounting staff, these positions are filled with incompetent staff who are not

even aware of what financial management practices are. According to Balunywa (2016), many

privately owned schools in Uganda have not emphasized financial management practices

including financial planning, financial controls, working capital management, and financial

reporting analysis in their overall accounting practices. Nanozi (2014) reveals that proper

financial management in education institutions is evidenced in a decline in return on investments,

return on assets, return on capital employed as wells economic value-added which are key

indicators of financial performance.

However, a report by UBOS (2017) further indicates little research has been carried out to

establish how financial management practices affect financial performance which has resulted in

a knowledge gap in the context of Uganda. Therefore the current study aims to investigate the
relationship between financial management practices and financial performance in privately-

owned primary schools in Uganda considering Trinity Primary School, Bukoto –Kampala as a

case study.

1.3 Problem statement

Financial management is one of the key roles of the principals being the accounting officers of

their school. Most of the principals do not possess adequate financial management skills and

hence they rely on the service training by the ministry of education and sports and other

stakeholders. The appointment of Bursars in Ugandan Private Schools does not emphasize the

preparedness of the heads on the financial management systems. It is assumed that the heads will

learn financial management on the Job. The Ugandan private school owners association and the

ministry of education from time to time have organized in-service – training programs for newly

appointed and in-service and continuing principal heads of these schools. Through these

workshops, principals are taken through basic financial management skills such as budgeting,

procurement, maintenance of proper books of accounts, financial planning, financial controls,

and financial reporting which is intended to ensure efficient utilization of financial resources as a

key to the attainment of the institution's goals. However, in Uganda, most Private schools are not

erected on periodical audits at the end of the financial year as for the case of Trinity Primary

School. For the case of Trinity primary school, the management has considered financial

Planning, Financial controls such as Control environment, Control activities, Budget monitoring,

Communication, Monitoring of finances, and lastly Financial reporting which is informed of

Financial statements prepared in accordance to the accounting principles, policies and Financial

reporting regulations (Trinity Primary School BoD Reports, 2018/2019).

Despite the implementation of the above, a forensic audit was carried by Trinity School

management board and PTA at the end of the 2018/19 financial year which confirmed the

existence of ineligible expenditures amounting to Ushs 150 million, out of this expenditure a

large percentage of this money was reflected to physical infrastructure in the Trinity Schools.

Unfortunately during the physical visit to the schools during the audit, it was confirmed that

Ushs 100million did not reach the school account (Trinity Primary School Audit Report,

2018/19). This is a clear indication that financial management is still a challenge in this school

despite the efforts undertaken by the school management. Furthermore, a report by UBOS (2017)

indicates the poor financial performance in private schools is determined by a mixture of factors

most of which are unknown to the school administration. Since findings from MoES (2017),

indicate that schools lack a well-structured financial management structure, the researcher

assumes that the existing poor financial management practices in private school could be

primarily responsible for the poor financial performance. The current study, therefore, aims at

establishing the relationship between financial management practices and financial performance

of privately-owned primary schools in Uganda considering Trinity Primary School Bukoto as a

case study.

1.4 Purpose of study

To establish the effect of financial management practices on the financial performance of

privately-owned primary schools in Uganda using a case of Trinity Primary School, Bukoto-

Kampala

1.5 Objectives of the study

The current study will be guided by the following objectives;

1) To investigate the effect of financial planning towards financial performance

 2) To establish the effect of financial controls towards financial performance

3) To examine the effect of financial reporting towards financial performance

1.6 Research questions

The current study will be guided by the following study questions

1) What is the effect of financial planning on financial performance?

2) What is the effect of financial controls on financial performance?

3) What is the effect of financial reporting on financial performance?

1.7 Research hypotheses

The current study will be guided by the following hypotheses stated in null

Ho1: Financial planning does not affect financial performance

Ho2: Financial controls do not affect financial performance

Ho3: Financial reporting does not affect financial performance

 1.8 Conceptual framework

Independent Variable Dependent Variable

Financial Management Practices Financial Performance

Financial Planning
Returns on investments
Investment choices Return on assets
Financial goals Return on capital employed
Financial priorities Economic value added
Financial plans
Financial controls

Control environment
Control activities
Budget monitoring
Communication
Monitoring of finances
Financial reporting

Financial statements
Accounting principles and policies
Financial reporting regulations

Source: Waddell (2013) and modified by the researcher

Figure 1: Conceptual framework showing the effect of financial management practices

(independent variable) on financial performance (dependent variable) of privately owned

primary schools in Uganda.

As seen in Figure 1 above, financial management practices is regarded as the independent

variable (ID) which is hypothesized as financial planning, financial controls, and financial

reporting whereas financial performance is regarded as the dependent variable (DV) which is

operationalized as in terms of how it is measured in form of its indicators such as return on

investment, return on assets, return on capital employed and economic value-added. The link
between the study variables indicates that improper financial management practices have proven

a cause of failures in many private schools in terms of financial difficulties, mismanagement of

funds to meet the operating cost and capital expenditure, thus the inclusion of financial

management practices such as financial planning, financial controls, and financial reporting is

aimed at the improvement of the performance of private schools in Uganda since the existence of

well-aligned financial management practices leads to the full realization of return on investment,

return on assets, return on capital employed and economic value-added and vice-versa.

On the other hand, the contingency theory holds that efficiency in operations will only be

achieved by ensuring integration of corporate settings and the operation of financial management

practices, according to the cash conversion cycle, the bigger the cash conversion cycle the better

the financial performance and vice - versa (Gitman,1974). Pecking Order Theory enables

understanding of how capital structures of academic institutions can be formulated (Myers&

Majlef, 2018). Lastly, the Tradeoff theory by Black and Sholes (1974) clarifies the differences

between the cost of the money related to distress and the tax benefits of private schools. It further

emphasizes that the implementation of financial planning practices such as financial planning,

financial controls such as the creation of internal control systems and control environment,

budgetary monitoring, and financial reporting are all aimed at the effective financial performance

which is the main purpose for this study.

1.9 Significance of the study

1.9.1 The study will provide an insight to school owners on how best to improve school returns

by having a well-managed financial management practice. This will help in the formulation
 of the best financial management practices based on the needs of the school but not the

general perception of what schools need.

1.9.2 The findings from the study will guide policymakers in the government in knowing how

they can provide a conducive environment that can improve the financial performance of

private schools in Uganda.

1.9.3 The study will be of importance to the investors and financiers of private schools in

gathering information on the best financial management practices as well as challenges that

affect the financial performance of private schools in Uganda. Hence obtaining key

solutions towards the existing managerial problems in regards to financial performance.

1.9.4 The study will make a contribution to the existing body of knowledge in the area of

financial management practices and financial performance in the specific context of private

primary schools of Uganda.

1.10 Justification

Financial management practices requirements can impose a significant burden on financial

performance. Managing the movement of funds concerning the budget is essential for the

financial performance of schools (Agwu, 2014). Experience reveals that the financial

management processes of private schools, are generally weak and dominated by conditions of

resource scarcity vis-à-vis the ever-increasing agenda of development activities on which such

funds could be spent. According to Mbogo (2011), good performance in private schools as a

result of financial management strategies adopted in the institutions.

In many institutions, the problem of funds management has led to incomplete project

development, delayed payments to both suppliers and teachers in these institutions. Burns and

Fraser (2016) indicated that proper planning, budgeting, financial monitoring, investment

decision making were a booster to good performance in some of the private schools. However,

the relative importance of each of these variables remains unclear on how they enhance positive

financial performance in the schools. Despite the several detected challenges affecting financial

management in private schools, very little research has been conducted to curb the situation.

Therefore, this study seeks to find out the effects of financial management practices on the

financial performance of private schools in Uganda.

1.11 Scope of the study

This section of the study details the coverage of the study in terms of content, time, and

geographical spread.

1.11.1 Geographical Scope

The geographical scope of the study will be Trinity Primary School Bukoto. Trinity Primary

School is located at Bukoto Mukalazi Zone Kampala, Uganda. Being a school with a big number

of pupils and a well-established accounting section, the researcher found it suitable to be the

study area in the current study which is exploring the effect of financial management practices on

the financial performance of the private primary schools in Uganda.

1.11.2 Content Scope / Subject scope

The content scope of the study will be limited to examining the effect of financial management

practices on the financial performance of private primary schools in Uganda. The study will

specifically establish the relationship financial planning, financial controls and financial

reporting.
1.11.3 Time Scope

The research study will be conducted from May 2019 to December 2019. The research will

consider data for a period of 10 years from 2009 to 2019. This is considered a relatively enough

period from which enough data will be gathered reliably.

1.12 Operational Definitions terms and concepts

Performance – is the achievement of business objectives and goals measured against known

standards.

Financial performance- is the analysis of financial statement which includes the account

summary and it relates to revenues and expenses, profit/loss, and changes into assets and

liabilities

Financial management practices – refer to how organizations make decisions relating to

various financial aspects and instruments used

Financial indicators – these are general to financial performance and include sales growth,

Returns On Assets (ROA), Returns of Capital Employed (ROCE), Returns on Investments

(ROI), Returns on Equity (ROE), and Returns On Sales.

Returns on Assets – this points at the profits obtained over the total assets employed and it

provides an overview of the efficient management in regards to the use of assets to attain profits

Returns on Investment – this refers to the efficiency on an investment in comparison of

efficiency regarding different investments

Return of Capital Employed – this refers to the profitability of the investments in a company

Resources in the RBV and as used in the following refer to a firm’s assets, capabilities,

organizational processes, firm attributes, information, knowledge, etc.

 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

A literature review is a precise overview of the different studies done on the respective topic, the

discussions made, organized in a chronological or thematical sequence. The review of literature

helps to inform a given study on what has been done, what is known, and what is not known

such that the study can bridge this gap (Amin, 2005) This chapter presents a review of literature

related to the financial management practices and financial performance of private primary

schools in Uganda. The literature will be reviewed under the subheadings guided by the

objectives mentioned in chapter one.

2.2 Theoretical Review

According to Musabe (2015), resource-based view theory emphasizes steps, actions, and

procedures that firms or business institutions should take to earn economic returns or rents

through the creation of a privileged market or competitive advantage over its competitors.

Oladipo (2011) highlighted the similarities between Porter's framework and the resource-based

approach concerning complementarity-compatibility. Wanyungu (2012) asserts that the resource-

based view emphasizes the organization of the company's key resources in a way that brings

about competitive advantage. In this sense, Agwu (2014) opines that human resources if well-

assembled can make a company maximize its profitability. Accounting practices are key

activities performed by human resources which are emphasized by all institutions in an attempt

to boost financial performance. Effective financial reporting, financial controls when they follow

a clear planning process can have a great impact on the financial performance of the institution.

Therefore, according to resource-based view theory, through effective control of financial

resources as the blood of a business entity, the financial performance of the business can be

guaranteed.

Cameron and Whetten (2014) argue that the basis of the resource-based view is that successful

firms will find their future competitiveness on the development of distinctive and unique

capabilities, which may often be implicit or intangible in. Thus, the essence of strategy is or

should be defined by the firm's unique resources and capabilities. Furthermore, the value-

creating potential of strategy, that is the firm's ability to establish and sustain a profitable market

position, critically depends on the rent generating capacity of its underlying resources and

capabilities (Gitman, 2017). The underlying logic holds that the sustainability of the effects of a

competitive position rests primarily on the cost of resources and capabilities utilized for

implementing the strategy pursued. The resource-based view(RBV) suggests that competitive

advantage and performance results are a consequence of firm-specific resources and capabilities

that are costly to copy by other competitors (Mobegi, 2009).

2.3 Actual Review

2.3.1 Financial Management Practices and Financial Performance

Management of a business is primarily a function requiring stewardship, meaning careful use of

resources for the benefit of the owners. There are two central questions to test the use of

resources: How well did the management make use of the assets to create revenue, and how

carefully did the management control costs to maximize the profit derived from the revenue?

Strictly speaking, the yardstick of financial performance would be budget to actual comparison;

this is true even with revenue creation. Further, financial performance can be tracked from the

quality and standard of budgeted outcomes (Agwu, 2014).

A key measure of success, from the view of shareholders, is the success of the company in using

the funds provided by shareholders to generate profit or shareholders' net worth (Akerlof, 2011).

In the traditional environment, financial plans play a highly important role in financial

performance evaluation. Attaining corporate standards is paramount to success. In the balanced

Scorecard environment, the business plan is weighted with non-financial factors. A performance

evaluation, which is frequently tied directly to bonus compensation, is determined by a more

balanced review of objectives. The goal is to achieve long-term strategic aims rather than

emphasizing short-term budget targets. Financial Performance is tied more closely to market

expectations (Anthony & Young, 2014).

Instead, it is suggested that what is needed is a fundamentally new approach to such important

financial planning purposes as forecasting and resource allocation, financial performance

measurement and control, and cost management- an approach which incorporates a range of

"alternative steering mechanisms" that especially promote empowerment, flexibility and

knowledge –sharing (Parliamentary Centre, 2010). Theodore Levitt, the well-known American

management guru said, "if you don't know where you are going, any road will take you there".

Republic of Uganda (2013), likewise, advocated the use of setting clear, tangible, verifiable,

measurable goals to motivate, rather than to "control", people. Evidence abounds to show that

without quantitative goals, financial performance suffers (Mbogo, 2011). When financial

planning outcomes bear little resemblances to original plans, the entire financial planning

process loses meaning often with negative consequences for the poor and programs designed to

benefit them (Musabe, 2015). Peters further states that divergence between planned and actual

financial expenditure are more difficult to track, especially over longer periods due to substantial
delays in reporting on budget outcomes, which are often due to capacity constraints, variables

dare quality and changes in data presentation formats overtime.

Measuring financial performance includes comparing actual expenditure with the budget

estimates. In doing so, one can see instances where the budget was exceeded showing the

unfavorable variances (Musabe, 2015). The control of direct costs through variance analysis is

based on the principles of management by exception and accounting responsibility. These are

important principles because they enable management to focus attention on critical areas.

2.3.2 Financial planning and financial performance

Financial planning is "central to the role of the enterprise in modern society" (Agwu, 2014),

which is considered to be a central activity that involves the entire firm and conditions its

behavior to facilitate value creation of competitive advantage and financial performance (Burns

& Fraser, 2016).

Successful financial planning requires "exploration competencies" which is the capability of the

firm to harvest ideas and expertise from different sources (Akerlof, 2011). Systematic financial

planning can lead to the observation of different sources of financial opportunities within and/or

outside a firm, which is vital to identifying unexpected opportunities.

According to MoFPED (2012), the size of the firm plays a major role in how successful the

firm's financial planning efforts are. For example, it is both the largest (more than 50,000

employees) and the smallest (less than 500 employees) firms that are most effective when it

comes to financial planning. Medium-sized (5,000 to 10,000 employees) firms are 'stuck in the

middle' and at the same time are struggling with their financial planning efforts.
Many institutions consider short term planning or restructuring in the form of replacement of

management, functional reorganization, and other internal organizational arrangements which are

often a precursor to, or as a result of, strategic adaptations to difficult financial and economic

conditions (Mbogo, 2011).

To ensure effective financial performance and to avoid uncertainty or waste of financial

resources, financial planning becomes vital. Gitman (2017) pointed out that a financial plan is a

formalized way of preparing a statement of all accounts and an allocation of all available

financial resources. In other words, a financial plan can be described as a policy on which

expenditures and income are based. Proponents of financial planning argue that it has several

important roles. National Planning Authority (2010), for instance, argues that business planning

helps to allocate resources, coordinate operations, and provide a means for Performance

Measurement. Nanozi (2014) agree with this view and claim that business planning is the most

widely used technique for control purposes as well as the improved financial performance of the

business. Waddell (2013) too, believes that business planning is still essential and can, for

example, be incorporated as part of the financial component of the balanced scorecard.

Meanwhile, critics of business planning claim that it is bad for business, are no longer adequate,

and are "fundamentally flawed" as planning mechanisms in today's complex and highly uncertain

business environment.

Traditionally, business planning is considered to be one of the most important management tools

to steer the organization, evaluate its financial performance, and motivate its people. However,

criticism of the financial planning process has increased considerably in the past decade

(Wanyungu, 2012).
The impact of business planning on a group of persons may be quite different from the impact on

the individual within the group. Participation by individuals in the process of business planning

will lead to greater group interaction, which will later lead to the improved financial performance

of the organization (Ahmed, Babar & Kashif, 2010). Where financial planning is used to measure

financial performance, the managers may be tempted to build in some element of spare resources

that allow a lapse from actual high levels of performance without deviating from budget targets.

This involves overestimating the time required for any particular task or using the highest price

of input materials available in the price list (Anthony & Young, 2014).

The use of such bias at a lower level of financial planning may be countered by a

correspondingly strict attitude at a higher level to compensate for the built-in slack. Irrespective

of the type of the entity, it is almost inevitable that there will be a political aspect to its

management structure. The word Politics here refers to the power struggle within the

organization. It might be a power struggle in which labour unions seek to impose their will on

management. It might be a power struggle within the board of directors or between divisions of

the enterprise. Whatever its nature, such a power struggle is evidenced in the financial planning

process where various units of the enterprise are engaged in rivalry over the formulation of the

budget. Thus the financial planning may be more important as a manifestation of the political

struggle than as an item of financial planning (Mobegi, 2009). Among the key components of

financial planning and which in turn affect performance include staff participation and the

feedback and control mechanism.

2.3.3 Financial Control and financial performance

This is the supervision and monitoring of finance to ensure that the required funds are raised and

spent as planned (Mange, 2013). Financial control relates to the control of financial resources

while management control ensures that all activities of the organization are coordinated (Lecef,

2012).

Financial control is a methodological control of an organisation's operations through the

establishment of standards and targets regarding income and expenditure, and continuous

monitoring and adjustment of performance against budget. Budgetary control monitors and

compares the actual results against the budget and in case of any variance, then corrective

measures can be implemented (Cameron & Whetten, 2014). Control ensures that the objectives

set are being achieved. A comparison is made between plans and actual performance. The

difference between the two is reported to management for corrective action. Therefore, control is

not possible without planning (Burns & Frazer, 2016).

Monitoring and control are a deterrent process against misappropriation of funds in terms of

operations and conventions that show the boundaries of financial behaviour. According to

Mobegi (2009), financial monitoring and control process is a systematic and continuous one

which, is characterized by the following stages; Establishing targeted performance or level of

activity for each department of the organization by way of setting targets to be achieved

enhances the monitoring of the organization’s operation. Communicating details of the budgetary

policy to all the stakeholders for easy appreciation of the set targets and objectives enhances

ownership of the results achieved at the end of the day (Mbogo, 2011). Monitoring absolute

revenue or finance data is done by way of continuous comparison of absolute performance with
the financial performance and regular reporting of variances to the responsible officers. This

helps in asserting the reasons for the differences between absolute and financial performance and

taking the suitable corrective action. The “bottom-top “approach of budgeting allows

participation of all levels of management in the decision-making process. Negotiations then

begin between the corporate office and department heads to finalize budgetary figures. The

financial planning process then shifts to a "tops-down “approach, where the corporate office has

ultimate control to adjust the final budget. Through this process of monitoring, analysis and

control, the problem of "ratcheting" is generally avoided (National Planning Authority, 2010). A

financial control process assumes that expenditure must agree with the budgeted plans and

maintains information about expenditure. Financial control is also one of the most important

aspects of business planning. By means of financial control, which means balancing absolute

results with planned events and reporting on the variations, a perfect margin is set for

management (Musabe, 2015). This frame points to managers to track the flow of resources

accurately and constantly. This calls for an unstoppable control process throughout the year, and

not just at the end of a financial planning time frame.

The main objective of financial monitoring is to plan the policy of an organisation to coordinate

the activities of that organisation so as to achieve the targets set. According to Ngugi and Bwisa

(2013) financial control and monitoring ensures efficient and finance-effective program

execution within a system of responsibility. Nevertheless, he observes that the current financial

control systems must be complemented by further improvements in the overall program

monitoring for better financial performance following approved study plans. The above process

demands comprehensive planning and approval framework, consistent with processes for
constructing budgets of revenue and capital. A sound approach for assessing the fiscal impact of

projected expenditures, compatible with other management and performance data and a system

of control that define clear responsibilities and gives accurate and timely monitoring information

on performance against budgets is significant.

Financial evaluation implies towards the stage to which financial planning variances are tracked

back to single department heads and adopted in assessing their performance (Parliamentary

Centre, 2010). Moreover, the patterns in which budgets are used in performance assessment are

likely to have an impact on the behaviour, performance and attitudes of the participants. For

instance, a punitive approach could result into lower motivation as well as unconstructive

attitudes. While, on the other hand a Oladipo (2011), argues that in order to achieve the expected

production results, monitoring and evaluation is necessary. Monitoring and evaluation maintain

stability under many competing forces, hence important to lower some organizational

effectiveness (Shah, 2009). However, Waddell (2013) continues to note that monitoring and

evaluation require only raw data to test and examine financial performance which is time-

consuming yet contributes little to financial performance. Perhaps, the requirement to establish

the level of control and controlled in realizing sound budget management and performance.

Supportive approaches might lead to positive attitudes along with behaviour (Nanozi, 2014).

2.3.4 Financial reporting and financial performance

Ngugi and Bwisa (2013) assert that financial reporting in dynamic environments affect financial

performance. Mostly because information is shared more extensively and frequently when
participants perceive good communication. It is however crucial to get an insight to how the

financial planning process looks to grasp how the perception of financial reporting affects it.

A thorough understanding of the business is needed to reach an accurate financial performance to

manage costs for the upcoming period. Therefore extensive financial reporting is necessary to

eliminate the effects of information asymmetry (Parliamentary Centre, 2010). At Trinity Primary

School, the Accounts department act as the link between the top management and the line

management in the financial planning process. Therefore we want to focus our attention on the

internal communication between the finance function and line Managers during the financial

management process.

Despite the importance of business reporting in the financial management process, there is a gap

in this area of research. Past research either focuses on the financial management process

excluding the financial reporting aspects. Consequently, we see a need to develop a model to

understand the factors financial reporting during specifically the financial management process

(Nanozi, 2014).

As budget requests go up the chain for review/approval, upper management can consider these

priorities relative to those from other organizational units. Funding decisions are then reported

back down the chain to communicate the priorities for the organization as a whole. This also

communicates the organization's priorities to external stakeholders. To accomplish the

communication, both internally and externally, the process and underlying information must be

transparent so all involved understand the decisions made. The main purpose of internal
communications is to engage and encourage the motivation and commitment of employees by

ensuring an understanding of the company’s objectives and goals (Shah, 2009).

2.5 Summary of the Literature Review

As far as financial planning and financial performance at Trinity Primary School is concerned,

the school makes annual budgets but during implementation, they strive to work within the

approved budgets and carry out procurements about the original budget not ignoring the fact that

financial control is relatively strong and as such performance variance occurs. Therefore this

study will help to close the gap between financial planning and actual financial performance

through various analysis adherence to corrective measures such as create a self –governance

framework that subdivides the hierarchical organizational structure into smaller self-managing

units with managers that have authority to run their units as they see fit.

Considering the above literature, there is vivid evidence that gaps in the financial planning

process have a certain impact on on-budget performance. At Trinity Primary School where a

highly participatory with a widely consultative elaborate financial planning is assumed to

relatively fair; concerning the real attributes of financial performance. This necessitates this

research to be carried out.

 CHAPTER THREE

METHODOLOGY

3.1. Introduction

This chapter presents the research design, population of the study, sample size and selection

strategies, data collection methods, and instruments, data analysis and measurement of variable,

validity and reliability of instruments, data processing, and analysis that will be used in the study.

3.2. Research Design

Across –sectional case study design will be used for this study. Both qualitative and quantitative

approaches will be used. Across-sectional design is a probabilistic design intended to obtain

information or variables in a different context at a particular time. Dillman, (2000) asserts that a

cross-sectional research design collects information from a sample that has been drawn from a

predetermined population and is collected at just one point in time. Sekaran, (2003) contends that

with this survey, data is gathered just once, the study will cover a to answer three years research

question, Jill (2003) agrees with the above assertion that data is just collected once in a period

therefore, the researcher finds it appropriate to use the design because of a time limit and

resource constraint.

Amin (2005) contends that triangulation is a technique that involves collecting data from both

qualitative and quantitative methods, and tests the consistency of findings obtained through

different instruments. Furthermore, according to Amin, the qualitative approach promotes greater

understanding of not just the way things are, but also why they are the way they are. According

to O'Donoghue and Punch (2003), triangulation is a method of cross-checking data from multiple

sources to search for regularities in the research data. Triangulation is usually applied to confirm

or challenge the findings of one method with those from another. Triangulation has been
recommended by many authors as a good way to obtain multiple answers to specific questions

from different respondents. Taking this view forward, this study will, therefore, seek to obtain

and describe the findings that promote understanding of financial management and financial

performance of private primary schools in Uganda. On the other hand, a quantitative approach

will be used to collect data to investigate the relationship between financial management

practices and financial performance.

3.3. Study Population

Neuman (2006) defines population as the specific pool of cases that the researcher wants to

study. The study population will constitute of a total of 48 staff and these will include 5 members

in the accounts department, 6 members of management (including the director, head teacher,

deputy head teacher, director of studies, head nursery section and deputy head nursery section), 7

class teachers and 30 classroom teachers.

3.4 Sample Size and Selection

Neuman (2006) defines sample size as the number of participants to be selected from the

universe to constitute a sample. The targeted sample size of 44 respondents will be determined

by using the sample determination as shown in Table 1 developed by Krejcie and Morgan (1970).

Therefore, out of a population of 48 a sample size of 44 respondents from different departments

will be selected. The sample is considered by the researcher to be useful in providing adequate,

valid and reliable data since it was drawn from all categories of employees and participants.
Table 1 study Population and Sample

Departments Population Sample size Sampling Techniques

Procurement and stores 5 5 Census sampling
Administration 6 6 Census sampling
Accounts department 7 7 Census sampling
Heads of Departments 45 26 Simple Random Sampling
Total 63 44
Source: School Human Resource Register, 2019

3.5. Sampling Techniques and Procedure

Mugenda and Mugenda (2003) defines sampling as the process of selecting units (e.g. people,

organizations) from a population of interest so that by studying the sample, one may fairly

generalize results back to the population from which they were chosen. The researcher will use

simple random sampling and purposive sampling methods to draw the sample.

Simple random will be used to select the heads of departments who will participate in the study

because according to Amin (2000) it avoids bias. Simple random sampling probably is the best

sampling method in which every unit of the targeted population will have an equal chance of

being selected. Census sampling will be applied to Procurement and stores, Administration, and

members in the accounts department. Census sampling will be used on a group of representatives

under this investigation, the study will obtain data from every unit of the study population thus

enabling the researcher to study more than one aspect of the all the items of the population.

3.6. Data Collection Methods

Data will be collected using three key methods: the questionnaire method, Interview method and

content analysis of document.

3.6.1. Questionnaire Survey

The researcher will administer the questionnaire in person to the respondents. As recommended

by Sekaran (2003), this method is time saving and many respondents will be covered within a

short and sensitive questions were confidentially answered since respondents names will not be

required. Questionnaire method gives time to a respondent to think and analyse the questions

asked before giving appropriate answer.

This is because according to Sekaran (2003), Self- administered questionnaires have several

advantages: the researcher will collect all the completed responses within a short period of time,

it is less expensive and the process consumes less time. The respondents will also be given an

assurance of confidentiality and it was stressed that the findings of the research will to be used

solely for academic purposes.

3.6.2. Interview method

Face to face interview will be used to collect data especially from key informants who include

management and technical staff. As noted by Sekaran (2003), the advantages of face to face or

direct interview is that the researcher can adopt the questions as necessary, clarify doubts, and

ensure that the responses are properly understood by replacing or rephrasing the question .

3.6.3. Documentary Review

Documentary review of the following reports on financial management practices, policy

statements and related documents, annual reports, and approved estimates of revenue and

expenditure (Recurrent and Development). Data from secondary sources will be supplemented

from that from primary sources to enable the researcher come up with comprehensive

conclusions. Analytical computer software (SPSS) was will be used to analyse collected data in
this research and Likert Scale will be used to in the questionnaire and interview schedules to

measure attitude, perception, values and behaviour of the different respondents.

3.7. Data Collection Instruments

The researcher will use the following instruments to collect data; semi structured questionnaires,

interview guides, and documentary checklist.

3.7.1. Questionnaires

Meyer (1999) observes that semi structured questionnaires are suitable tool to collect data when

targeted respondents are many in numbers and when they are literate. The questionnaire will be

used to collect data from members in the accounts department, academic staff and class teachers

since they are literate and some of them participate financial management process that affects

them either directly or indirectly.

3.7.2. Interview Guide

Meyer (1999) noted that interview schedules are used to collect in-depth qualitative data from

respondents, especially when the targeted respondents are considered as key informants and

literate enough to read and write required questions. Therefore pre-designed structured face to

face interviews will be administered on key informants. These will include management as

policymakers.

3.7.3. Documentary Review Checklist

The study will make use of, budget performance assessment reports, financial statements, budget

Act, financial performance statement, approved budget estimate, Evaluation reports, audit

reports, media reports earlier research in related fields.

3.8.0. Validity and Reliability of Instruments

Data quality control, which refers to the reliability and validity of instruments have to be

precisely described. Data quality control was used to achieve content validity and reliability

through the triangulation of methodologies and rigorousness. It is ensured through piloting. This

is encouraged as the pilot findings may enable you to re-design the research instruments to

improve the reliability and validity of data.

3.8.1. Validity of Instruments

To ensure the validity of the data collection instrument, a pre-testing will be conducted on 5

selected individuals under situations similar to those of the actual sample that will be used in the

study. Pre-testing or piloting was done since it is an important part of the questionnaire

construction process. This will be done not to report results but rather to check for glitches in

wording of questions, lack of clarity of instruction among others, in fact anything that impeded

the instruments' ability to collect data economically and systematically Synodinos, (2005). Pre-

testing instrument will identify some shortcomings such as repeated questions, wrong numbers

and insufficient space to write the responses. This will be done through expertise guides of

supervisor. The content Validity index will be used to measure the Validity of the instrument.

After a content validity index will be computed using a formula where:

Number of items rated relevant

CVI=
Total Number of items
3.8.2. Reliability of Instruments

Reliability of the research instrument is the extent to which the instrument produces consistent

results. Reliability of the instrument will be determined by carrying out a pilot study. According

to Mugenda and Mugenda (2003), a pilot study is a small scale version or trial run in preparation

for the major study. A small pilot study will be conducted using the questionnaire to test for its

reliability before carrying out the major study in order to ensure reliability of the research

instrument. In this study, 10 respondents will be randomly selected and asked to comment on

clarity, bias, ambiguous, etc of which the researcher personally calls 4 respondents for interview.

Reliability of the three set of SAQs on all variables will be tested using the Cronbach Alpha

Moment Co-efficient provided by SPSS (Amin, 2005).

k ∑ SD2 i
Cronbach’s Alpha is given as α=
k−1
1−( SD2 t )
Where:-

K = the number of items

∑ SD2 i= the variance of the total instrument.

SD2 t = the variance of individual items

3.9. Procedure of Data Collection

This requires the researcher to briefly explain the procedures that will followed in the data

collection exercise. The researcher will obtain an introductory letter from the Head of Research,

Uganda Management Institute which he will use to introduce himself to the head teachers

seeking permission to carry out the study in their respective schools. The researcher will

personally administer the questionnaires to respondents at Trinity Primary School.

3.10. Data Analysis

This spells out how the data was processed and summarized. It should indicate statistical tests

that will be carried out and how the resulting information was used for the research report.

Qualitative and quantitative data analysis will be employed

3.10.1 Analysis of Quantitative Data

The data collected will first be edited, coded, and classified according to attributes and then

tabulated into the computer. After this, data will be analyzed using a computer program called

the statistical program, for social sciences (SPSS) Version 20. Under this program frequency

tabulations, and Spearman correlation will be used to examine the financial management

practices and financial performance Multiple regression Analysis will be used to predict the

perceived relationship between study variables.

3.10.2 Analysis of Qualitative Data

Qualitative data will be analysed through continuous assessments while still in the field.

Different methods of analysis that will be used include content analysis, anecdotal analysis, and

narrative analysis. Under content analysis, the data collected will be cross-checked using the

questions that were put in the questionnaire and interview guide specifically to check

authenticity and correctness Anecdotal analysis will be used to enrich the information given with

vivid reporting.

3.11 Ethical Considerations

According to Oso and Onen (2008) the issue of ethics is very important in research. The major

ethical issues of concern according to them include; informed consent, privacy and
confidentiality, anonymity and the researcher’s responsibility. To this effect, the major ethical

issue in this study will be highly privacy and confidentiality of the respondents. There will be no

element of coercion of participants, the researcher will explain about the study, its purpose and

why the participants were chosen. There will be no invasion of personal privacy of the

participants during the study. The content analysis method of data collection will require the

researcher to access different documents and reports which to some extent was confidential

though meant to be availed for public use by all stakeholders, the researcher inclusive. Data

collection through this study will be made possible with mutual collaboration of the researcher

with all target respondents of this study. Consent of participants (respondents) in this study

sought before data collection using a research authorization letter. The participants of the study

will be made aware and informed about the study, the researcher asked for their permission to

collect data.

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(SMEs) in Port-Harcourt City,. European Journal of Sustainable Development, 3(1),
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Akerlof, G. A. (2011). The Market for “Lemons”: Quality Uncertainty and the Market
Mechanism. Quarterly Journal of Economics, 84(3), 488–500.
Akorsu, P. K., & Agyapong, D. (2012). Alternative Model for Financing SMEs in Ghana.
International Journal of Arts and Commerce, 1(5), 136–148.
Ahmed I. H., Babar Z. B. and Kashif, R. (2010). Financial Management Practices and Their
Impact on Organizational Performance. World Applied Sciences Journal, Vol. 9, No. 9,
pp. 997-1002.
Anthony, R. and Young, D. (2014). Management Control in Not-for-profit Organizations, Vol III
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Small and Medium Enterprises (SMEs) in Cote d’Ivoire. International Journal of
Business and Social Science, 6(4), 141–150. Retrieved from www.ijbssnet.com
Burns, J., Fraser, R.W. (2016). Conceptualizing Management Accounting Change: An
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Lecerf, M.-A. (2012). Internationalization and Innovation: The Effects of a Strategy Mix on the
Economic Performance of French SMEs. International Business Research, 5(6), 2–3.
Mange, D. (2013). management challenges facing Kenyan Public Universities.
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Entrepreneurship in Africa, 3(1), 109–132. http://doi.org/10.4314/jolte.v3i1.66602
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management information system (IFMIS) as a tool for sustainable financial
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Musabe, H. N. (2015). A survey of the extent of implementation of integrated financial
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management in government. Unpublished MBA project, Makerere University.
Nanozi, D. M. (2014). An Evaluation of the Main Factor Affecting Credit in Kampala City.
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 APPENDICES
Appendix 1 ; QUESTIONNAIRE FOR TRINITY PRIMARY SCHOOL-BUKOTO
EMPLOYEES

Dear Sir/Madam

My name is Daniel Turyasingura a student at UMI doing a Masters in Public Administration

(MPA) I am carrying out a research on “financial management practices and financial
performance of private schools in as a requirement for partial fulfillment for the award of MPA.
Kindly spare your valuable time and respond to the following questions. The answers are
required to contribute to an academic research.

The answers you give will be treated with utmost confidentiality and there should be no fear of
information disclosure to anyone outside this research. You therefore need not put your name on
this questionnaire.

Thank you for your cooperation.

Daniel Turyasingura

SECTION A: DEMOGRAPHIC DATA

Please tick the option you consider the most appropriate

1. Your Gender (a) Male (b) Female

2. Your Marital Status

(a) Married (b) Single (c) Divorced
(e) Widowed
3.Your age (a) 20-30 years
(b)31-40years
(c) 41-50years
(d) 51and Above

4.Your highest completed level of education:

(a) Secondary (b) Diploma (c) Graduate Degree

(d) Degree (e) Professional Qualification (e.g. ACCA, ICSA, CIMA)

6. Number of years’ service at the school:

(a)1-5 (b) 6-10 (c) 11 and above

In the sections that follow, please tick the most appropriate option as shown below;
5= Strongly Agree; 4 = Agree; 3 = Not Sure; 2 = Disagree; 1 = Strongly Disagree.
SECTION B:
Strongly Agree

Agree
Not Sure

Disagree
Strongly Disagree

No. Independent Variable: Financial management practices

B.1 Financial planning

7. Management ensures that all Units are involved in the
financial planning process
8. The Units find the level of Involvement in the financial
planning process beneficial
9. Financial planning process is a widely consultative exercise
10 The financial planning process follows a bottom-up
approach capturing all employees’ needs
11 Employees’ ideas are valued in the financial planning
process
12 Ideas generated during the financial planning process form
part of the budget priority areas.
13 Management listens to employees’ ideas about ways to
change or Improve the budget estimates or forecasts.

B2 Financial control
14. Management instructs units to work towards financing
targets
15. Planned targets are regularly referred to when reviewing
financial plans
16. There are deliberate periodic financing review meetings at
departmental and management level.
17. The financing review recommendations are effected in the
subsequent financial adjustments
18. Factors leading to financing variances are investigated and
control measures instituted
19. Discrepancies in the financing targets are regularly
explained in the management and staff meetings.
20 The estimated level of budget monitoring and control in
your department is Satisfactory
21 Financial performance reports are prepared monthly
22 The top management always holds finance meetings to
check performance

B3 Financial Reporting
23 There are clear channel of communication during financial
management process.
24 All stakeholders are informed of their units’ budget
adjustments and changes as a Communication mechanism
25 Employees get feedback from supervisors on their financing
proposals.
26 Employees get feedback from supervisors on the approved
financing priorities

Dependent Variable : Financial performance

27. Financial management practices positively impact the
returns on investment
28. Our return on assets are boosted by proper financial
 management practices
29 Proper financial management impacts on the return on the
capital employed by the school
30 Due to clear policies and procedures on finances, we have a
higher economic value added each year

Appendix II; INTERVIEW GUIDE

 Appendix III
SAMPLE SIZE DETERMINATION
Table giving recommended sample size (s) for given populations (N)
N S N S N S N S N S
10 10 100 80 280 162 800 260 2800 338
15 14 110 86 290 165 850 265 3000 341
20 19 120 92 300 169 900 269 3500 346
25 24 130 97 320 175 950 274 4000 351
30 28 140 103 340 181 1000 278 4500 354
35 32 150 108 360 186 1100 285 5000 357
40 36 160 113 380 191 1200 291 6000 361
45 40 170 118 400 196 1300 297 7000 364
50 44 180 123 420 201 1400 302 8000 367
55 48 190 127 440 205 1500 306 9000 368
60 52 200 132 460 210 1600 310 1000 370
65 56 210 136 480 214 1700 313 15000 375
70 59 230 140 500 217 1800 317 20000 377
75 63 240 14 550 226 1900 320 30000 379
80 66 250 148 600 234 2000 322 40000 380
85 70 260 152 650 242 2200 327 50000 381
90 73 270 155 700 248 2400 331 75000 382
95 76 159 750 254 2600 335 100000 384
Source: Krejcie, R.V and Morgan, D.W. (1970)

“S” is sample size

Using the above methods as a guideline, the following section aims to compare two approaches
in determining the sample size of a population using a) Krejcie and Morgan (1970) and b) Cohen
Statistical Power Analysis.
Estimation of sample size in this research using Krejcie and Morgan was employed.
Krejcie and Morgan (1970) used the following formula to determine the sampling size.
S = X2NP (1 – P) / d2 (N – 1) + X2P (1 – P)
S = required sample size
X2 = the table value of chi-square for one degree of freedom at the desired
confidence level.
N = the population size
P = the population proportion (assumed to be .50 since this would provide the maximum sample
size)
d = the degree of accuracy expressed as a proportion (.05)