Moderating Effect of Integrated Financial Management Information System Use on the Relationship between Supply Chain Practices, Procurement Performance of Lake Region Economic Bloc Counties, Kenya

Abstract

Procurement performance of county governments in Kenya, particularly within the Lake Region Economic Bloc (LREB), continues to face challenges despite the implementation of the Integrated Financial Management Information System (IFMIS). Recent studies and audit reports have highlighted non-compliance with procurement regulations, particularly in cost performance, where counties have experienced cost overruns, excessive delays, and poor budgetary control. Auditor General’s reports on LREB counties indicate persistent inefficiencies in managing procurement costs, with many projects surpassing their initial budget allocations by over 30 percent. Moreover, quality control and timely delivery issues related have negatively impacted overall procurement performance, raising concerns about effectiveness of supply chain practices in these counties. While supply chain practices are known to influence procurement performance, their impact might be significantly moderated by use of IFMIS. The Lake Region Economic Bloc counties have made strides in adopting the IFMIS system, but there is limited understanding of how its use moderates relationship between supply chain practices and procurement performance. This study examined the moderating role of IFMIS use between supply chain practices and procurement performance focusing on cost performance, timely delivery, quality, and budgetary compliance in LREB. By analyzing how IFMIS enhances or limits supply chain effectiveness, study aimed to offer solutions to improve procurement performance through better compliance, cost control, and transparency in the public procurement system. Specific objectives were to: establish effect of supply chain practices on performance; determine effect of IFMIS use on procurement performance, establish moderating effect of IFMIS use on between supply chain practices-performance. Study was conceptualized based on resource-based view theory by linking supply chain practices, IFMIS use and performance and adopted positivist philosophy in correlational research design. Target population was 382 staff (chief, procurement, finance officers) with 196 staff selected using proportionate stratified random sampling. Primary data were collected through 181(92.3%) useful questionnaires. A pretest was done in Uasin Gishu county where 20 staff was selected indicated instrument reliability at Cronbach’s Alpha coefficient α=0.9563. Validity confirmed by expert reviews, correlations matrix (SCP; r= 0.769, p=0.00), (IFMIS; r=0.773, p=0.00) since R-values were above 0.7. Multiple regression was adopted for data analysis and findings revealed supply chain practices have a significant positive effect (R2=0.500, β = 0.708; t=12.35, p<0.05), IFMIS use have significant positive effect (R2 =0.489, β=0.649, t=10.665, p<0.05) implying unit implementation of supply chain practices, IFMIS use results into 0.708, 0.649 units increase on performance respectively. Moderated regressions analysis revealed interactive effect (R2=0.110, β=0.393, t=8.555, p<0.05), confirming unit use of IFMIS increased procurement performance by 11 percent. Findings ratify theoretical evidence that counties create value by adopting IFMIS. Study concluded effective IFMIS use can lead to significant improvements in LREB counties procurement outcomes. Study recommended LREB devolved governments to prioritize the integration of IFMIS with supply chain management practices to fully realize the potential benefits for procurement performance. Study indicates, IFMIS use and supply chain practices leads to improved results. In practice, it contributes to knowledge on supply chain management and procurement policy formulation on procurement.