Abstract:
This study was an assessment of factors influencing the effectiveness Performance Contracting
from in Service Delivery in Local Authorities of Kenya. Public outcry on quality of services is
not uncommon in public sector more so in Local Authorities. Despite Government’s inputs and
concern and introduction of performance contracting, performance of Local Authorities on
service delivery is far below expectation. It is for this reason that the current study sought to
assess the factors influencing Performance Contracting in Service Delivery in Local Authorities
in Kenya. Specifically, the study wished to address whether Financial Management has an
influence in performance contracting. Corelational research design was used to conduct the study
in 175 Local Authorities in Kenya. A sample of 18 Local Authorities was selected using a
stratified sampling technique. The respondents from the Local Authorities included officers from
all cadres of staff who wre randomly chosen from the sampled Local Authorities. The study
findings indicated that financial management practices influenced performance contracting.
Specifically, the study showed that the budget variances were not investigated and rectified,
revenue collection and usage was not free from political interferences and all debtors were not
followed in time. The study concludes that the financial management practices of Local
Authorities are poor and ineffective. It can be concluded from this study that there exists a
positive significant relationship between financial management practices and performance
contracting of Local Authorities. The results reveal that financial management practices are
statistically significant in explaining effectiveness of performance contracting of local authorities
in Kenya. The study recommends that the council should put in place measures to safeguard the
