The impact of economic crimes on effective revenue collection among county governments in Kenya: a case of Nairobi City County

Abstract

Devolution has enabled the formation of forty-seven county governments apart from the national government. This means that the counties are able to conduct their businesses thus money circulation. This said, the probability of fund leakage through economic crimes is inevitable, hence, the need for this study. Generally, this study investigated the impact of economic crimes on effective revenue collection among county governments in Kenya with a specific focus on Nairobi County Government, this county being the capital city of Kenya. The specific objectives of the study included; to establish the impact of procurement fraud on effective revenue collection among county governments in Kenya, to determine the effects of asset misappropriation on effective revenue collection among county governments in Kenya, to establish the effects of bribery and corruption on effective revenue collection among county governments in Kenya, and to evaluate the impact of accounting fraud on effective revenue collection among county governments in Kenya. The study adopted a descriptive survey design with a target population of 12,186 employees of Nairobi County Government. Using a stratified random sampling procedure, the study estimated a sample size of 373 individuals out of which 226 successfully filled the semi-structured questionnaire survey. From the correlation and regression analysis conducted, the findings reported that there is an inverse relationship between procurement fraud and effective revenue collection. The result suggested a significant negative effect of procurement fraud on effective revenue collection within Nairobi City County. Similarly, the study demonstrated an inverse relationship between bribery and corruption and effective revenue collection. The results implied a significant negative effect of bribery and corruption on effective revenue collection among county governments in Kenya. Finally, the study reported that there is no relationship between both asset misappropriation and accounting fraud as economic crimes and effective revenue collection. This study concluded that an increase in procurement fraud and bribery and corruption practices among county officials negatively affect effective revenue collection. The study also concluded that though both asset misappropriation and accounting fraud did not have a significant relationship with effective revenue collection, they remain some of the economic crimes that relevant bodies in charge of revenue collection at county offices must pay attention to. The study recommends for future research to use different methodological approach to conduct a similar study either in Nairobi County Government or other county governments in Kenya.