The relationship between automated cash management and the quality of financial reporting in Kasese district local government. A cross-secional study.

Abstract

Background: Effective cash management is vital for fiscal sustainability and accurate financial reporting. This study explored the link between automated cash management practices and reporting quality.

Methods: This study employed a descriptive, correlational, cross-sectional design. Data was collected from 100 district staff, using surveys and interviews. Statistical analysis was conducted using SPSS to compute correlation coefficients.

Results: In this study 71% are male and 29% female, 48% aged 36-45, 56% with 6+ years,and  78% hold a degree. A moderate to strong positive correlation was identified between cash management and financial reporting quality (r = 0.675, p<0.01). While the system allowed effective continuous cash flow monitoring (Mean=4.486), respondents reported severe inefficiencies, including delays in fund releases (Mean=4.644), cash shortages (Mean=4.217), unauthorized payments (Mean=4.176), and poor revenue collection (Mean=2.320).

Conclusion: While IFMS provides tools for monitoring, systemic operational failures in cash handling severely undermine the accuracy and completeness of financial reports, reflecting a disconnect between system capability and practice.

Recommendation: The district should introduce automated alerts for overspending, and mandate strict adherence to cash flow forecasts and approved ceilings across all spending units.