The role of procurement practices on the financial performance of non-government organizations

Abstract

This study was undertaken with the aim of assessing the role of procurement practices on the financial performance of Non Government Organizations: A Case of Rakai Health Sciences Program. Procurement practices are a set of activities undertaken by an organization to promote effective management of its supply chain (Sollish & Semanik, 2012). The study objectives included to determine the relevance of having a procurement plan in the procurement process, to examine the benefits of record keeping during the procurement process on financial performance and to analyze the effect of contract management on financial performance NGOs. The study adopted a mixed approach. The cross-sectional research design where quantitatively data was collected using structured questionnaires targeting Administration and other departments of RHSP whereas qualitatively face to face interactions were used. Data was analyzed using SPSS, which when used provides a variety of statistical measures like percentages and mean. The study achieved 100% response rate since all questionnaires administered were filled and returned. The study population comprised of fifty five people out of which forty eight respondents were selected using Morgan’s method as the researcher picked on respondents basing on their role in the procurement process in arriving at the sample size. The analysis of the primary data indicated that procurement planning, records keeping and contract management all have a positive effect on financial performance of NGOs as revealed by the findings of the study. The researcher, therefore, recommends NGOs to ensure effective procurement planning for uniform procurement systems, keeping of sound procurement records to promote decision making, transparency and accountability as well as having an agreed contract management plan to avoid poor quality services hence enhancing achievement of value for money. This in turn will promote good financial performance among NGOs.