Impact of Financial Pressures on Procurement Fraud of Public National Referral Hospitals in Nairobi County, Kenya

Victor Ochieng Omata, Benson Gathoni and George Musumba
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Victor Ochieng Omata: Institute of Criminology, Forensics, and Security Studies, Dedan Kimathi University of Technology
Benson Gathoni: Department of Physical Education, Exercise & Sports Science, Kenyatta University
George Musumba: School of Computer Science and Information Technology, Dedan Kimathi University of Technology, Kenya

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 9, 2255-2268

Abstract: Although public procurement is expected to play a central role in ensuring that hospitals deliver effective and efficient services, this objective has not always been met due to marauding fraudulent practices in the acquisition of medical supplies. The government of Kenya has since adopted a myriad of regulatory and legislative measures to counter public procurement fraud in the health sector, but the problem still persists. Only limited studies have attempted to examine the role of financial pressures in catalyzing procurement fraud among National Referral Hospitals (NRHs) in Kenya. Based on the Fraud Diamond Theory (FDT), this study assessed the effect of perceived financial pressure on procurement fraud in public NRHs. The specific objective of the study was to examine the impact of perceived financial pressures (personal financial strain, job security concerns, financial incentives for fraud, external financial pressures, and perceived unfair compensation) on procurement fraud of public NRHs. A quantitative approach and a cross-sectional descriptive survey design were employed. The sample size was made up of 101 procurement and supply chain management personnel drawn randomly across three public NRHs in Nairobi County, Kenya. Data were collected through a structured questionnaire and analyzed using SPSS version 29.0.2. The findings of the correlation and linear regression analysis reveal that perceived financial pressure significantly influences procurement fraud in public NRHs. Specifically, perceived financial pressure explains 26.6% (R² = .266) of the variance in procurement fraud. The study concludes that procurement and supply chain management officers under financial strain, whether due to personal or professional reasons, are more likely to engage in fraudulent activities as a means of alleviating their financial burdens. The study argues that there is a need for public NRHs to address the financial well-being of their procurement staff to mitigate the risk of fraud. Future research could explore other potential drivers of procurement fraud in different public sector contexts to further generalize these findings.

Date: 2024
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