FACTORS INFLUENCING COMPLIANCE TO PROCUREMENT REGULATIONS IN PUBLIC SECONDARY SCHOOLS IN KENYA: ACASE OF NYAMACHE DISTRICT, KISII COUNTY.

Transcription

1 FACTORS INFLUENCING COMPLIANCE TO PROCUREMENT REGULATIONS IN PUBLIC SECONDARY SCHOOLS IN KENYA: ACASE OF NYAMACHE DISTRICT, KISII COUNTY. Abstract Jane Onyinkwa School of Human Resource Development, Entrepreneurship and Procurement Department. Jomo Kenyatta University of Agriculture and Technology. P.O BOX , Nairobi, Kenya. William Masaka Ondieki, Kevin Moindi Omai (Research Assistants) This research dealt with the factors influencing compliance of procurement regulations in public secondary schools in Nyamache sub-county. Nyamache sub-county was selected because public schools within the district are worst hit by non-compliance to public procurement regulations. This study concentrated on three variables; ethics in public procurement act, knowledge/training and committee s awareness as factors deemed to influence compliance of procurement regulations in public secondary schools in Nyamache sub-county. This study was conducted through a descriptive survey research design. The study involved 15 public secondary schools in Nyamache sub-county. This research project was guided by research questions based on the variables aforementioned. Literature related to this study was reviewed based on the variables; ethics, staff training and awareness as factors deemed to influence compliance on procurement regulations in public secondary schools in Nyamache sub-county. Data was collected by use of the questionnaire and reliability of research instruments was tested using test-retest technique and validated by experts in academic research. Stratified random sampling and simple random sampling was used to select the sample size of 135 respondents. The data was collected and analyzed by descriptive statistics: simple frequencies and percentages. Data was presented in descriptive form supported by frequency counts and percentages. From the research findings it can be concluded that ethics, awareness and training influences the compliances of procurement regulations in public secondary schools. The following recommendations were made: It is important to offer ethics education to school tendering committee members in order to ensure they serve in ultimate objectivity, accountability, and non discrimination. Further research should be undertaken on the following areas: effects of compliance on quality of goods and services procured in public secondary schools, challenges facing the enforcement of public procurement regulations in public secondary schools and challenges facing e-procurement in public secondary schools. Key Terms: Compliance of Procurement Regulation, Level of Awareness and Staff Training. 1.0 INTRODUCTION 1.1 Background of the Study Worldwide, public procurement has become an issue of public attention and debate, and has been subjected to reforms, restructuring, rules and regulations. Public procurement refers to the acquisition of goods, services and works by a procuring entity using public funds (World Bank, 1995a). According to Roodhooft and Abbeele (2006), public bodies have always been COPY RIGHT 2013 Institute of Interdisciplinary Business Research 561

2 big purchasers, dealing with huge budgets. Mahmood, (2010) also reiterated that public procurement represents 18.42% of the world GDP. Although several developing countries have taken steps to reform their public procurement systems, the process is still shrouded by secrecy, inefficiency, corruption and undercutting. In all these cases, huge amounts of resources are wasted, (Odhiambo and Kamau, 2003). In developing countries, public procurement is increasingly recognized as essential in service delivery (Basheka and Bisangabasaija, 2010), and it accounts for a high proportion of total expenditure. For instance, public procurement accounts for 60% in Kenya (Akech, 2005), 58% in Angola, 40% in Malawi and 70% of Uganda s public spending (Wittig, 1999; Government of Uganda, 2006) as cited in Basheka and Bisangabasaija (2010). This is very high when compared with a global average of % (Frøystad et al., 2010). Due to the colossal amount of money involved in government procurement and the fact that such money comes from the public, there is need for accountability and transparency, (Hui et al., 2011). Consequently, various countries both in developed and least developed countries have instituted procurement reforms involving laws and regulations. The major obstacle however, has been inadequate regulatory compliance. De Boer and Telgen (1998) confirm that noncompliance problem affects not only the third world countries but also countries in the European Union. This position is further supported by Gelderman et al., (2006) who contend that compliance in public procurement is still a major issue. Hui et al., (2011) while analyzing procurement issues in Malaysia established that procurement officers were blamed for malpractice and non-compliance to the procurement policies and procedures. Citing Yukl (1989), Gelderman et al., (2006) stipulate that compliance occurs when the target performs a requested action, but is apathetic about it, rather than enthusiastic, and puts in only a minimal or average effort. However, as an organizational outcome, compliance has traditionally been understood as conformity or obedience to regulations and legislation (Snell, 2004) cited in Lisa, (2010). For instance in Uganda, a wave of procurement reforms that begun in 1997, culminated into the enactment of the Public Procurement and Disposal of Public Assets (PPDA) Act 2003, and regulations Unfortunately, many central government ministries and agencies have since then not followed prescribed practices (Agaba & Shipman, 2007). The procurement audits carried out by the PPDA have revealed that out of 322 contracts audited at the end of 2005, only 7 (2%) were assessed as compliant. Other successive audit checks reveal that compliance in public procurement in Uganda is still inadequate (PPDA compliance reports, 2009; PPDA Baseline survey report, 2010; PPDA Capacity Building Strategy Report, ; World Bank Country Procurement Assessment Report, 2001) cited in Tukamuhabwa B. R(2012). According to Kenyanya et al., (2011), Kenya has undergone significant development in the past three decades. From being a system with no regulations in the 1960s to a system regulated by Treasury Circulars in the 1970s, 1980s and 1990s, the introduction of the Procurement Regulations of 2006 brought new standards for public procurement in Kenya. Many studies were carried out on procurement before the Public procurement and Disposal Regulations of 2006 to evaluate the efficiency of the procurement process in existence at the time, (Kipchilat, 2006). The major findings of the studies were that public procurement was not operating efficiently and that the state was losing a lot of money through shoddy deals. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 562

3 These regulations became effective in Kenya on 1st January 2007 after the gazettement of the Public Procurement and Disposal Regulations Act The purpose of this Act is to establish procedures for procurement and the disposal of unserviceable, obsolete or surplus stores and equipment by public entities to achieve efficient management of public funds. The act contains eleven (11) parts. The Principal reason for the enactment of the Act was to have a legal regime that weeds out inefficiencies in the procurement process, remove patterns of abuse, and the failure of the public purchaser to obtain adequate value in return for the expenditure of public funds. However, these objectives have never been fully achieved in practice, (Wanyama, 2010). Wanyama notes further that key provisions of the Act and the Regulations are replete with textual weaknesses that have often been abused by procuring entities. The Regulations do not envisage contemporary market realities hence the need to continuously revise them to keep pace with these developments. In a study conducted in Kenya by the PPOA (2007), the introduction of the legal and regulatory procurement framework; the establishment of the PPOA as an oversight body; the development of a framework for contract administration and the new appeals mechanism were among those aspects of the procurement system rated as having been positively affected by the Regulations. In contrast, the existing institutional development capacity in procuring entities and functioning of the procurement market were assessed as being among the weakest aspects of the system. The report noted that although procedures supporting systematic procurement planning have been established, research showed that these are far from always being complied with. It was found out, for example, that there was a low share of procurements that were done through open tendering. Another study by KPMG International carried out after the introduction of the Regulations, it was still found out that public procurement still suffers from fraud and misconduct (KPMG, 2008). A study by KACC, also noted that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others. The introduction of the Regulations almost coincided with the introduction of Free Secondary Education (FSE) in The PPDR included public secondary schools among the institutions whose procurement systems were to be regulated by the Regulations. The Public Procurement and Disposal Act granted teachers and subordinate staff the power to control the tendering and procurement process in public schools by setting of Tendering Committees to oversee the whole process of procurement. This was also aimed at decentralizing the procurement process which was a preserve of Principals for a long time. The disbursement and utilization of funds meant for Free Secondary Education (FSE) programmer is subject to the provisions of the Government Financial Management Act, 2004 which emphasizes on good financial management in public institutions. The Public Procurement and Disposal Regulations were supposed to supplement towards this goal by making public procurement more transparent (PPOA, 2007). In a study by Kenyanya et al., (2011) found that the established legal and regulatory framework in pubic secondary schools in Kenya has added some strength to the public procurement system, weaknesses still exist in the framework. For example, although open tenders were found to be the preferred method of tendering used by most of the public secondary schools thus bringing it closer to its intended status as the default method of procurement, it is clear that the procurement functioning needs to developed further and considerable effort put into defining strategies for how to make open tendering the main method of procurement. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 563

4 1.2 Statement of the Problem The aim of the Public Procurement Regulations of 2006 was to promote fairness, transparency and nondiscrimination in procurement in public institutions with the main aim of ensuring efficient use of public funds. However, studies reveal that even after the enactment of the Regulations, there are losses of public funds that can be attributed to public procurement. A survey carried by the Kenya publishers association on booksellers indicates how book distributers collude with school principals to embezzle money set aside for free education in public secondary schools in Kenya (Wanyama, 2010). Further, studies indicate dissatisfaction among stakeholders brought about by loopholes left by the Regulations which may be used by dishonest people to make the process inefficient (Kenyanya, 2011). Compliance levels continue to be low in public entities in Kenya despite efforts by the Public Procurement Oversight Authority (PPOA) to put in place measures to improve compliance (PPOA 2007). Procurement audits carried out revealed non compliance with procurement regulations in public secondary schools. In Nyamache district, it has been noted that school tendering committees distort the Regulations to restrict the participation of interested suppliers in procurement, or still direct the outcome of others (District Audit report ). This study therefore sought to investigate factors influencing compliance of Procurement Regulations in Public Secondary Schools in Nyamache district, Kenya. 1.3 Objectives General Objective The research intended to assess the influence of compliance on procurement regulations in public secondary schools in Nyamache district Specific Objectives of the Study This study was guided by the following specific objectives; 1. To establish the influence of ethics on compliance of procurement regulations public secondary in Nyamache district. 2. To evaluate the influence of level of awareness on compliance of procurement regulations and procedures in public secondary schools in Nyamache district. 3. To investigate the contribution of staff training on compliance of public procurement in public secondary schools in Nyamache district. 1.4 Research Questions This study sought to answer the following research questions; 1. How does committee s procurement ethic influence compliance of procurement regulations public secondary in Nyamache district? 2. How does staff s level of awareness influence compliance of procurement regulations in public secondary schools in Nyamache district? COPY RIGHT 2013 Institute of Interdisciplinary Business Research 564

5 3. What the contributions of staff training on compliance of public procurement in public secondary schools in Nyamache district? 1.5 Justification of the Research While a lot of attention has been directed toward implementation procedures in acquisition of goods and services in public secondary schools, little has been done to establish the best practices in compliance to procurement regulations public secondary schools in Kenya. This study intends to investigate the factors influencing compliance of procurement regulations in public secondary schools in Nyamache district. It is intended that the findings of this research project may be useful to schools in Nyamache district in strengthening the acquisition, implementation and integration of procurement practices in administration. The study will also inform government policy with regard to designing changes to streamline the acquisition of goods and services in educational institutions as set by the public procurement act of 2007 and Ministry of Education. The study also formed a basis on which academic researchers can do further studies on compliance in public procurement in educational institutions. 1.6 Scope This study dealt with the factors influencing compliance of the procurement regulations in public secondary schools in Nyamache district. Nyamache district was selected because public schools within the district are worst hit by the problem. This study concentrated on three variables; professional ethics, staff s awareness and staff training/knowledge on procurement procedures as factors deemed to influence compliance of public procurement regulations in public secondary schools in Nyamache district. This study was conducted through a descriptive survey research design. The study involved 47 public secondary schools in Nyamache district. The target population included all the tendering committee members in public secondary schools. Questionnaires and an interview schedule were used as instruments to collect data. 1.7 Limitations of the study A study of this magnitude cannot be possible without limitations. Some of the respondents might not have been willing to reveal true information needed for the study. This was solved through explanation of the benefit of the study to the respondents. Some of schools were located in remote areas this hindered their accessibility. This was solved by sending the questionnaires through the postal offices. 2.0 LITERATURE REVIEW 2.1 Theoretical Framework As cited by Defee et al., (2010), good research should be grounded in theory (Mentzer et al., 2008). In this study was be guided by institutional theory and socio-economic theory. The institutional theory is the traditional approach that is used to examine elements of public procurement (Obanda 2010). There is no single and universally agreed definition of institution or institutional theory. According to Scott (2004), institutions are composed of cultural-cognitive and regulative elements that, together with associated activities and resources give meaning to life. The author explains the three pillars of institutions as regulatory, normative and cultural cognitive. The regulatory pillar emphasizes the use of rules, laws and sanctions as enforcement mechanism, with expedience as basis for COPY RIGHT 2013 Institute of Interdisciplinary Business Research 565

6 compliance. The normative pillar refers to norms (how things should be done) and values (the preferred or desirable), social obligation being the basis of compliance. The culturalcognitive pillar rests on shared understanding (common beliefs, symbols, shared understanding).in Kenya, public procurement has is guided by the PPDA Act (2007), regulations and guidelines which are from time to time issued by the PPDA Authority only and which must complied with to the latter by all PPOA and providers. Sutinen and Kuperan (1999) propounded the socio-economic theory of compliance by integrating economic theory with theories from psychology and sociology to account for moral obligation and social influence as determinants of individuals decisions on compliance. According to Lisa (2010) psychological perspectives provide a basis for the success or failure of organizational compliance. Wilmshurst and Frost (2000) also add that the legitimacy theory postulates that the organization is responsible to disclose its practices to the stakeholders, especially to the public and justify its existence within the boundaries of society. This theory, which focuses on the relationship and interaction between an organization and the society, provides a sufficient and superior lens for understanding government procurement system (Hui et al., 2011). From this theory, the perceived legitimacy of public procurement rules has been identified as one of the antecedents of public procurement compliance behavior The concept of Procurement Procurement which as defined by the Software Engineering Institute (2008) at Carnegie Mellon, is a set of activities performed as part of an acquisition effort. It involves process of acquiring goods, works and services, covering both acquisitions from third parties and from in-house provides. Public procurement is the acquisition by purchase, rental, lease, hire purchase, license, tenancy franchise or any other contractual means of goods or services by the government. (Telgen 1998). It starts from the identification of needs to the end of service contract or end of useful life of an asset. Darrel (2002) says the term procurement is used to describe the purchase of goods and services which are no directly used in the main business of a company. For example a car manufacturer will procure training courses for employees to attend in order to improve their skills. However, thinking on procurement, other writers argues that, there are two sides, the demand side (i.e. where there are users of products who have needs to procure) and the supply-side which does the production and provision of goods and services to be supplied (Ngogo 2008) Public Procurement Systems and Practices across the World Public procurement is broadly defined as the purchasing, hiring or obtaining by any other contractual means of goods, construction works and services by the public sector. It is alternatively defined as the purchase of commodities and contracting of construction works and services if such acquisition is effected with resources from state budgets, local authority budgets, state foundation funds, domestic loans or foreign loans guaranteed by the state, foreign aid as well as revenue received from the economic activity of state. Public procurement thus means procurement by a procuring entity using public funds (World Bank, 1995 as quoted by Kipchilat, 2006). The importance of public procurement in terms of size relative to world GDP and world trade is highlighted by an OECD report (OECD, 2001 quoted by Odhiambo and Kamau2003). In COPY RIGHT 2013 Institute of Interdisciplinary Business Research 566

7 this report, the value of the contestable government procurement market was estimated at over $2 000 billion in This is equivalent to 7 per cent of world GDP and 30 per cent of world merchandise trade. In a related study, Trionfetti (2000) quoted by Odhiambo and Kamau (2003) estimates that the size of public procurement varies between 5 and 8 per cent of GDP in most industrialized countries. For Middle East and Africa, the magnitude of central government purchases ranges between 9 and 13 per cent. Kipchilat (2006) quoting a Comesa report (2004) noted that procurement absorbs 60 percent of government expenditure and this means that accountability at all levels is important. These figures indicate that public procurement is important in the economies of both developed and developing countries. Public procurement has become an issue of public attention and debate in both developed and developing countries, and has been subjected to reforms, restructuring, rules and regulations. Public procurement refers to the acquisition of goods, services and works by a procuring entity using public funds (World Bank, 1995a). According to Roodhooft and Abbeele (2006), public bodies have always been big purchasers, dealing with huge budgets. Mahmood, (2010) also reiterated that public procurement represents 18.42% of the world GDP. Consequently, various countries both in developed and least developed countries have instituted procurement reforms involving laws and regulations. The major obstacle however, has been inadequate regulatory compliance. De Boer and Telgen (1998) confirm that noncompliance problem affects not only the third world countries but also countries in the European Union. This position is further supported by Gelderman et al., (2006) who contend that compliance in public procurement is still a major issue. Hui et al., (2011) while analyzing procurement issues in Malaysia established that procurement officers were blamed for malpractice and non-compliance to the procurement policies and procedures. Citing Yukl (1989), Gelderman et al., (2006) stipulate that compliance occurs when the target performs a requested action, but is apathetic about it, rather than enthusiastic, and puts in only a minimal or average effort. However, as an organizational outcome, compliance has traditionally been understood as conformity or obedience to regulations and legislation (Snell, 2004) cited in Lisa, (2010). For instance in Uganda, a wave of procurement reforms that begun in 1997, culminated into the enactment of the Public Procurement and Disposal of Public Assets (PPDA) Act 2003, and regulations Unfortunately, many central government ministries and agencies have since then not followed prescribed practices (Agaba & Shipman, 2007). The procurement audits carried out by the PPDA have revealed that out of 322 contracts audited at the end of 2005, only 7 (2%) were assessed as compliant. Other successive audit checks reveal that compliance in public procurement in Uganda is still inadequate (PPDA compliance reports, 2009; PPDA Baseline survey report, 2010; PPDA Capacity Building Strategy Report, ; World Bank Country Procurement Assessment Report, 2001) cited in Tukamuhabwa B. R(2012) The Developments Public Procurement System in Kenya In the past three decades, the public procurement system in Kenya has undergone significant developments. From being a system with no regulations in the 1960s to a system regulated by Treasury Circulars in the 1970s, 1980s and 1990s, the introduction of the Procurement Regulations of 2006 brought new standards for public procurement in Kenya. Many studies were carried out on procurement before the Public procurement and Disposal Regulations of COPY RIGHT 2013 Institute of Interdisciplinary Business Research 567

8 2006 to evaluate the efficiency of the procurement process in existence at the time, (Kipchilat, 2006). The major findings of the studies were that public procurement was not operating efficiently and that the state was losing a lot of money through shoddy deals The Public Procurement Regulations of 2006 These regulations became effective on 1st January 2007 after the gazettement of the Public Procurement and Disposal Regulations Act The purpose of this Act is to establish procedures for procurement and the disposal of unserviceable, obsolete or surplus stores and equipment by public entities to achieve efficient management of public funds. The act contains eleven (11) parts. Part II of the Act deals with the establishment of bodies involved in the regulation of public procurement, namely, The Public Procurement Oversight Authority (PPOA), Public Procurement Oversight Advisory Board, and the Public Procurement Administrative Review Board. The PPOA is charged with ensuring procurement procedures are complied with, The Public Procurement Oversight Board s functions include approving the PPOA s estimates of revenue and expenses, and recommending appointment or termination of the Director General. Part III of the Act deals with the internal organization of public entities as far as procurement is concerned, for instance, requiring all public organizations to establish tender committees of not less than 5 members whose secretary must be a fully qualified professional. Part IV of the Act makes general provisions for procurement by public entities. It highlights the requirement that each procurement entity shall use the open tendering under Part V or alternative procurement procedure under Part VI. The use of alternative procurement procedure is qualified; a public entity may only use restricted tendering with written approval of its tender committee and with documented reasons for doing so. All those that qualify for a tender award must have the requisite professional qualifications, resources and equipment and the capacity to enter legal agreements. The Part also deals with three aspects of policy; conflict of interest, non discrimination and giving maximum business opportunities to small and micro enterprises. This part also outlaws all forms of corruption in procurement; that is to say, payment for goods and services which are not supplied; if supplied they are sub-standard, defective or overpriced; purchase of goods in excess of requirements; over-invoicing by contractors; giving bribes and disclosure of confidential information. Part V makes provisions for preparation of tender documents, advertisement and invitation to tender, tender securities, as well as opening of tenders. In addition, it provides for responsiveness of tenders, evaluation, and notification of award, contracting and extension of tender validity. Part VI deals with alternative procurement procedures. This part provides the alternative methods of procurement as restrictive tendering, requests for proposals and quotations, procedure for proposals and quotations, procedure for low value procurement and concessioning. Part VII provides administrative review of procurement procedures. It recognizes that any aggrieved party in a procurement process has a right to seek administrative review of a tender award. Part IX provides for debarment from participating in public procurement. The Director General may, with approval of the Advisory Board, bar a person from participating in procurement proceedings for up to 5 years. The grounds for such punishment are the commission of an offence relating to breach of contract, giving false information COPY RIGHT 2013 Institute of Interdisciplinary Business Research 568

9 about qualifications and refusal to enter into a written contract. Part X deals with the disposal of stores and equipment by public entities. Part XI makes miscellaneous provisions for example that defense and national security organs are required to comply with the Act. In public secondary schools, procurement matters have been vested in the Schools Tender Committee whose membership structure is the Deputy Principal who is the Chairman of the Committee, the person in charge of finance (bursar), who will be the Deputy Chairman, at least six Heads of Departments including the Matron, and the officer heading the procurement unit who will be its secretary Effects of the public Procurement Regulations in Kenya The Principal reason for the enactment of the Act was to have a legal regime that weeds out inefficiencies in the procurement process, remove patterns of abuse, and the failure of the public purchaser to obtain adequate value in return for the expenditure of public funds. However, these objectives have never been fully achieved in practice, (Wanyama, 2010). Wanyama notes further that key provisions of the Act and the Regulations are replete with textual weaknesses that have often been abused by procuring entities. The Regulations do not envisage contemporary market realities hence the need to continuously revise them to keep pace with these developments. In a study by the PPOA (2007), the introduction of the legal and regulatory procurement framework; the establishment of the PPOA as an oversight body; the development of a framework for contract administration and the new appeals mechanism were among those aspects of the procurement system rated as having been positively affected by the Regulations. In contrast, the existing institutional development capacity in procuring entities and functioning of the procurement market were assessed as being among the weakest aspects of the system. The report noted that although procedures supporting systematic procurement planning have been established, research showed that these are far from always being complied with. It was found out, for example, that there was a low share of procurements that were done through open tendering. This indicated that most of the procurements were done on an ad hoc basis, by quotations and direct procurements, thus suggesting a lack of procurement planning in most of the surveyed government departments. One of the strong points about the Regulations according to the report by the PPOA was that procurement decision making had been fully delegated. The Regulation s framework provides for a fully decentralized procurement process, leaving the full responsibility of undertaking procurements to the tender committees and the procurement unit at the level of the procuring entity. The Regulations were also meant to ensure that efficient training had been offered to professionals to serve in procurement. It was also revealed by the study by the PPOA that the available expertise at the procurement units did not meet the need for specialized procurement knowledge despite there being steps towards developing a professional procurement workforce. The overall lack of procurement knowledge remains a major weakness to the efficiency of procurement operations. Short-term procurement training was also found to be in short supply, although it was noted that the PPOA is currently offering a series of sensitization sessions targeting both the public and private sector. On lead time, it was found out that the laws and procedures do not support timely procurement, contract execution and payment. For example, there were no legal provisions, procedures and or COPY RIGHT 2013 Institute of Interdisciplinary Business Research 569

10 guidelines on the time limits for appropriation of funds, the processing of invoices and payments. In a study by KPMG International carried out after the introduction of the Regulations, it was still found out that public procurement still suffers from fraud and misconduct (KPMG, 2008). In yet another study by KACC, it was noted that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others. In a survey of public institutions by the KACC in 2007 after the PPDR had been implemented, it was revealed that procurement had become more transparent and formal. 2.2 Conceptual Framework According to Mugenda and Mugenda (2003), a conceptual framework refers to conceptualization of the relationship between variables in the study and it is shown diagrammatically. Apart from showing the direction of the study, through the conceptual framework, the researcher is able to show the relationships of the different constructs that researcher was to investigate. Procurement e Ethics Staff Training on Procurement Procedures Compliance of Procurement Regulations in Secondary Schools Awareness with Procurement Regulations` Independent variables Dependent Variable Fig 2-2 Conceptual Framework Ethics and Compliance in Procurement Regulations Dobler and Burt (1996) define a profession as: a calling requiring specialized knowledge and often long and intense preparation including instruction in skills and methods, maintaining by force of organization or concerted opinion high standards of achievement and conduct, and committing its members to continued study and to a kind of work to which has for its prime purpose the rendering of a public service This definition is echoed by Millerson (1964) who lists the following essential features of a profession. A profession according to Millerson has the following essential features; A skill based on theoretical knowledge; A skill requiring training and education; the demonstration of competence by professional by passing a test; maintenance of integrity by adherence to a code of conduct; service provided for the public good and that the profession is organized. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 570

11 Procurement professionals need to acknowledge and devise strategies for managing all these complex challenges. The professionals must be seen as champions of efficiency and effectiveness and must acknowledge the challenges and their various forms, and their sources. The requirements to educate professionals and equip them with new and higher-level skills have consequently become urgent (Sauber et al., 2008). A skill is the ability either to perform some specific behavioral task or the ability to perform some specific cognitive process that is related to some particular task (Peterson and Van Fleet, 2004). However, Lan, Riley and Cayer, (2005) report that finding, hiring and retaining dedicated, energetic, and ethical employees with special skills is always hard. While we understand that professionalism is a key mechanisms for, and primary targets of institutional change, the precise role of professions and professional service firms in processes of institutional change remain under-theorized (Hwang & Powell, 2009; Scott, 2008) Training and Compliance on procurement regulations According to a study by PPOA (2007) the procurement regulations were meant to ensure that efficient training had been offered to professionals to serve in procurement. It was also revealed by the study by the PPOA that the available expertise at the procurement units did not meet the need for specialized procurement knowledge despite there being steps towards developing a professional procurement workforce. The overall lack of procurement knowledge remains a major weakness to the efficiency of procurement operations. Short-term procurement training was also found to be in short supply, although it was noted that the PPOA is currently offering a series of sensitization sessions targeting both the public and private sector. On lead time, it was found out that the laws and procedures do not support timely procurement, contract execution and payment. For example, there were no legal provisions, procedures and or guidelines on the time limits for appropriation of funds, the processing of invoices and payments (KACC 2007). In a study by KPMG International carried out after the introduction of the Regulations, it was still found out that public procurement still suffers from fraud and misconduct (KPMG,2008). In yet another study by KACC, it was noted that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others. In a survey of public institutions by the KACC in 2007 after the PPDR had been implemented, it was revealed that procurement had become more transparent, formal and clearer Staff s awareness and Procurement Regulations The procurement exercise follows steps according to the PPOA of These steps must be observed in order to ensure that all the stakeholders involved in the procurement exercise obtain fair treatment. The steps include; planning for the required procurement over a given period, identifying the source of the items, highlighting specifications/initiation of procurement, determination of procurement procedure, Sourcing (soliciting) offers, evaluation of offers, post qualification, commencement of contract, contract performance (delivery) and management, record keeping and accountability, payment and post contract performance (PPOA, Act, 2007). Many corporate board members in Africa, especially of state-owned companies, have limited understanding of their roles, and are usually open to manipulation by management, chairmen, or principal shareholders. Some are outright incompetent. Non-executive directors in Africa COPY RIGHT 2013 Institute of Interdisciplinary Business Research 571

12 need to play any meaningful role in the ensuring compliance. However many simply act as rubber stamps for decisions taken outside the board (Charles & Oludele, 2003). In this perspective, compliance arises from a dynamic equilibrium between the various powers of the state and understanding what their roles are (Fisher 2004). According to De Boer and Telgen (1998) as quoted by Gelderman et al., (2006), one of the factors causes of non compliance with procurement regulations is the level of awareness with the procurement regulations. De Boer and Telgen (1998). assert that during the early days of the inception of public procurement regulations in The Netherlands, many municipalities could not comply to the regulations because they were not familiar with them. Gelderman et al., (2006) confirmed this position in a survey on compliance with EU procurement directives. On the other hand, it is possible that those who are familiar with the regulations know it so well that they know how to beat the loopholes to their advantage. It is worth noting that the ambiguity in the public procurement procedures may provide a chance for dubious acts including tendering and discriminate supplier selection which may progress into poor compliance levels. According to Guy (2000), there are six dimensions though which we can judge the level of institutionalization of any structure and its ability to adapt to change, including: autonomy, complexity, coherence, congruence and exclusivity. Implementation of organizational activities depends on the relationships between and within organizations. 2.3 Summary of Literature and Research Gaps Whereas previous studies have always looked at compliance and non-compliance of public procurement procedures not all factors have been dealt with within the institutions of learning in Kenya. The aim of the Public Procurement Regulations of 2006 was to promote fairness, transparency and nondiscrimination in procurement in public institutions with the main aim of ensuring efficient use of public funds. However, studies reveal that even after the enactment of the Regulations, there are losses of public funds that can be attributed to public procurement. Further, studies indicate dissatisfaction among stakeholders brought about by loopholes left by the Regulations which may be used by dishonest people to make the process inefficient. 3.0 RESEARCH METHODOLOGY 3.1 Introduction This section deals with the research design, target population, sample and sampling procedures, data collection instruments,validity and reliability of the instruments, procedure for data collection, and data analysis techniques. 3.2 Research design This study was conducted through a descriptive survey research design. According to Mugenda, & Mugenda (2003) a descriptive survey is an attempt to collect data from members of a population in order to determine the current status of that population with respect to one or more variables. The design investigated the factors influenced compliance on public procurement regulations in public secondary schools in Nyamache district. Descriptive survey design was appropriate for study, as it allowed the researcher to use few projects to explain the influence of professionalism/ethics, training and awareness in compliance in public secondary schools in Nyamache district. Furthermore a descriptive COPY RIGHT 2013 Institute of Interdisciplinary Business Research 572

13 survey research is suitable since it considers issues such as economy of the design, rapid turnaround in data collection and it s suitable for extensive research. 3.3 Target population These are the individuals to be studied (Mugenda&Mugenda,1999). The study involved 47 public secondary schools in Nyamache district. These comprised of all 423 tendering committee members of public secondary schools in Nyamache district. The tendering committee of each school consist of 9 members (deputy principal, head of procurement unit and 6 heads of departments). 3.4 Sampling Frame The sampling frame included the list of 47 public schools in Nyamache district. It also consisted of tender committee members of the 47 schools in the county. 3.5 Sample Size and sample selection According to Best and Kaln (1998), the ideal sample should be large number to serve as adequate representatives of the population and small enough to be selected economically, that is in terms of subject availability. In this research a sample was selected from 423 school tender committee members. Stratified random sampling was used to stratify the 47 schools in Nyamache district into three divisions; Nyacheki with 15 schools, Nyamache with 18 schools and Kionyo with 14 schools. Simple random sampling was used to select 30% of the schools in each of the three divisions (Nyamache 6, Nyacheki 5 and Kionyo 4) making a sample size of 135 respondents. This sample size was appropriate according to Gay (1992), who states that a sample of 10% of the large population is considered minimum while a sample of 20% may be required for smaller populations. 3.6 Data collection instruments As advanced by Warwick et al(1975), methods chosen for data collection should provide high accuracy and convenience of obtaining data from the respondents. In this study, the researcher used closed-ended and open-ended questions. Questionnaires were used as instruments to collect data Questionnaires The questionnaires was used to collect written information from literate respondents, and those quite able to answer items adequately(mugenda& Mugenda, 1999).In this study questionnaires were used to collect information on compliance for procurement regulations in public secondary schools in Nyamache district. The questionnaire, which contained both closed and open ended questions, formed the main instrument for data collection Interview schedules According to Mugenda & Mugenda (1999) an interview schedule is a set of questions that the interviewer asks when interviewing. Open-ended interviews were carried out to supplement the questionnaires. Interview schedules involved face to face meetings with the interviewees. They were used to collect information from the tendering committee members. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 573

14 3.6.3 Validity of instruments According to Borg and Gall (1989), validity is the degree to which a test measures what it purports to measure. To enhance validity, the researcher exposed the instruments to experts in research for judgment. The researcher also conducted a pilot study whereby inappropriate questionnaire items were discarded, rephrased and or merged. The piloting was conducted in Nyamache district, respondents from two schools not among the sampled was selected randomly. The questionnaires were presented to the members of the school tendering committee members Reliability of instruments According to Mugenda and Mugenda (1999) reliability is a measure of the degree to which a research instrument yields consistent results or data after repeated trials. Reliability in research is influenced by random error, of which if it is high, reliability is low. To assess the reliability of instruments, test-retest technique was used. The research instruments were presented to the two schools selected for a pilot study the result was recorded, the same instruments were presented to the same group after two weeks and the results for both tests were correlated. The scores from the two testing periods were correlated and a reliability index was found to be Reliability index above 0.8 generally indicates good consistency (Borg &Gall, 1989). 3.7 Data collection procedure For the purpose of this research, and in order to achieve the objectives both primary and secondary data was used. The secondary data contributed toward background information, while primary data was collected by administering the research instruments after sought permission from the relevant authority, mainly from the Ministry of Higher Education (department of research) and letter of introduction from Jomo Kenyatta University of Agriculture and Technology. The researcher had to assure the respondents confidentiality of the information given which enabled to fix date of data collection. The researcher administered the questionnaire and conducted interviews schedules to the sampled participants. The researcher gave adequate time to participants to respond to the questionnaires. 3.8 Data Processing and Analysis presentation The data was analyzed by using quantitative approach using descriptive statistics. The responses that were received from the questionnaires and interview schedules conducted were organized, tabulated and analyzed using simple frequencies and percentages. Data was presented in descriptive form supported by means, tables, frequency distributions and percentages. Researcher used likert scale as parameter to measure the variables. Care was taken by the researcher to note the number of times view was expressed and the number of respondents that expressed that view. This formed the basis for drawing conclusions. 4.0 RESULTS AND DISCUSSION 4.1 Introduction This section presents analysis done in relation to the study objectives and research questions in the first section of the paper under the topic; Factors influencing compliance of public procurement regulations in public secondary schools in Nyamache district. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 574

15 The researcher prepared 135 copies of questionnaire for this study that were issued to 135 respondents. The response rate was percent which is a good response rate that one can depend on to make conclusion and recommendation. According to Hagger et al., (2003), the researcher should strive to achieve a response rate of 50 percent, 60 percent or 75 percent. And the non response was percent as shown in table 4-1 Table 4-1: Showing Response Rate of Respondents Response Frequency Percentage (%) Actual Response Non response Total Demographic Information The researcher used four demographic items in the questionnaire; Age, gender, educational qualification, marital status and work experience. The respondent s responses are as below Respondent s Age Table shows that most respondents were in the age group comprising 39.2 percent followed by age bracket of 50 and above with 30 percent, the age bracket with 26.7 percent and comprising 4.1percent this implies that most of the employees are aged 50 years and below. This gave the implication that the majority were able with enough experience in matters of [PPDA]. Table Respondent s Age Bracket Age Frequency Percentage (%) and above Total Respondent s genders Table shows that majority of the respondents were male comprising percent while male were percent this implies more males are employed than females. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 575

16 Table Respondent Composition According to Gender Gender Frequency Percentage (%) Male Female Total Respondent s Educational Qualifications Table below shows that the level of education was as follows; none had a certificate, percent of the respondents were diploma holders while majority of the respondents were degree holders 75 percent with 15.8 percent being post graduates while 0.83 percent were holding other qualification. This gave the implications that majority of tendering committees that were learnt agrees with [PPDA]. Table Respondent s Educational Qualifications Education Level Frequency Percentage (%) Certificate Diploma Degree Post Graduate Others Total Respondent s Work Experience Table shows the number of years the respondents have worked for the school, 41.7 percent have worked there for below 5 years, 40 percent have worked for the organization between 5 and 0 years and 19.2 percent have worked for the ministry between 11 and 15 years while 5.8 percent of the respondents have worked for the school above 15 years. Concurring with PPDR which included public secondary schools among the institutions whose procurement systems were to be regulated by the Regulations. The Public Procurement and Disposal Act granted teachers and subordinate staff the power to control the tendering and procurement process in public schools by setting of Tendering Committees to oversee the whole process of procurement. This was also aimed at decentralizing the procurement process which was a preserve of Principals for a long time. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 576

17 Table Respondent s Work Experience Number of Years Worked Frequency Percentage (%) Below five years Between 5 and 10 years Between 11 and 15 years Above 15 years Total Ethics on Compliance of Procurement Regulations The respondents were asked to answer questions on the influence of ethics on compliance of procurement regulations in public secondary schools using 7 items in the questionnaire as shown below Findings on how Purchase Requisitions are handled as per the regulations Table shows that 4.2 percent strongly agree there is handling of requisition as per the procurement regulations while 30 percent agree that requisitions are handled following the regulations, 25 are not sure whether requisition are handled as per the regulations while 35 percent disagrees with 30 strongly disagreeing this means that purchase requisitions are not handled as per the procurement regulations. The results agree with a study by KACC, which noted that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others and are as shown in table Table 4-3-1: Respondent s on whether Purchase Requisitions are handled as Per the Regulations Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total COPY RIGHT 2013 Institute of Interdisciplinary Business Research 577

18 4.3.2: Response on Whether the PPDA Procedures are followed in Schools Table indicates that 12.5 percent strongly agree that PPDA procedure are followed 16.7 percent agree that PPDA procedures are followed 20.8 percent are not sure whether PPDA procedure is adhered to with 40 percent disagreeing that PPDA procedures are followed while 18.3 strongly disagreeing with the statement this implies that PPDA procedures are followed. This agrees with Gelderman et al., (2006) stipulate that compliance occurs when the target performs a requested action, but is apathetic about it, rather than enthusiastic, and puts in only a minimal or average effort. Table : Response on Whether the PPDA Procedures are followed in Schools Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total Response on whether the procurement regulations followed help in procuring of quality goods and services Table shows that 9.2 percent of the respondents strongly agree that goods and services procured are of quality, 12.5 percent also agree that the goods and services procured are of quality while 11.7 percent are undecided 45.8 percent of the respondents disagree goods procured are of quality while 18.3 percent strongly disagree. Most employee s think that goods and services are being procured are of quality because of the PPDA procedure s put in place, this implies that products procured are of quality. Table Responses on whether the procurement regulations followed help in procuring of quality goods and services Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total COPY RIGHT 2013 Institute of Interdisciplinary Business Research 578

19 4.3.4 Response on whether weak enforcement measures of procurement law contribute to unethical practices According to the results of table below, 29.2 percent of the respondents thought that weak enforcement measure of the law contributed to unethical practices with 33.3 percent agreeing while 4.2 percent were undecided 12.5 percent disagreed and 16.7 percent strongly disagreed this indicates that weak enforcement measures of the law contributes to unethical practices. KPMG International carried out after the introduction of the Regulations, it was still found out that public procurement still suffers from fraud and misconduct, This with (KPMG,2008). And study by KACC, also noted that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others. Table Response on whether weak enforcement measures of procurement law contribute to unethical practices in public secondary schools Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total Response on whether moral degradation in the society cause unethical conduct among school tendering committee members Results from table below shows that 34.2 percent of the population strongly agreed that moral degradation in the society causes unethical conduct with 28.3 percent agreeing while 8.3 percent were not sure with 12.5 percent disagreeing that moral degradation in society causes unethical conduct and 16.7 percent strongly disagreed this means that the respondents agree that moral degradation of the society contributes to unethical conduct. This agrees with Lan, Riley and Cayer, (2005) report that finding, hiring and retaining dedicated, energetic, and ethical employees with special skills is always hard. Table Response on whether moral degradation in the society cause unethical conduct among school tendering committee members Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total Response on whether unethical practice bidder contributes to non-compliance to procurement regulations in your school According to the results in table below, 38.3 percent of the respondents strongly agreed that unethical practice of bidder contributes to unethical practice of employees with 26.7 COPY RIGHT 2013 Institute of Interdisciplinary Business Research 579

20 percent also agreeing while 7.5 percent were undecided percent disagreed that unethical practice of leader contributes to unethical practice of employees while 15.0 percent strongly disagreed this gives the implication that conduct of bidder can affect the conduct of school tendering committee. Table Response on whether unethical practice bidder contributes to noncompliance to procurement regulations in your school Response Frequency Percentage % Strongly Agree Agree Undecided Disagree Strongly Disagree Total Responses on whether schools have ever handled cases of un-ethical practice in procurement of goods and services According the results shown in table below, 79.2 percent of the respondents indicated that they have handled a case of un-ethical practice in their schools while 28.8 indicated that they have not handled such cases. Some of unethical practices cited by the respondents include corruption, favoritism, fraud, extortion and sexual harassment, bribery with the respondents citing greed, low payment, and lack of effective reporting system as the main causes of unethical practices. This is in line with a study by KACC (2007) that public officials distort the Regulations to restrict the participation of interested firms in procurement, or still direct the outcome of others. Table Responses on whether schools have ever handled cases of un-ethical practice in procurement of goods and services Responses Frequency Percentage (%) Yes No Total Influence of Awareness on Compliance of Procurement Regulations The respondents were asked to answer questions on the influence of awareness on compliance of procurement regulations in public secondary schools using 6 items in the questionnaire as shown below. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 580