PROJECT COST MANAGEMENT PRACTICES AND PERFORMANCE OF UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT FUNDED PROJECTS IN KAJIADO COUNTY, KENYA

Michael Mutwiri Kirimi, Dr. Emmy Rotich

Abstract


In both developing and developed countries, project cost management is recognized as a critical factor influencing project performance and successful implementation. Inadequate accountability in resource allocation often leads NGOs to operate with constrained donor funds, resulting in incomplete or delayed projects due to budgetary limitations. This study aimed to examine the effect of project cost management practices on the performance of USAID-funded projects in Kajiado County. Specifically, it focused on assessing the impact of project cost budgeting, and cost control. The study was guided resource-based theory, and control theory. An ex-post facto research design was adopted. The unit of analysis comprised 155 USAID-funded projects, while the unit of observation was the project managers overseeing each project. Given the manageable number of projects, a census approach was employed, allowing for comprehensive data collection without the need for sampling. A pilot test was conducted with 16 project supervisors (10% of the target), who were not included in the final study. Instrument validity was established using content and construct validity, with Average Variance Extracted (AVE) values meeting the recommended threshold of 0.5. Reliability was confirmed using Cronbach’s Alpha, with all constructs exceeding the acceptable benchmark of 0.7. Data were analyzed using SPSS Version 28. Correlation results indicated that project cost control (r = 0.703, p = 0.000) had the strongest relationship with project performance, followed by budgeting (r = 0.621, p = 0.001). Regression analysis further confirmed cost control (B = 0.426, p = 0.000) as the most influential factor, followed by budgeting (B = 0.372, p = 0.000). The study concludes that effective cost management, particularly cost control, is essential for enhancing the performance of USAID-funded projects. It recommends strengthening financial oversight, enhancing budgeting practices, and optimizing cost planning to ensure efficient and sustainable project outcomes.

Key Words: Project Cost Management Practices, Project Cost Budgeting, Cost Control, USAID-Funded Projects


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References


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