Financial Management Practices and Performance of Private Universities in Uganda.
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Date
2025
Authors
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Publisher
Kabale University
Abstract
The purpose of this study was to investigate the effect of financial management practices on the performance of private universities in Uganda. It sought to unravel the hidden mysteries of how these practices shape the financial destiny of these institutions. This study introduces an interesting contemporary development in the evaluation of university performance, placing greater emphasis on the quality of education and the financial sustainability of private universities, with financial management practices acting as the predictor variable. Efforts were made to assess whether internationally accepted financial accounting and management practices, such as financial accountability, budgeting, internal financial controls, and working capital management, have enhanced the resource base of private universities, thereby ensuring better performance in terms of guaranteeing financial sustainability and education quality. This includes the provision of modern learning infrastructure, the employment of qualified and competent staff, and the promotion of research leading to cutting-edge innovations. To achieve the research objective, the study draws on the interdisciplinary theories of Agency and Stakeholders as its theoretical foundations. The study adopts a post-positivist approach, which advocates for an explanatory sequential mixed-methods approach. This approach employs a descriptive, analytical, and cross-sectional research design. The study surveyed a population of 280, with a sample of 162 respondents providing the quantitative data, while 16 key informants participated in the qualitative survey. Quantitative data was gathered using a questionnaire survey method, while semi-structured interviews were employed to collect qualitative data. The research team analyzed the quantitative data using structural equation modeling (SEM) to examine and validate the developed research model. SEM was also used to evaluate and refine the model's causal and effect aspects. The qualitative data underwent theory-driven content analysis. The findings from the study's quantitative and qualitative strands were triangulated during the discussion stage.
The study's findings revealed that effective financial management practices impact the performance of private universities by 57%. Specifically, financial accountability had a positive and statistically significant effect on performance (β = 0.411, P<0.01), while financial controls also had a positive and significant effect on university performance (β = 0.130, p < .01). Working capital management showed a positive and significant effect on university performance (β = 0.407, P < 0.05). Budgeting, however, had a positive but statistically insignificant effect on university performance (β = 0.006, p > 0.01). Nonetheless, some private universities did not effectively implement financial management practices, which contributed to the persistence of poor performance in these institutions in Uganda. The study recommends that universities establish governance structures that promote collaboration between institutional leaders and proprietors and develop key performance indicators that link both financial management practices and overall university performance. Private universities should also explore opportunities for networking and strategic partnerships with other universities and agencies, particularly for research and projects, rather than competing and duplicating efforts, which depletes their resources. The thesis contributes to theory by developing a Habaasa model for evaluating the performance of private universities in Uganda
Description
Keywords
Financial Management Practices, Private Universities, University Performance, Financial Sustainability, Educational Quality, Uganda, Agency Theory, Stakeholder Theory
Citation
Habassa, I. A. (2025). Financial management practices and performance of private universities in Uganda [Doctoral Dissertation, Kabale University].