IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 1. Ver. III (Jan. 2014), PP 55-78 www.iosrjournals.org www.iosrjournals.org 55 | Page Financial Management Challenges Facing Implementation of Free Day Secondary Education in Imenti North District, Kenya Mercy Kaguri, Ibuathu Charles Njati, Kubaison S. Thiaine. School of Business and Economics Meru University of Science and Technology P.O Box 972-60200 Meru Department of Economics School of Business and Economics Meru University of Science and Technology P.O Box 972-60200 Meru Department of Business Management School of Business and Economics Meru University of Science and Technology P.O Box 972-60200 Meru Abstract: Almost all modern organizations, including schools have the characteristics of the five basic functions performed by all managers which are planning, organizing, commanding, coordinating and controlling. Due to low transition rate of students from primary to secondary school, the government of Kenya launched Free Secondary Education (FSE) initiative strategy in 2008 with an aim of increasing the transition percentage rate through retention and completion without any discrimination. financial management in Kenya’s public secondary schools is a very sensitive managerial role, since a lot of tax payer’s money is invested in education. This study was carried out in Imenti North District which is in Meru County, Kenya which sought to address financial planning, reports and control challenges that need to be corrected in order to have an improved and sustainable FSE program. The sampling design adopted was simple random sampling. Questionnaires were used as instrument for collecting data from the BOGs and PTAs while interview schedules were administered to the principals, DEO and ZQASOs. Validity of the instruments was done through expert researchers. Reliability was tested through the use of Spearman Brown Prophecy Formula. Target population was 730 with a sample size of 250 participants. Data collected shows that in financial planning; budgeting is often done in either a caress fashion or not done at all with minimal involvement of education stakeholders in the budgetary process, financial reports are poorly prepared while Auditing is done in an arbitrary way. Therefore for financial management to be successful, then planning and controlling should be interdependently linked. The researcher recommends that there is need for improvement of policy tracking of resources to ensure proper, adequate and accountable utilization of resources budgeted for education in the right manner which can be done through external auditing or outsourcing of the services. Key words: financial management, administration, accountability and budgeting. I. Introduction 1.1 Background information Management of any organization is a continuous process involving a chain of command, equity, efficiency, stability and the allocation of authority through the design of 14 principles of management. Of the 14 principles, the following are applicable for school managers in Kenya; division of labour, authority, discipline, unity of command, order and equity. According to Hoy& Miskel (2008) tasks in most organizations including schools are too complex to be performed by a single individual; division of labour among positions improves efficiency. Efficiency increases because division of labour produces specialization, which in turn leads to employees who become knowledgeable and expert at performing their prescribed duties. Such division enables the organization to employ personnel on the basis of technical qualifications. Hence, division of labour and specialization produce more expertise in school personnel. Hierarchy is perhaps the most pervasive characteristic in modern organizations. Almost without exception, large organizations develop a well- established system of super-ordination and subordination, which attempts to guarantee the disciplined compliance to directives from superiors that, is necessary for implementing the various tasks functions of an organization. Barasa (2009) laments that the public education system in Kenya is structured along the lines of Weber‟s concept of Hierarchy. There is for instance a DEO who is answerable to the provincial Director of education who in turn is accountable to the Director of education. In secondary schools authority follows downwards where there is the head teacher/principal and immediately under him/her is the deputy head teacher/principal. Answerable to the deputy are various departmental heads. The heads of departments are in turn in charge of subjects teachers. A school‟s financial management is the execution by a person in a position of authority of those management actions (regulated tasks) connected with the financial aspects of schools and having the sole purpose of achieving effective education” (Similarly, Joubert and Bray (2007) describe a school‟s financial