Modeling Own Source Revenue (OSR) of county governments in Kenya

Mwaura, Cynthia Wanjiru
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Strathmore University
Revenue forecasting is an essential part of budget making process in the public sector. This study considered the Time Series Modeling of Own Source Revenue of counties in Kenya. Data used was collected from the revenue collection system of one of the counties, in particular, daily revenue from July 2015 to June 2017 with the general objective of exploring the data and further establishing a suitable forecasting model which could be used to predict the amount of revenue to be collected in a certain specified period. Box and Jenkins method of time series analysis was used to analyses the series. From the analysis, INIA (1, 1) model was identified as a suitable model to forecast the own source revenue. The forecast generated holding other factors indicated that the revenue collected would remain within the same range as before and thus, the Commission of Revenue Allocation should continue allocating funds to counties as the cow1ty cannot fully rely on its own revenue for sustainability and economic development.
Submitted in partial fulfillment of the requirements for the Degree of Bachelor of Business Science in Finance at Strathmore University
revenue collection, county governments, governance