Effect of Operational Risk Management On Financial Sustainability of TVET Institutions in Nyeri County, Kenya
DOI:
https://doi.org/10.53819/81018102t2532Abstract
This study examined the effect of operational risk management on financial sustainability of Technical and Vocational Education and Training (TVET) institutions in Nyeri County, Kenya. The research employed a descriptive cross-sectional survey design targeting all 40 TVET institutions in the county, with data collected from 73 institutional heads and finance officers, achieving a response rate of 91.3%. The study utilized structured questionnaires to assess operational risk management practices including internal control systems, risk policies, audit procedures, staff training, and corrective action mechanisms. Descriptive analysis revealed that TVET institutions had well-established operational risk management practices, with consistently high mean scores across all indicators. Pearson correlation analysis demonstrated a strong positive relationship between operational risk management and financial sustainability, while regression analysis confirmed a significant positive effect with operational risk management explaining 55.1% of the variance in financial sustainability outcomes. The findings indicate that TVET institutions with comprehensive operational risk frameworks, including clear policies, robust internal controls, regular audits, and trained staff, achieve superior financial sustainability compared to those with weaker risk management systems. The study concludes that operational risk management is a critical determinant of financial sustainability in TVET institutions. The study recommends that institutions strengthen their internal control systems, enhance audit processes, develop comprehensive risk policies, and invest in continuous staff training to improve their long-term financial viability.
Keywords: Operational Risk Management, Financial Sustainability, TVET institutions
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